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

Question

Responses

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
The business has federal tax exemptions

Answer 1

If a local business has been designated as a 501(c)(3), the following must be true:

The business has federal tax exemptions.

In the context of 501(c)(3) status, organizations are typically granted federal tax exemptions on income and may be able to receive tax-deductible donations. However, whether the organization is a public charity or a private foundation depends on additional criteria regarding funding sources and public support. Therefore, it cannot be definitively stated that the organization is a public charity or a private foundation based solely on the 501(c)(3) designation.