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An Eligible § 501(c)(3) Organization Has Made the § 501(h)

question 74

Essay

An eligible § 501(c)(3) organization has made the § 501(h) election to participate in lobbying on a limited basis.If the ceiling on lobbying established in § 501(h) (lobbying nontaxable amount) is exceeded, what are the potential tax consequences to the exempt organization?


Definitions:

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, representing the owners' share.

Expenses

are the costs incurred in the operation of a business or the execution of a project, including money spent on goods, services, and other necessary items.

Return on Equity

A financial ratio measuring the profitability of a company expressed as a percentage of equity, indicating how effectively a company uses its equity investments to generate profits.

Total Assets

The sum of all assets owned by a company, including both current and fixed assets, giving an overview of the company's financial health.

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