REG: 501(c)(3) exempt Organization

  • Creator
    Topic
  • #201325
    Future Ninja
    Participant

    Which of the following may qualify for exempt status under IRC 501(c)(3)?

    A. Individual.

    B. Medical School.

    C. Local College

    D. Partner.

    I need help please.

    AUD - 79 (expired) retaking July 28,2016
    FAR - 76 expiring July 31, 2016
    BEC - 85
    REG - 74,74,74,74,59,70,

Viewing 13 replies - 1 through 13 (of 13 total)
  • Author
    Replies
  • #772005
    Spartans92
    Participant

    is it B ?

    BEC- PASS

    #772006
    rithzz
    Participant

    B or C? You could make the argument for both.

    AUD: 78
    BEC: 81
    FAR: 73, 85
    Reg: 84

    #772007
    Missy
    Participant

    The best answer is likely C. A case could probably be made for B but c is more likely.

    Licensed Massachusetts Non Reporting CPA since 2012
    Finance/Admin/HR Manager

    #772008
    Anonymous
    Inactive

    @ mla11692 can you please explain the reason why you think C is the best answer.

    #772009
    Spartans92
    Participant

    I am guessing because some medical schools are for profit and do not fully qualify for the exemption status? Compared to local colleges are pretty much public schools, hence, government entity/NFP so they qualify the 501(c)(3)? Just my guess

    BEC- PASS

    #772010
    Missy
    Participant

    Well primarily because the gist of a 501(c)(3) is that they provide a benefit to the community they serve. I think its much more likely that a local college benefits its community than a medical school (whose students are most likely from outside the community they are located in.) Its the word local that makes me think that more than it being an educational institution.

    Licensed Massachusetts Non Reporting CPA since 2012
    Finance/Admin/HR Manager

    #772011
    Anonymous
    Inactive

    @ Spartans 92
    thank you for the explanation ,
    Spartans 92 Is there are some criteria to know which organization is exempt or not ?

    As I know that these are exempt organizations (501)(c)(3)
    Religious
    scientific
    literary
    educational
    charitable
    testing for the public safety
    foster national and international amateur sports
    prevention of cruelty to children and animals

    But don't know how to choose in between school and college.

    #772012
    Stilgoin
    Participant

    I’m going to say B. medical school- because it is promoting health in a community.

    B | 62, 78
    A | 73, 67, 79
    R | 82
    F | 59, 59, Waiting

    Ethics | 93

    "Success is not final, failure is not fatal: it is the courage to continue that counts."
    ~Winston Churchill

    “In a world full of critics, be an encourager."

    #772013
    Spartans92
    Participant

    I am actually not studying for REG but this was briefly covered in FAR under the GNFP and my governmental accounting course. I was going off the for profit vs non profit idea.

    BEC- PASS

    #772014
    Stilgoin
    Participant

    There are good points about the word local too, so which is it? B or C?

    B | 62, 78
    A | 73, 67, 79
    R | 82
    F | 59, 59, Waiting

    Ethics | 93

    "Success is not final, failure is not fatal: it is the courage to continue that counts."
    ~Winston Churchill

    “In a world full of critics, be an encourager."

    #772015
    Anonymous
    Inactive

    I think we need the OP to post back with the answer so that we can then theory-craft as to how the review materials obtained that answer. I'm wondering if this is a question that allows multiple answers to be selected, because it says “may qualify”, not “is most likely to qualify”, and both a local college and a medical school may qualify, but an individual or a partner can't be a 501(c)(3).

    The official text for 501(c)(3) is here: https://www.law.cornell.edu/uscode/text/26/501

    (3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

    Under this definition, I don't see anything that would make a local college any more qualified than a medical school, as both are definitely in the “educational purposes” category. Some are for-profit, of course, and would therefore not qualify, but that can be true of both. Personally, if I had to pick one as the best answer, I'd lean towards “medical school”, since a government-funded local college seems more likely to me than a for-profit medical school, and I wouldn't generally think of a governmental entity as a 501(c)(3), though I suppose it could be organized as such.

    I don't see anything in 501(c)(3) itself referring to local, so I think that B and C are both equally valid in the wording of 501(c)(3) itself. I'd want to know what the right answer is and what defense the review material gave for its answer before theory-crafting further as to what would make one or the other more or less right.

    #772016
    Future Ninja
    Participant

    @Lilla – I'd like to know the answer too. B or C?

    AUD - 79 (expired) retaking July 28,2016
    FAR - 76 expiring July 31, 2016
    BEC - 85
    REG - 74,74,74,74,59,70,

    #772017
    Anonymous
    Inactive

    @Future Ninja Where did you get the question from? If it was from sample MCQs, do you have the answer that they provided?

Viewing 13 replies - 1 through 13 (of 13 total)
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