Which choice most effectively uses data from the table to complete th… | Verbal SAT Question

Verbal·Information and Ideas·Command of Evidence

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Reasons for Form 4720 Filings by Taxable Activity, 2003–2005 (% of filings)

Taxable Activity	2003 (%)	2004 (%)	2005 (%)
Self-dealing	7	8	9
Undistributed income	90	88	87
Taxable expenditures	3	3	3
Excess business holdings	1	1	1

While US public charities, like Kaiser Foundation Hospitals, must file Form 990 yearly with the IRS, private foundations, such as the Gordon and Betty Moore foundation, must file a different form, 990-PF. In addition, foundations that engage in certain prohibited activities must also file Form 4720 and pay a penalty tax on the money involved. Private foundations are prohibited from holding excess interests in a business enterprise, “self-dealing” (conducting activities that benefit foundation insiders), making taxable expenditures such as grants to non-charitable entities, and failing to cross a required threshold in making charitable distributions from income. Out of the organizations that filed Form 990-PF in the years 2003–2005,

Which choice most effectively uses data from the table to complete the assertion?

a greater percentage of those that also filed Form 4720 did so because they held excess interests in a business enterprise than the percentage of those that filed Form 4720 because they did not meet the minimum charitable distribution requirement.

more of those that also filed Form 4720 failed to meet a minimum charitable distribution requirement than did those organizations that filed Form 990 but also filed Form 4720 for the same reason.

those that were also required to file Form 4720 because they had excess holdings in a business enterprise paid, on average, a significantly smaller penalty than those organizations that filed Form 4720 because they engaged in self-dealing.

those that were also required to file Form 4720 were more likely to do so because they did not meet the minimum charitable distribution requirement than for other reasons.