IRS Charitable Organizations 3

Question 1

What is the deadline for a new organization (other than a church) to file Form 1023 to be recognized as a 501(c)(3) from its date of formation?

Accepted Answer

27 months

Answer

Organizations must file Form 1023 within 27 months of formation to have their tax-exempt status recognized retroactively to the date of formation.

Question 2

Which schedule of Form 990 must hospitals complete to report community benefit activities?

Accepted Answer

Schedule H

Answer

Schedule H is required for hospitals to report community benefit, community building activities, and billing/collection practices.

Question 3

A 501(c)(3) organization earns $50,000 from renting out office space to an unrelated for-profit business. How is this income generally treated?

Accepted Answer

As unrelated business income subject to UBIT

Answer

Rental income from real property to unrelated parties is generally treated as unrelated business income (UBI) unless certain exclusions apply.

Question 4

Under what circumstance is rental income from real property NOT subject to UBIT for a tax-exempt organization?

Accepted Answer

When the property is not debt-financed and no personal services are provided to tenants

Answer

Rental income from real property is excluded from UBIT when the property is not debt-financed and the organization does not provide substantial services to tenants.

Question 5

What is the annual gross receipts threshold below which a 501(c)(3) organization may file Form 990-N (e-Postcard) instead of Form 990?

Accepted Answer

$50,000 or less

Answer

Organizations whose gross receipts are normally $50,000 or less may satisfy their annual reporting requirement by filing the Form 990-N e-Postcard.

(IRS) Internal Revenue Service Certified Practice Test

(IRS) Internal Revenue Service Certified Practice Test

IRS Charitable Organizations 3