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What are the two basic requirements that must be met in order for something to be considered an excess benefit transactionWhat are the two basic requirements that must be met in order for something to be considered an excess benefit transaction?Answer & ExplanationAn excess benefit transactio...

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  • 13 de octubre de 2024
  • 2
  • 2024/2025
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What are the two basic requirements that must be met in order for something to

be considered an excess benefit transaction?




Answer & Explanation


An excess benefit transaction involves a situation where an economic benefit is

provided by a tax-exempt organization to a disqualified person, and the value of

the benefit exceeds the value of the consideration received in return. The two

basic requirements that must be met for something to be considered an excess

benefit transaction are:


1. Involvement of a Disqualified Person: A disqualified person is typically

someone who has substantial influence over the organization, such as

officers, directors, trustees, or key employees. It can also include family

members of these individuals or entities they control.


2. Excess Benefit: The transaction must result in an economic benefit being

provided by the tax-exempt organization to this disqualified person that

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