Determine the tax consequences for innovation

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Reference no: EM13130830

Innovation, Inc., a 501(C) (3) medical research organization, makes lobbying expenditures of $1.1 million. Innovation incurs exempt purpose expenditures of $15 million in carrying out its medical research mission.
a. Determine the tax consequences for Innovation if it does not elect to be eligible to participate in lobbying activities on a limited basis.
b. Determine the tax consequences for Innovation if it does elect to be eligible to participate in lobbying activities on a limited basis.
c. In light of pending health care legislation, Innovation is considering increasing its lobbying expenditures by 50% annually. Advise Innovation whether this is a wise thing to do from an after-tax perspective.

Reference no: EM13130830

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