PRINCIPLES OF TAXATION F/BUS...(LL)
PRINCIPLES OF TAXATION F/BUS...(LL)
23rd Edition
ISBN: 9781260433197
Author: Jones
Publisher: MCG
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Chapter 11, Problem 1IRP
To determine

Identify the tax issues and state the issues in the form of a question.

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Kanlungan, Inc., is a registered non-stock, non-profit entity with the purpose of helping the poor mainly by gathering donations from benevolent donors and distributing the same to the needy. On one occasion, Kanlungan, Inc., used a certain amount of donation to purchase a commercial stall. Kanlungan designated some of its staff to operate the commercial stall to generate income to boost the funds of the organization. Is the income from the stall taxable?  a. No, as long as it is used for the main purpose of the organization. b. No, as long as the organization is tax exempt, its transactions remain tax exempt as well. c. Yes, the income is from an unrelated source hence, taxable. d. Answer not given.
The Shannon Community Kitchen provides hot meals to homeless and low-income individuals and families; it is the organization's only program. It is the policy of the kitchen to use restricted resources for which the purpose has been met before resources without donor restrictions. The Kitchen had the following revenue and expense transactions during the 2023 fiscal year. 1. Cash donations without donor restrictions of $26,200 were received. A philanthropist also contributed $4,200, which was to be used for the purchase of Thanksgiving dinner foodstuffs. 2. A local grocery store provided fresh produce with a fair value of $1,300. The produce was immediately used. 3. Volunteers from the local university contributed 160 hours to preparation and serving of meals. The estimated fair value of their labor was $1,950. 4. The Kitchen received a $6,200 federal grant for the purchase of institutional kitchen appliances. 5. A local foundation gave the Kitchen $7,200 to support serving hot meals…
The Fleming Foundation is a charitable organization founded by Gaylord Fleming and Sandy Fleming. The Flemings intended for the charity to provide programs in health care for older persons, particularly those in poverty. The two main program divisions of the foundation are mental health and housing for elderly individuals. In addition to these programs, the foundation also provides health care educational programs and has a significant fund-raising effort to help the foundation grow and accomplish the goals of the founders. The foundation is organized into two operating departments-education and program management. These departments are supported by two service departments-information technology (IT) and administration. To summarize, there are four departments (two service departments and two operating departments) and two programs (mental health and housing for older adults). The service department costs are allocated to the operating departments, and then the operating department…

Chapter 11 Solutions

PRINCIPLES OF TAXATION F/BUS...(LL)

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