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

A business designated as 501(c)(3) is a nonprofit organization that is tax-exempt under federal law. Based on the options provided, here's a breakdown:

1. The business has federal tax exemptions. - This statement is true; 501(c)(3) organizations are exempt from federal income tax.

2. The business does not earn profits. - This statement can be misleading. While a 501(c)(3) organization can earn profits, those profits must be reinvested back into the organization's mission rather than being distributed to shareholders or owners.

3. The business is a public charity. - Not all 501(c)(3) organizations are public charities; some are classified as private foundations. So, this statement may not always be true depending on the specific classification.

4. The business is a private foundation. - Again, not all 501(c)(3) organizations are private foundations.

Out of these statements, the only one that must be unequivocally true for any 501(c)(3) organization is "The business has federal tax exemptions."