The exempt organization 501(c)(3) that is classified as a private foundation, generates investment income...
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Accounting
The exempt organization 501(c)(3) that is classified as a private foundation, generates investment income of $500,000 for the current tax year. This amount represents 18% of their total income.
1. What type of tax is imposed on this organization associated with its investment income?
2. Is the receipt of this investment income likely to result in the organization losing its exempt status? Why or why not?
3. Would your answers in parts (a) and (b) change if the $500,000 represented greater than 50% of the organization's total income? Explain.
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