Engaging in a Prohibited Transaction Can Result in an Exempt

question 6

True/False

Engaging in a prohibited transaction can result in an exempt organization being subject to Federal income tax, but cannot cause it to lose its exempt status unless the exempt organization repeats the prohibited transaction.

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Definitions:

Milkweeds

A group of plants known for their milky sap, serving as the primary food source for monarch butterfly larvae.

Monarch Caterpillars

Caterpillars of the Monarch butterfly, known for their striking striped patterns and feeding on milkweed plants.

Distance Effect

A phenomenon in psychology where the distance between stimuli affects response time; in cognitive tasks, greater distances usually lead to faster responses.

Geographic Location

A specific place or position within a physical space that is identified using coordinates or a descriptive address.