Darien Washington

Unit 6

Corporate income tax

December 1, 2013

1. Because the Church is a not for profit entity, It serves some Common good, Net earnings do not benefit the members of the organization and the organization does not exert political influence. Because of these factors The church is not subject to taxation. Eggshell however is a C corporation and will be subject to double taxation.

5. 1. The Organization serves some type of common good 2. The organization is not a for-profit entity

3, Net earnings do not benefit the members of the organization

4. The organization does not exert political influence.

14. A Private Foundation us an exempt organization subject to additional statutory restrictions on its activities and on contributions made to it. This Classification does carry disadvantage. The first one is that the classification may have an adverse impact on the contributions received by the donee exempt organization. Contributions may decline because the tax consequences for donors may not be as favorable as if the entity were not a private foundation. Second, The classification may result in taxation at the exempt organization level. Also since a private foundation is usually not a broadly, publicly supported organization, it may be subject to taxes such as Tax based on investment income, Tax on self- dealing, Tax on failure to distribute income, Tax on excess business holdings, Tax on investments that jeopardize charitable purposes and tax on taxable expenditures.

24. The purpose of (UBIT) is top treat the entity as if it were subject to the corporate income tax. It neutralizes the exempt entity's tax advantage (which is the real purpose behind UBIT)

32. The City Garden Club is exempt under 501©(5) which means he is required to get IRS Approval before being recognized as being exempt.

2. a) T