Determine the federal income tax consequences

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Question - Wellness, Inc., a § 501(c)(3) organization, makes lobbying expenditures of $340,000 this year. Exempt purpose expenditures were $600,000 for the first six months of the year and $950,000 for the last six months of the year.

a. Determine the Federal income tax consequences to Wellness if it does not make the § 501(h) lobbying election. Wellness, Inc. is assessed a penalty tax of $.

b. Determine the Federal income tax consequences to Wellness if it does make the § 501(h) lobbying election.

If Wellness makes the § 501(h) election, it is eligible to make lobbying expenditures on basis.

Wellness is assessed a tax on the excess lobbying expenditures and the amount of tax is $.

Reference no: EM132102587

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