Practice Test Geeks(CAP) Certified Philanthropic Advisor Practice Test
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Taxation & Legal Compliance Flashcards

6 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 6 Taxation & Legal Compliance flashcards as text

  1. What is the main tax benefit of making charitable donations?

    Answer: They reduce taxable income through deductions

    Charitable donations to qualified organizations can be deducted from taxable income, reducing overall tax liability.

  2. Which IRS form is required to report charitable donations?

    Answer: Form 8283

    Form 8283 is used to report non-cash charitable contributions exceeding $500 in value for tax deduction purposes.

  3. What is a key legal requirement for nonprofit organizations to maintain tax-exempt status?

    Answer: Avoiding political campaign activities

    Nonprofit organizations must refrain from political campaign activities to maintain their tax-exempt 501(c)(3) status.

  4. Which legal structure allows donors to retain control over how charitable funds are distributed?

    Answer: Donor-advised fund (DAF)

    A donor-advised fund (DAF) enables donors to make charitable contributions while recommending grants over time.

  5. What is the maximum charitable deduction allowed for cash donations to public charities?

    Answer: 60% of AGI

    For most taxpayers, cash donations to public charities can be deducted up to 60% of adjusted gross income (AGI).

  6. Which of the following must a nonprofit file annually to maintain tax-exempt status?

    Answer: Form 990

    Nonprofits must file Form 990 annually with the IRS to report financial activity and maintain tax-exempt status.