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The company presented in the question above is a non-profit company and they are exempt from federal income tax as shown in options A and B.
We can arrive at this answer because:
- Code 501(c) is provided to non-profit companies, that is, companies that do not aim to earn profit from their activities and have a budget, just to keep the company running.
- Within this category are companies 501 (C) (3).
- These companies, in addition to not earning profits, are exempt from federal income taxes as they are considered to have no income.
It is very common to find NGOs in this category of companies.
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