Which of the Following Statements Regarding the Unrelated Business Income

question 6

Multiple Choice

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

• A)Private foundations are not 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)Only a.and c.are correct.
• E)None of the statements is correct.

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Definitions:

Interest

The cost of borrowing money, expressed as a percentage, or the income earned on invested funds.

Goodwill Method

An accounting approach used to assess the monetary value of goodwill in the merging or acquisition of businesses.

Capital Balance

The amount of funds contributed by owners or shareholders, plus retained earnings and minus any distributions to owners or shareholders.

Independent Appraisal

The process of determining the value of an asset, property, or company by a professional appraiser who is not influenced by any party involved in the transaction.