Question

You have recently discovered that a local business has been designated 501(c)(3). Which of the following must be true?(1 point)
Responses

The business does not earn profits.
The business does not earn profits.

The business is a public charity.
The business is a public charity.

The business is a private foundation.
The business is a private foundation.

The business has federal tax exemptions.
GPT-4o mini
The correct statement is:

**The business has federal tax exemptions.**

A 501(c)(3) designation means that the organization is recognized as a nonprofit entity that is exempt from federal income tax and can receive tax-deductible charitable contributions. The other statements may not necessarily be true. For example, a 501(c)(3) organization can earn profits, but those profits must be used to further its charitable purposes. Additionally, a 501(c)(3) can be either a public charity or a private foundation, depending on how it is funded and operated.

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