What Is Not an Advantage of Obtaining Section 501(c)(3)status

question 134

Multiple Choice

What is not an advantage of obtaining section 501(c) (3) status?

• A) The charitable organization is permitted to engage in a trade or business unrelated to its mission without having to pay income taxes.
• B) Donors to the charitable organization are permitted to deduct contributions to the organization in computing their income taxes.
• C) The charitable organization does not have to pay state sales tax.
• D) Neither (A) nor (C) is an advantage.

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Definitions:

Tax Rate

The slice of income or profits that is claimed by the government from corporations or people in the form of taxes.

Break-even Level

The point at which total costs and total revenue are equal, resulting in no net loss or gain from business operations.

Earnings per Share

The portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's financial health.

Repurchase Shares

The act of a company buying back its own shares from the marketplace, reducing the number of outstanding shares.