Documentation & Reporting Flashcards
7 cards from real CAP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Documentation & Reporting flashcards as text
Which section of Form 990 requires a public charity to disclose its three highest-compensated independent contractors?
Answer: Part VII Section B
Form 990 Part VII Section B requires disclosure of the five highest-compensated independent contractors paid more than $100,000, providing transparency about significant outside relationships.
A private operating foundation must annually demonstrate active conduct of its exempt programs. Which test satisfies this requirement?
Answer: The income test and at least one of the assets, endowment, or support tests
A private operating foundation must pass the income test (spending substantially all income on exempt programs) plus at least one of the assets, endowment, or support tests each year.
What is the purpose of IRS Form 5227 filed by a charitable remainder trust?
Answer: To report distributions to beneficiaries and trust assets annually
Form 5227 is the Split-Interest Trust Information Return, filed annually by charitable remainder trusts to report trust assets, income, distributions to income beneficiaries, and the charitable remainder interest.
When a private foundation makes a grant to a foreign organization, what due diligence documentation standard applies?
Answer: The foundation must conduct equivalency determination or expenditure responsibility
To make grants to foreign organizations, private foundations must either obtain an equivalency determination (treating the foreign org as equivalent to a U.S. public charity) or exercise expenditure responsibility with detailed reporting.
Under the Pension Protection Act of 2006, donor-advised funds are required to disclose which information on Form 990?
Answer: Total number of donor-advised accounts, aggregate contributions, grants, and year-end value
Schedule D of Form 990 requires DAF sponsors to report the total number of accounts, aggregate value of contributions, grants made, and total year-end fair market value across all DAF accounts.
A donor establishes a charitable lead annuity trust (CLAT). Which IRS form reports the CLAT's annual activity?
Answer: Form 5227
Charitable lead trusts, like charitable remainder trusts, file Form 5227 (Split-Interest Trust Information Return) annually to report financial activity and the charitable lead interest.
Which record-keeping requirement applies specifically to payroll deduction charitable contributions made by employees?
Answer: Employees must keep a pay stub or pledge card showing the amount withheld and the donee organization
For payroll deduction contributions, the IRS allows a pay stub, W-2, or employer-prepared pledge card as the required documentation, in lieu of a written acknowledgment from the charity.