Question 1. A corporate sponsorship payment that is contingent on a

1. A corporate sponsorship payment that is contingent on attendance at a sporting event increases the amount of unrelated business income.

a. True

b. False

2. The income from a bingo game or a casino game conducted by an exempt organization may be unrelated business income.

a. True

b. False

3. The key factors in determining whether an exempt entity’s income from a bingo game is unrelated trade or business income are whether substantially all the work is performed by volunteers and all of the prizes to be awarded are received as donations.

a. True

b. False

4. An exempt organization is located in the state of Nevada. Gambling in Nevada is legal. Therefore, bingo games are conducted by both taxable and tax-exempt organizations. If the net earnings from the bingo games are less than $25,000, the exempt organization is notsubject to the unrelated business income tax (UBIT).

a. True

b. False

5. Revenue generated by an exempt organization from the distribution of low-cost items is notincome from an unrelated trade or business.

a. True

b. False

6. If an exempt organization conducts a trade or business that consists of either exchanging or renting to other exempt

organizations the organization’s donor or membership list, such trade or business is an unrelated trade or business.

a. True

b. False

7. For an activity to be considered as regularly carried on for purposes of the unrelated business income tax, the activity must be conducted during the work week (i.e., activities performed on the weekend are not considered in determining if the activity is regularly carried on).

a. True

b. False

8. In calculating unrelated business taxable income, the exempt organization is permitted to deduct only the charitable contributions associated with the unrelated trade or business.

a. True

b. False

9. Unrelated debt-financed income, net of the unrelated debt-financed deductions, is subject to the unrelated business income tax only if the exempt organization is a private foundation.

a. True

b. False

10.Personal property rental income is subject to and real property rental income is notsubject to the unrelated business income tax.

a. True

b. False

11.If personal property is leased with real property and more than 45% of the rent income under the lease is from personal property, all of the rent income is subject to the unrelated business income tax.

a. True

b. False

12.If the unrelated business income of an exempt organization is $25,000 or less, the unrelated business income tax (UBIT) will be $0.

a. True

b. False

13.Debt-financed property consists of all real property of a tax-exempt organization on which there is a mortgage.

a. True

b. False

14.Only certain exempt organizations must obtain IRS approval to obtain exempt status.

a. True

b. False

15.Even though a church is not required to obtain IRS approval of its exempt status, it still annually must file a Form 990.

a. True

b. False

16.The due date for the Exempt Organization Business Income Tax Return (Form 990-T) is the fifteenth day of the third month after the end of the taxable year.

a. True

b. False

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