Exercise 23-12 (Algorithmic) (LO. 3) Helpers, Inc., a qualifying 501(c)(3) organization, incurs lobbying expenditures of $306,000 for the taxable year and grass roots expenditures of $0. Exempt purpose expenditures for the taxable year are $2,040,000. Helpers elects to be eligible to make lobbying expenditures on a limited basis. Click here to access Exhibit 23.2. If required, round your answers to nearest dollar. a. What amount of lobbying expenditures is Helpers allowed to make tax-free under the terms of the election? b. What is its tax liability as a result of the election? c. Select your answer to part (b) as a Microsoft Excel formula. LOBBYTAX=MAX(0,(.25x(LOBBYEXPEND-LOBBYNONTAX))) Feedback Check My Work Most organizations that are appropriately classified as exempt organizations are exempt from Federal income tax. Four exceptions to f general statement exist, however. An exempt organization that engages in a prohibited transaction or is a so-called feeder organizatic subject to tax. If the organization is classified as a private foundation, it may be partially subject to tax. Finally, an exempt organizati subject to tax on its unrelated business taxable income. Previous 792 iterat re Lab tot als les Exhibit 23.2 Calculation of Lobbying Nontaxable Amount Exempt Purpose Expenditures Not over $500,000 Lobbying Nontaxable Amount Is Q Search this course X AAB Over $500,000 but not over $1 million 20% of exempt purpose expenditures* $100,000 +15% of the excess of exempt purpose expenditures over $500,000 Over $1 million but not over $1.5 million $175,000 + 10% of the excess of exempt purpose expenditures Over $1.5 million over $1 million $225,000+ 5% of the excess of exempt purpose expenditures over $1.5 million > Determining the Tax An electing public charity is assessed a 25 percent tax on its excess lobbying expenditures. Excess lobbying expenditures are the greater of the following amounts. * 4 The excess of the lobbying expenditures for the taxable year over the lobbying nontaxable amount, or The excess of the grass roots expenditures for the taxable year over the grass roots nontaxable amount