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.

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.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter23: Exempt Entities

Section: Chapter Questions

Problem 13CE

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