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Charitable Organizations Flashcards

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  1. What is the deadline for a new organization (other than a church) to file Form 1023 to be recognized as a 501(c)(3) from its date of formation?

    Answer: 27 months

    Organizations must file Form 1023 within 27 months of formation to have their tax-exempt status recognized retroactively to the date of formation.

  2. Which schedule of Form 990 must hospitals complete to report community benefit activities?

    Answer: Schedule H

    Schedule H is required for hospitals to report community benefit, community building activities, and billing/collection practices.

  3. A 501(c)(3) organization earns $50,000 from renting out office space to an unrelated for-profit business. How is this income generally treated?

    Answer: As unrelated business income subject to UBIT

    Rental income from real property to unrelated parties is generally treated as unrelated business income (UBI) unless certain exclusions apply.

  4. Under what circumstance is rental income from real property NOT subject to UBIT for a tax-exempt organization?

    Answer: When the property is not debt-financed and no personal services are provided to tenants

    Rental income from real property is excluded from UBIT when the property is not debt-financed and the organization does not provide substantial services to tenants.

  5. What is the annual gross receipts threshold below which a 501(c)(3) organization may file Form 990-N (e-Postcard) instead of Form 990?

    Answer: $50,000 or less

    Organizations whose gross receipts are normally $50,000 or less may satisfy their annual reporting requirement by filing the Form 990-N e-Postcard.

  6. Which of the following best describes a Type III non-functionally integrated supporting organization?

    Answer: One that must distribute at least 85% of its adjusted net income to supported organizations

    A Type III non-functionally integrated supporting organization must generally distribute at least 85% of its adjusted net income annually to its supported organizations.

  7. A private foundation makes a grant to an individual for travel expenses related to charitable work. What IRS process is required?

    Answer: The foundation must obtain advance IRS approval for the grant program

    Private foundations making grants to individuals must receive advance approval from the IRS for their grant-making procedures under IRC Section 4945.