Solved by verified expert :1726. CHAPTER
15—EXEMPT ENTITIES Question PR #1
Miracle, Inc., is a § 501(c)(3) organization involved in medical research.
Based on its expectation that proposed legislation will adversely affect the
funding supporting its mission, Miracle hires a lobbyist to work in Washington
to represent its views.
Miracle is eligible for and thus makes the § 501(h) election. It calculates the
lobbying nontaxable amount to be $100,000 ($500,000 exempt purpose expenditures
´ 20%). The total lobbying expenditures for the year were $115,000. Calculate
Miracle’s tax on excess lobbying expenditures.
1727. CHAPTER
15—EXEMPT ENTITIES Question PR #2
Help, Inc., a tax-exempt organization, incurs lobbying expenses of $275,000
during the tax year. Help is eligible for and makes the § 501(h) lobbying
expenditure election. During the year, Help spends $1,200,000 carrying out its
exempt mission.
a.
Will the lobbying expense result in Help losing its exempt
status?
b.
Calculate the amount of any tax that Help must pay associated
with its lobbying expenses.
1728. CHAPTER
15—EXEMPT ENTITIES Question PR #3
Restful, Inc., a § 501(c)(3) exempt organization, hires a registered lobbyist
to promote its position on pending legislation. For the year, its lobbying
expenses are $200,000. Restful makes the § 501(h) election. Assume the lobbying
nontaxable amount is $140,000.
a.
Will the lobbying expenses result in Restful losing its exempt
status?
b.
Calculate the amount of any tax that Restful must pay
associated with the lobbying expenses.
1729. CHAPTER
15—EXEMPT ENTITIES Question PR #4
Health, Inc., a § 501(c)(3) exempt organization, engages in an excess benefit
transaction. The amount of the excess benefit is $300,000. For the organization
management, the participation in the excess benefit transaction was not willful
and was due to reasonable cause. Calculate the amount of the excise tax
(first-level tax) imposed under the intermediate sanctions provision.
1730. CHAPTER
15—EXEMPT ENTITIES Question PR #5
Nice, Inc., a § 501(c)(3) organization, inherited 100% of the stock of
Aggressive, Inc., a for-profit entity, at the beginning of the year. Although
Nice plans on selling the stock of Aggressive, a buyer has not yet been
located. Aggressive’s taxable income for the year is $900,000. Aggressive
distributed a dividend of $525,000 to Nice at the beginning of December.
Determine the tax consequences for the taxable income and the dividend payment:
a.
To Aggressive, Inc.
b.
To Nice, Inc.
1731. CHAPTER
15—EXEMPT ENTITIES Question PR #6
Assist, Inc., a § 501(c)(3) organization, receives the following sources of
support during the tax year.
General public for services rendered
$22,000
Governmental unit A for services rendered
30,000
Governmental unit B for services rendered
3,000
Governmental unit C for services rendered
8,000
Gross investment income
19,000
Contributions from individual substantial contributors
(disqualified persons)
18,000
Is Assist, Inc., classified as a private foundation?
1732. CHAPTER
15—EXEMPT ENTITIES Question PR #7
Spirit, Inc., a § 501(c)(3) organization, is classified as a private
foundation. It has investment income of $100,000. Calculate Spirit’s tax on its
investment income.
