8. Which of the following statements is correct regarding the unrelated business income tax (UBIT)?

a. To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is regularly carried on by the organization.

b. To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business must be substantially related to the exempt purpose of the organization, and the trade or business must be regularly carried on by the organization.

c. To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is carried on during more than half the year.

d. An exempt entity that conducts a business that competes with for-profit businesses automatically is subject to the UBIT.

9. Which of the following requirements must be satisfied for a bingo game to be classified as not being an unrelated trade or business?

a. The bingo game is legal under both state and local law.

b. The bingo game is conducted by volunteers.

c. For-profit bingo games ordinarily are not permitted in the jurisdiction.

d. Only a. and c. must be satisfied.

10. Exempt Entities must file on which Tax Form?

a. Form 1120

b. Form 1040

c. Form 990

d. Form 8551

11. Under P.L. 86-272, which of the following transactions creates nexus

a. Conducting training classes, seminars, or lectures for persons other than sales personnel.

b. Passing inquiries or complaints on to the home office

c. Maintaining a sample or display room for two weeks or less during the year

d. Maintaining a website that presents information about items of tangible personal property that are for sale.

12. To determine whether an out-of-state entity has income tax nexus, some states use:

a. A factor-presence test.

b. An economic presence test.

c. Both a. and b are used by certain states.

d. Neither a. nor b is used by the states.

13. Which circumstance does not create sufficient nexus:

a. Deriving income within the state

b. Owning property or leased within the state

c. Carrying free samples only for display or distribution

d. Employing persons within the state.

14. Which circumstances creates sufficient nexus?

a. Making repairs or providing maintenance

b. Advertising campaigns

c. Maintaining a sample or display room for two weeks or less during the year

d. Maintaining a website that presents information about items of tangible personal property that are for sale