Home / CPA Course / REG

Tax-exempt organizations

REG Chapter 23 · Area V · Blueprint V.F

Charities, churches, trade associations, social clubs and civic leagues can be exempt from federal income tax, but each kind of exemption comes with rules. This chapter sorts the main types of exempt organization under §501(c), explains what a §501(c)(3) charity must do to qualify and stay qualified, separates public charities from private foundations and the extra excise taxes foundations face, and then covers the tax that exempt organizations do pay: tax on unrelated business income. It ends with the annual Form 990 returns and how a reviewer checks them. Reggie advises the Bayview Arts Center, a local nonprofit, and Mina's family foundation. Figures are for tax year 2026.

In this chapter

  1. Types of tax-exempt organizations
  2. Qualifying and staying qualified under §501(c)(3)
  3. Public charities and private foundations
  4. Private foundation rules
  5. Unrelated business income: what is taxed
  6. Unrelated business income: exclusions and the computation
  7. Annual returns and reviewing an exempt organization

This chapter has 7 lessons, 50 practice MCQs with explanations and 20 simulations, plus flashcards and a recall sheet.

What this chapter covers

Chapter 22: Limited liability companies · Chapter 24: IRS forms workshop