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Helpers, Inc

Accounting

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Helpers, Inc., a qualifying § 501(c)(3) organization, incurs lobbying expenditures of $249,000 for the taxable year and grass roots expenditures of $0. Exempt purpose expenditures for the taxable year are $1,660,000. Helpers elects to make lobbying expenditures on a limited basis. Click here to access Exhibit 23.2.

If required, round your answers to nearest dollar.

a.  What amount of lobbying expenditures is Helpers allowed to make tax-free under the terms of the election?
$fill in the blank 1

b.  What is its tax liability as a result of the election?
$fill in the blank 2

 

Exhibit 23.2Calculation of Lobbying Nontaxable Amount

Exempt Purpose Expenditures	Lobbying Nontaxable Amount Is
Not over $500,000	20% of exempt purpose expenditures
Over $500,000 but not over $1 million	$100,000 +15% of the excess of exempt purpose expenditures over $500,000
Over $1 million but not over $1.5 million	$175,000 + 10% of the excess of exempt purpose expenditures over $1 million
Over $1.5 million	$225,000 + 5% of the excess of exempt purpose expenditures over $1.5 million