Which of the Following Statements Regarding the Unrelated Business Income

question 142

Multiple Choice

Which of the following statements regarding the unrelated business income tax is correct?

• A) Private foundations are subject to the unrelated business income tax.
• B) Bingo games are not subject to the unrelated business income tax if they are conducted by an exempt organization.
• C) The exchange or rental of membership lists with other exempt and nonexempt organizations is not an unrelated trade or business.
• D) All of the above statements are correct.
• E) None of the above statements is correct.

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Definitions:

Financing Activities

Transactions and events where cash is raised from or repaid to investors, such as issuing equity or debt.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with predetermined dividend payments.

Statement of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Direct Method

A way of preparing the cash flow statement where actual cash flows from operating activities are reported.