Cumulative Index
References are to sections (§) and to exhibits (Ex.)
A
Abatement
excise taxes, §§ 1.10, 5.15(f), 6.7(d), 9.10(b)
request for abatement regarding underdistribution, sample, Ex. 6.3
taxable expenditure penalty abatement, sample request for, Ex. 9.14
of termination tax, §§ 13.1, 13.7
Abuses, §§ 1.3, 1.10
Accounting
cost allocation, § 10.4
method, §§ 2.7(b), 6.5, 12.3(e), 15.4(a), 15.5, 15.6(a)
professional fees, § 12.1(b)
Achievement awards, § 9.3(b)
Acquisition indebtedness, §§ 6.2(f), 11.4(a)–(c)
Activities, Form 990-PF statements regarding, §§ 12.2(c), 12.2(d), 12.3(e)
Adjusted net income, § 3.1(d)
Administrative expenses, § 6.5(c)
Agricultural, horticultural, or labor organization, § 15.9
Airplanes, gifts of, § 14.2
Amendments
amended returns, § 2.7(c)
articles of organization, § 2.6
Annuity trust, § 14.5
Application for recognition of exemption. See Form 1023, Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code
Appraisals, § 14.6(c)
Appreciated property
charitable contributions, §§ 14.2, 14.4(b), 15.1
qualified appreciated stock rule, §§ 14.4(b), 15.1
Art, §§ 5.8(g), 6.3(f)
Articles of organization
amendments to, § 2.6
private foundations, §§ 1.6, 1.7
sample, Ex. 2.2
supporting organization, § 15.7(c)
Asset test, §§ 3.1(e), 3.1(f)
Assets
fair market value. See Fair market value
gross assets and net assets, § 13.6
net gain (or loss) from sale of assets, Form 990-PF, Part I, line 6, § 12.1(b)
sale of and conversion of tax-exempt hospital to for-profit entity, § 15.7(j)
sale or exchange of capital assets excluded from support, §§ 15.4(b), 15.5, 15.6(c)
transfer of between foundations, § 13.5
transfer of to public charity, §§ 13.1, 13.3, 13.3(a)–(c), 16.5
use of by disqualified person. See Transfer of income or assets to or for benefit of disqualified person
Attentiveness test, §§ 15.7(g), 15.7(g-1)
Audits, §§ 2.7(d), 2.7(e)
Automobiles, gifts of, § 14.2
B
Balance sheets, Form 990-PF, § 12.1(d)
Bank fees, § 5.6(g)
Bargain sale, § 2.4(c)
Beneficial interests, § 4.3
Benefit tickets, § 5.8(f)
Bequeathed property, § 6.2(b)
Boats, gifts of, § 14.2
Business and professional associations, §§ 1.6, 15.9
Business enterprise
defined, § 7.1(a)
effective control, § 7.1(d)
versus functionally related business, § 7.3
and investment partnerships, § 7.1(c)
versus passive income business, § 7.1(b)
percentage limitations for business holdings, §§ 7.1(d), 15.1
unrelated business income, § 11.3(a)
Business judgment rule, § 8.2
Business leagues, § 15.9
Business Master File, §§ 15.8(a), 15.8(b), 15.11
But for test, § 15.7(g)
Bylaws, sample, Ex. 2.2
C
Canada, §§ 9.5, 10.5
Capital gains and losses
capital gain property deduction rule, § 14.4(a)
and charitable contribution deductions, §§ 14.1(a), 14.2
Form 990-PF, Part I, line 7 and line 8, § 12.1(b)
Form 990-PF, Part IV, §§ 10.3(b), 12.1(f)
investment income, §§ 10.3(b), 10.3(i)
limits for trusts and corporations, § 11.5
long-term capital gain property, gifts of, §§ 14.1(b), 14.2, 14.4(a), 14.4(c)
sale or exchange of capital assets excluded from support, §§ 15.4(b), 15.5, 15.6(c)
unrelated business income, §§ 11.1(e), 11.2, 11.5
unrelated business income tax exceptions, § 11.2
wash sales, § 10.3(b)
Cash, fair market value, §§ 6.3(b), 6.3(f)
Cash distribution test, §§ 3.1(h), 6.5(d)
Change of accounting method or year, § 10.4(c)
Chapter 42 tax, § 1.1
Charitable class, § 1.8
Charitable contributions
appraisals, § 14.6(c)
appreciated property, §§ 14.2, 15.1
conduit foundations, § 3.2
deduction for, §§ 3.2, 9.5, 14.1, 14.1(a), 14.1(b), 14.3, 15.1
deduction reduction rules, §§ 14.4, 14.4(a)–(c)
disclosure statements, § 14.6(b)
donation acknowledgment, Ex. 12.8
donee reporting requirements, § 14.6(d)
estate and gift tax, § 14.1(c)
fair market value, §§ 14.1(a), 14.2
Form 990-PF, Part I, line 1, § 12.1(b)
Form 990-PF, Part I, line 25, § 12.1(b)
gifts and jeopardizing investment rules, § 8.1(b)
gifts of indebted property, § 5.5(a)
gifts to donor-advised funds, § 16.2. See also Donor-advised funds
gifts to foreign charity, § 9.5
in general, § 1.4(l)
long-term capital gain property, gifts of, §§ 14.1(b), 14.2, 14.4(a), 14.4(c)
private foundations, § 14.3
qualified appreciated stock rule, §§ 14.4(b), 15.1
substantiation rules, § 14.6(a)
tax law requirements, §§ 14.6, 14.6(a)–(d)
verifying status of public charities, §§ 9.4(c), 15.11(a), 15.11(b)
Charitable distributions. See Distributions
Charitable gift annuity, § 2.4(c)
Charitable Giving Act of 2003, § 6.5(c)
Charitable lead trust, § 2.4(c), §§ 2.4(c), 6.2(b), 14.5
Charitable organizations, §§ 1.7, 1.8
date of organization, § 2.6
nonexempt charitable trusts as, § 3.6
special requirements, § 2.6
Charitable pledges, §§ 5.8(b), 6.2(b)
Charitable purpose, §§ 1.7, 1.8, 9.8
Charitable remainder trusts, §§ 1.1, 2.4(b)
deduction for remainder interest in property, § 14.5
early termination of and self-dealing issues, § 5.13
and minimum investment return formula, § 6.2(b)
Charitable solicitation acts, § 14.6(e)
Charitable solicitation registration, § 2.5(g)
Charitable trusts, §§ 3.5–3.7, 15.7(i)
Charity defined, § 1.7
Checklists
alternative investment checklist, Ex. 8.1
compensation of disqualified persons, Ex. 5.1
Form K-1 analysis for unrelated business income, Ex. 11.3
grant approvals, Ex. 9.2
international grants, activity checklist, Ex. 9.6
organizational issues, Ex. 12.5
pre-grant inquiry checklist, Ex. 9.8
tax compliance for private foundations, Ex. 12.2, Ex. 12.3
taxable expenditure responsibility control checklist, Ex. 9.7
website exemption issues checklist, Ex. 9.13
Churches, §§ 15.3, 15.3(a). See also Religious organizations
Closely held business, fair market value, § 6.3(e)
Collectibles, fair market value, § 6.3(e)
Colleges and universities, §§ 3.5, 15.3, 15.3(d)
Combined voting power, §§ 4.3, 4.5, 5.11
Commodities. See Jeopardizing investment rules
Common fund foundations, §§ 3.3, 14.4(a)
Common trust funds, fair market value, § 6.3(e)
Community foundations, § 3.5
compliance check project, § 15.4(e)
as donative publicly supported charity, § 15.4(d)
donor-advised funds and public charity status, § 16.7
grants to, § 6.5(a)
Community foundations' grantmaking services, § 11.3(d)
Community trust, § 3.5. See also Community foundations
Compensation
bank fees, § 5.6(g)
checklist, compensation of disqualified persons, Ex. 5.1
commissions, § 5.6(e)
defined, § 5.6(b)
to disqualified persons, §§ 5.6(c), 5.6(d)
employment taxes, § 12.3(f)
expense advances and reimbursements, § 5.6(f)
Form 990-PF, Part I, lines 13 and 14, § 12.1(b)
IRS Executive Compensation Study, § 5.6(h)
management fees, § 5.6(e)
payment of as self-dealing, §§ 5.3(a), 5.6
personal services defined, § 5.6(a)
private inurement, § 5.1
reasonable defined, § 5.6(c)
salary statistics, locating, § 5.6(d)
self-dealing, specific acts of self-dealing, § 5.3(a)
self-dealing, undoing transactions, §§ 5.15(a)(v), 5.15(b)(i)
Compliance period, private operating foundations, §§ 3.1(e), 3.1(f)
Computers and office equipment, fair market value, § 6.3(e)
Conduit foundations, §§ 3.2, 14.4(a)
Conflict of interest policy, sample, Ex. 2.2
Constructive ownership, §§ 4.3, 7.1(c), 7.2(b)
Contributions. See also Charitable contributions
defined, § 14.1
Form 990-PF, Part I, line 25, § 12.1(b)
received, Form 990-PF, Part I, line 1, § 12.1(b)
to sponsoring organization, § 16.9
Contributors
Schedule B, sample, Ex. 12.1
Controlled entities, § 11.3(b)
commonly controlled private
foundations, § 13.5(a)
for-profit subsidiaries, § 15.7(k)
foreign corporations, § 12.3(g)
and qualifying distributions, § 6.5(b)
Co-owned property, § 5.4(e)
Corporate foundations
and disqualified persons rules, § 17.4
establishment of, reasons for, § 17.2
and excess business holdings rules, § 17.6(b)
and jeopardizing investments rules, § 17.6(c)
and mandatory payout rules, § 17.6(a)
overview of, § 17.1
and private inurement doctrine, § 17.3
and self-dealing rules, § 17.5
and taxable expenditures rules, § 17.6(d)
Corporations
charitable contribution deduction, § 14.1(b)
as disqualified person, § 4.5
S corporations and unrelated business income, § 11.3(c)
successor transferee corporation, § 13.5
voting power and disqualified persons, § 4.3
Cost allocation, §§ 10.4, 10.4(a), 10.4(b), 12.1(c), Ex. 10.2
Counsel
professional fees, Form 990-PF, § 12.1(b)
reliance on advice of, §§ 1.10, 5.15(e), 5.16, 8.4(b)
D
De minimis rules, fringe benefits, § 5.7(c)
Debt, acquisition indebtedness, §§ 6.2(f), 11.4(a)–(c)
Debt-financed income, §§ 7.1(b), 11.4, 11.4(a)–(c)
Deductions
charitable contributions, §§ 3.2, 9.5, 14.1, 14.1(a), 14.1(b)
estate and gift tax, § 14.1(c)
from income, §§ 10.4(a), 10.4(b)
Department of Justice, position on donor-advised funds, § 16.6
Department of the Treasury, study on supporting organizations, § 15.7(l)
Depreciation, §§ 10.4(a), 11.4(c), 12.1(b), Ex. 12.1, Ex. 12.4
Determination letters, §§ 2.5(c), 15.11(b)
Direct charitable expenditures and qualifying distributions, § 6.5(b)
Direct lobbying, § 9.1(b). See also Legislative activities
Directors and trustees
fiduciary duties, §§ 1.1, 18.3
self-dealing. See Self-dealing
Disaster relief, §§ 9.3(b), 9.3(e), 17.6(d)
Disclosure requirements, § 12.3(b)
Disqualified persons, §§ 1.4(c), 1.9.
See also Self-dealing compensation . See Compensation and corporate foundations , § 17.4
corporations, § 4.5
donor-advised funds, §§ 7.5, 16.9
estates, § 4.6
and excise taxes, § 1.10
family members, § 4.4
foundation managers, § 4.2
governmental officials, § 4.8
and Internet links, § 9.7(d)
partnerships, § 4.5
private foundations, § 4.7
and public support, limitations on, § 15.5(d)
substantial contributors, §§ 4.1, 15.5(d), Ex. 4.2
supporting organizations, §§ 7.4, 15.7(g), 15.7(h), 15.7(i)
terminating status, § 4.9
transfer of income or assets to
or for benefit of, §§ 5.3(a), 5.8, 5.8(a)–(g)
trusts, § 4.6
20 percent owners, §§ 4.3, 7.1, 7.1(d)
Disregarded entities, § 6.5(a)
Dissolution clause, private foundations, § 1.9
Distributable amount, §§ 6.1, 6.4, 6.4(a), 6.4(b), 12.2(i), Ex. 6.1
Distribution test
abatement of tax, § 6.7(d)
excess distributions, § 6.7(b)
and required accumulated income, § 6.7(e)
tax calculation, § 6.7(c)
timing of distributions, § 6.7(a)
undistributed income calculation, § 6.7
Distributions
common fund foundations, § 3.3
conduit foundations, § 3.2
distributable amount, §§ 6.1, 6.4, 6.4(a), 6.4(b), 12.2(i), Ex. 6.1
distribution test, satisfying, §§ 6.7, 6.7(a)–(e)
donor-advised funds, § 16.9
excess distributions, §§ 6.7(a), 6.7(b)
fair market value, measuring, §§ 6.3, 6.3(a)–(f)
Form 990-PF, Part XI, Distributable Amount, § 12.2(i)
Form 990-PF, Part XII, Qualifying Distributions, § 12.2(j)
Form 990-PF, Part XIII, Undistributed Income, § 12.2(k)
legislative history, § 6.8
mandatory distribution rules, overview, § 6.1
minimum investment return, calculating, §§ 6.1, 6.2, 6.2(a)–(f)
payout rules, generally, §§ 1.4(e), 1.10, 6.1
payout rules, private foundations, § 1.4(e)
private operating foundations, §§ 3.1, 3.1(a), 3.1(d)
and prudent investments, § 8.2
public charities, § 15.1
qualifying, §§ 6.5, 6.5(a)–(e), 12.2(j)
qualifying distributions and carryovers, example of application of, Ex. 6.2
request for abatement regarding underdistribution, sample, Ex. 6.3 requirements, generally, §§ 6.1, 15.7(g-1)
to supporting organizations, § 6.6
timing plan to reduce excise tax, Ex. 10.1
undistributed income, §§ 6.5, 6.7, 12.2(k), Ex. 1.2
Dividends, §§ 10.3(d), 11.2, 12.1(b)
Documents
dissemination rules, § 12.3(b)
electronic records, § 12.3(e)
expenditure documentation policy, sample, Ex. 5.2
private foundation organizational issues, description, Ex. 12.5
public inspection requirements, § 12.3(a)
retention of, § 9.6(i)
Donations, acknowledgment of, § 1.1, Ex. 12.8. See also Charitable contributions
Donative entities
accounting method, § 15.6(a)
community foundation compliance check project, §§ 15.4(e), 15.4(e)(i)–(vii)
community foundations, § 15.4(d)
facts and circumstances test, §§ 15.4(c), 15.6(b)
general rules, § 15.4(a)
investment income, § 15.4(b)
one-third support test, §§ 15.4(a), 15.4(b), 15.4(c), 15.6, 15.6(c)
public support, §§ 15.4, 15.6, 15.6(a)
service provider organization compared, §§ 15.6, 15.6(a)–(c)
service provider organizations, unusual grants, § 15.5(c)
support test, § 15.4(b)
2 percent gift limitation, §§ 15.4(a), 15.4(b), 15.6(c)
unusual grants, §§ 15.4(b), 15.6(b)
Donor-advised funds, § 1.1
as account or subaccount of public charity, § 16.1
and community foundations, §§ 16.1, 16.3
defined, § 16.9
disadvantages of compared to private foundation, § 16.8
disqualified persons, §§ 7.5, 16.9
distributions, § 16.9
and donor-directed funds, §§ 16.1, 16.3
excess benefit transactions, § 16.9
excess business holdings, §§ 7.5, 16.9
excise taxes, § 16.9
gifts to, § 16.2
IRS challenges to, § 16.4
and private foundation rules, § 16.8
prohibited material restrictions, §§ 16.3, 16.5, 16.6, 16.8
and public charity status, § 16.7
and sponsoring organizations, § 16.9
statutory criteria, § 16.9
Treasury Department study of, § 16.9
types of, § 16.3
Donor-directed funds, §§ 16.1, 16.3
Dual-use property, §§ 6.2(a), 6.2(d)
E
Economic Recovery Tax Act of 1981, § 6.8
Educational organizations, §§ 1.4, 1.5, 15.3, 15.3(b)
Employee benefits, Form 990-PF, § 12.1(b)
Employees
Form 990-PF, Part VIII, information about highly paid employees, § 12.2(e)
key employees, § 4.3
sharing staff and office expenses, §§ 5.9, 5.9(b)
Employer-related programs, § 9.3(e)
Employment taxes, § 12.3(f), Ex. 12.7
Endowment test, §§ 3.1(d), 3.1(e), 3.1(f), 3.1(h)
Estate and gift tax, §§ 1.1, 2.3(a), 2.3(b), 14.1(c), 14.2
Estates
administration exception, §§ 5.12(a), 5.12(b)
as disqualified person, § 4.6
distributions, investment income, §§ 10.3(d), 10.3(g)
income in respect of a decedent, § 10.3(c)
property bequeathed to private foundation, self-dealing issues, §§ 5.12, 5.12(a), 5.12(b)
Excess benefit transactions
and donor-advised funds, § 16.9
self-dealing, §§ 5.6(c), 5.6(h)(v), 5.6(h)(vi), 5.8(c), 5.9(b), 5.16
supporting organizations, § 15.7(h)
Excess business holdings, §§ 1.4(f), 2.4
business enterprise defined, § 7.1(a)
constructive ownership, § 7.2(b)
controlled organizations, § 11.3(b)
and corporate foundations, § 17.6(b)
disposition periods, § 7.2(c)
and disqualified persons, § 4.3
and dividend income, § 10.3(d)
donor-advised funds, §§ 7.5, 16.9
excise taxes on, § 7.6, Ex. 1.2
functionally related business, §§ 7.3, 7.4
general rules, §§ 7.1, 7.1(a)–(d)
and jeopardizing investment rules, § 8.1(b)
partnerships, §§ 7.1(c), 7.2(b)
passive income businesses, § 7.1(b)
percentage limitations, § 7.1(d)
and permitted business holdings, §§ 7.2, 7.2(a)–(d)
and self-dealing, § 7.1
split-interest trusts, § 3.7
supporting organizations, § 7.4
20 percent limit for business holdings, §§ 7.1(d), 7.2, 7.2(a)
35 percent limit for business holdings, §§ 7.1(d), 7.2, 7.2(a)
trusts, § 7.2(b)
Excise taxes
abatement, §§ 1.10, 5.15(f), 6.7(d), 9.10(b)
articles of organization, provisions of, § 1.9
background, § 1.1
conduit foundations, § 3.2
disqualified persons, excess benefit transactions, § 15.7(h)
donor-advised funds, § 16.9
on excess business holdings, § 7.6
first-tier taxes, §§ 1.10, 5.15(a)(ii), 5.15(c), 5.15(d), 5.15(d)(i), 5.15(f), 5.15(g), 6.7(c)
Form 4720. See Form 4720, Return of Certain Excise Taxes on Charities and Other Persons under Chapters 41 and 42 of the Internal Revenue Code
investment income, Form 990-PF, Part VI, § 12.2(b)
investment income, tax on. See Investment income, tax on (§ 4940 tax)
involuntary termination (third-tier on confiscation) taxes, §§ 1.10, 5.15(d) (iii)
jeopardizing investments, §§ 8.4, 8.4(a)–(c)
jurisdiction issues, § 5.15(g)
and minimum distributable amount, § 6.4
private foundations, Ex. 1.2
second-tier taxes, §§ 1.10, 5.15(a)(ii), 5.15(b), 5.15(c), 5.15(d), 5.15(d)(ii), 5.15(g), 6.7(c)
section 4940 tax (tax on investment income), § 1.4(i)
for taxable expenditures, §§ 9.10, 9.10(a)–(d)
termination tax, §§ 13.1, 13.2, 13.3, 13.6, 13.7
third-tier taxes, §§ 5.15(b), 5.15(d), 5.15(d)(iii), 6.7(c), 7.6, § 8.4(c), 9.10(d)
on undistributed income, §§ 6.5, 6.7(c). See also Distributions
Exempt function assets, §§ 6.2(c), 6.2(e), 6.5(b)
Exempt function income, §§ 15.5, 15.6(a)
Exempt operating foundations, §§ 3.1A, 10.6
Exempt Organizations Office (EO), § 5.6(h)(vi)
Expenditure responsibility rules, §§ 1.4(h), 8.3, 9.6, 9.6(a)–(j), 15.1
Expenses
cost allocation, §§ 10.4, 10.4(a), 10.4(b), 12.1(c), Ex. 10.2
documentation policy, §§ 5.9(b), Ex. 5.2
excess of revenues over expenses
and disbursements, Form 990-PF, § 12.1(b)
Form 990-PF, Analysis of Revenue and Expenses, §§ 12.1, 12.1(a)–(c), Ex. 10.2, Ex. 12.1
operating expenses, § 10.4
other expenses, Form 990-PF, § 12.1(b)
printing and publications, Form 990-PF, § 12.1(b)
private operating foundation, § 3.1(a) reductions to gross investment income, §§ 10.4, 10.4(a), 10.4(b), Ex. 10.2
reimbursements and payments, self-dealing, §§ 5.3(a), 5.6(f)
sharing expenses and self-dealing issues, §§ 5.9, 5.9(b), 5.9(c), 5.9(d)
total expenses and disbursements, Form 990-PF, § 12.1(b)
travel, conference, and meeting expenses, Form 990-PF, § 12.1(b)
Extensions of time
Form 1023, filing, § 2.6
Form 8868, Application for
Extension of Time to File an
Exempt Organization Return, § 12.2
F
Facts and circumstances test, §§ 15.4(c), 15.6(b)
Fair market value
asset held for partial year, § 6.3(c)
and calculating minimum investment return, § 6.3
cash, §§ 6.3(b), 6.3(e)
charitable contributions, §§ 14.1(a), 14.2
closely held business, § 6.3(e)
collectibles, § 6.3(e)
common trust funds, § 6.3(e)
computers and office equipment, § 6.3(e)
date of valuation, § 6.3(b)
mineral interests, §§ 6.3(b), 6.3(e)
notes and accounts receivable, § 6.3(e)
real estate, §§ 6.3(b), 6.3(e)
securities, §§ 6.3(b), 6.3(d), 6.3(e)
unique assets, § 6.3(e)
valuation methods, § 6.3(a)
whole-life insurance policies, § 6.3(e)
Family members as disqualified persons, § 4.4
Fiduciary duties, §§ 1.1, 18.3
Filing
annual private foundation filing requirements, Ex. 12.7
electronic, § 12.1
employment taxes, Ex. 12.7
Form 990-PF, filing deadline, § 12.3(c)
Form 990-PF, filing location, § 12.3(c)
Form 990-PF, filing requirements, § 12.1, Ex. 12.7
Form 990-PF, first-year filers, § 12.3(d)
Form 990-T, filing requirements, Ex. 12.7
Form 1023, §§ 2.5(a), 2.6, 12.3(d) Form 4720, § 12.3(c)
Fiscal year, § 2.7(b)
For-profit subsidiaries, § 15.7(k)
Foreign governments, grants to, §§ 6.5(e), 9.5, Ex. 9.6
Foreign organizations
grants to, §§ 9.5, 9.8
private foundations, §§ 3.8, 10.5
qualifying distributions to, § 6.5(e)
Form 990
accounting method, §§ 15.4(a), 15.5
filing requirements, § 12.1
foreign charitable organizations, § 3.8
key employees, § 4.3
normal support, § 15.4(b)
Part I, example, Ex. 15.2
Part II, example, Ex. 15.3
Part III, example, Ex. 15.4
program services, new or changed, §§ 2.6, 12.2(c)
salary information, § 5.6(d)
Schedule A, §§ 15.4(a), 15.5(c), 15.8(a), 15.8(b), 15.14
Form 990-EZ, §§ 2.7(b), 12.1, 15.8(b)
Form 990-N, § 12.1
Form 990-PF, §§ 2.7, 12.1
amended return, § 2.7(c), 12.3(e)
conduit foundations, § 3.2
cross-reference chart, Ex. 12.1
and distributable amount formula, § 6.4(a), Ex. 6.1
document dissemination rules, § 12.3(b)
electronic records, § 12.3(e)
expenditure responsibility statement, sample, Ex. 9.12
expenditure responsibility rules, §§ 9.6(b), 9.6(h)
failure to file, § 12.1
filing deadline, § 12.3(c)
filing location, § 12.3(c)
filing requirements, § 12.1, Ex. 12.7
first-year filers, § 12.3(d)
and five-year tests for public support, §§ 15.4(a), 15.14
foreign charitable organizations, § 3.8
forms package and downloadable forms, § 12.1
IRS examination (audit), §§ 2.7(d), 2.7(e)
nonexempt charitable trust, § 3.6
Part I, Analysis of Revenue and Expenses, §§ 3.1(d), 6.5(b), 10.3–10.5, 12.1(a)–(c), Ex. 12.1
Part II, Balance Sheets, § 12.1(d), Ex. 12.1
Part III, Analysis of Changes in Net Worth or Fund Balances, § 12.1(e), Ex. 12.1
Part IV, Capital Gains and Losses for Tax on Investment Income, §§ 10.3(b), 12.1(f), Ex. 12.1
Part V, Qualification for Reduced Tax on Net Investment Income, §§ 2.5(a), 10.2(a), 10.4, 12.2(a), Ex. 12.1
Part VI, Excise Tax on Investment Income, §§ 10.1, 12.2(b), Ex. 12.1
Part VII-A, Statements Regarding Activities, §§ 2.5(a)(ix), 2.6, 2.7, 4.2, 9.6(h), 12.2(c), 12.3(e), Ex. 12.1
Part VII-B, Statements Regarding Activities for Which Form 4720 May Be Required, §§ 12.2(d), 12.3(c), 12.3(e), Ex. 12.1
Part VIII, Information about Officers, Directors, Trustees, Foundation Managers, Highly Paid Employees, and Contractors, §§ 5.6, 5.7, 12.2(e), Ex. 12.1
Part IX-A, Summary of Charitable Activities, §§ 6.5(b), 12.2(f) Ex. 10.2, 12.2(g), Ex. 12.1
Part IX-B, Summary of Program-Related Investments, § 12.2(g), Ex. 12.1
Part X, Minimum Investment Return, §§ 6.2, 6.2(a)–(f), 12.2(h), Ex. 12.1
Part XI, Distributable Amount, §§ 6.4(a), 12.2(i), Ex. 12.1
Part XII, Qualifying Distributions, §§ 3.1(d), 6.5, 6.5(a)–(e), 6.7(a), 12.2(j), Ex. 12.1
Part XIII, Undistributed Income, §§ 6.7(c), 12.2(k), Ex. 12.1
Part XIV, Private Operating Foundations, §§ 3.1(d), 6.5(b), 6.7(c), 12.2(l), Ex. 12.1
Part XV, Supplementary Information, § 12.2(m), Ex. 12.1
Part XVI-A, Analysis of Income-Producing Activity, § 12.2(n), Ex. 12.1. See also Unrelated business income
Part XVI-B, Relationship of Activities, § 12.2(n)
Part XVII, Information Regarding Transfers to and Transactions and Relationships with Noncharitable Exempt Organizations, § 12.2(o), Ex. 12.1
parts, §§ 12.1, 12.2, 12.2(a)–(o), Ex. 12.1
preparation of, generally, § 12.1
private foundation conversion to public charity, § 13.4
private operating foundations, § 3.1(d)
public inspection requirements, § 12.3(a)
purpose of, § 12.1
salary information, § 5.6(d)
sample completed form, Ex. 12.1
tax compliance checklists, Ex. 12.2, Ex. 12.3
termination of private foundation
by transfer of assets to public charity, § 13.3(c)
violations, reporting, §§ 12.3(c), 12.3(e)
Form 990-T, Exempt Organization Business Income Tax Return, §§ 2.7(b), 11.5, 12.2, 12.3(b)
filing requirements, Ex. 12.7
reporting requirements, corporation vs. trust, § 11.5, Ex. 11.4
sample, Ex. 12.4
Form 990-W, Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations and on Investment Income for Private Foundations, §§ 11.5, 12.2
Form 1023, Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code
checklist for, Ex. 2.2
electronic filing, § 2.5(a)
EO Technical cases, § 2.5(e)
filing, §§ 2.5(a), 2.6, 12.3(d)
new operating foundation, § 3.1(h)
nonexempt charitable trust, § 3.6
overview, § 2.5
power of attorney (Form 2848), Ex. 2.2
preparing, § 2.5(a)
processing time, § 2.5(d)
rulings and determination letters, § 2.5(c)
sample, Ex. 2.2
Schedule H, sample, Ex. 2.3
state tax exemption, § 2.5(g)
substantially completed application, § 2.5(b)
timely filing, § 2.6
user fees, § 2.5(f)
Form 1023-EZ, § 2.5
Form 1041, nonexempt charitable trust, § 3.6
Form 1065, §§ 6.5(b), 11.5
Form 1098, Contributions of Motor Vehicles, Boats, and Airplanes, § 14.2
Form 2220, Underpayment of Estimated Tax by Corporations, Ex. 12.1, Ex. 12.4
Form 2848, § 2.5(a)
Form 2848, Power of Attorney, Ex. 2.2
Form 4562, Depreciation and Amortization, Ex. 12.4
Form 4720, Return of Certain Excise Taxes on Charities and Other Persons under Chapters 41 and 42 of the Internal Revenue Code, §§ 1.8, 5.15, 6.7(d), 12.2, 12.3(b), 12.3(c), 12.3(e)
excess business holdings, § 7.6
excise tax on taxable expenditures, § 9.10(b)
request for penalty abatement, sample, Ex. 9.14
sample completed form, Ex. 12.6
Form 8283, § 14.6(c)
Form 8734, §§ 9.4(c), 15.11(a), 15.14
Form 8868, Application for Extension of Time to File an Exempt Organization Return, § 12.2
Form 8940, §§ 6.5(d), 9.2(c), 9.3(g), 13.1, 13.3, 13.4, 15.5(c), 15.7(g), 15.8(d)
Form K-1, §§ 6.5(b), 10.3(a), 10.3(h), 11.3(c), 12.3(g), Ex. 11.3
Foundation managers, § 4.2
Fraternal organizations, § 1.6
Fringe benefits
de minimis rules, § 5.7(c)
working condition fringe benefits, § 5.7(c)
Functionally related business, §§ 3.1(e), 6.2(c), 7.4
defined, § 7.3
and unrelated business income, § 11.3(b)
Fund balances, Form 990-PF, § 12.1(e)
Funding, § 2.2
Fundraising, state regulation of, § 14.6(e)
G
Gains and losses. See Capital gains and losses
Gifts. See also Charitable contributions
automobiles, boats, and airplanes, § 14.2
bequeathed property and minimum investment return formula, § 6.2(b)
to donor-advised funds, § 16.2
long-term capital gain property, §§ 14.1(b), 14.2, 14.4(a), 14.4(c)
planned giving, §§ 1.1, 2.4, 2.4(a), 2.4(b), 14.1(a), 14.5
Goods, services, or facilities
ability of private foundation to pay, § 5.9(a)
group insurance, § 5.9(c)
office space and staff, sharing, § 5.9(b)
public facilities, § 5.9(d)
self-dealing, §§ 5.3(a), 5.4(d), 5.9
Governance
board composition and federal tax law, § 18.5
board of directors basics, § 18.2
directors, duties of, § 18.4
fiduciary responsibility, principles of, § 18.3
governance issues, § 18.7
governance principles, source of, § 18.6
governance, IRS role in, § 18.9
policies, governance, § 18.8
private foundations and governance principles, § 18.10
state law overview, § 18.1
Government officials
as disqualified persons, § 4.8
payments to as self-dealing, §§ 5.3(a), 5.10
Governmental units, §§ 15.3, 15.3(e)
Grantees
expenditure responsibility rules, §§ 9.6(a), 9.6(e), 9.6(f), 9.6(g), 9.6(j)
report, samples, Ex. 9.11
Grantors, verifying public charity status, §§ 9.4(c), 15.11(a), 15.11(b)
Grants
approval checklist, Ex. 9.2
to community foundations, § 6.5(a)
direct grants, qualifying distributions, § 6.5(a)
diversion of funds by grantee, § 9.6(j)
documentation, § 1.1
earmarked, §§ 6.5(a), 9.1(c), 9.2(b), 9.4(d)
expenditure responsibility agreement, samples, Ex. 9.9, Ex. 9.10
expenditure responsibility rules, §§ 1.4(h), 8.3, 9.6(a)–(j), 15.1
family foundations, statistics on, § 1.3
Form 990-PF, Part I, line 1, § 12.1(b)
Form 990-PF, Part I, line 25, § 12.1(b) grant agreement letter, Ex. 9.4
to individuals, §§ 1.4(h), 3.1(c), 9.3, 9.3(a)–(h), 9.8
to intermediary organizations, § 9.4(d)
international grants, activity checklist, Ex. 9.6
and legislative activities. See Legislative activities
monitoring, § 9.6(d)
to noncharitable organization, §§ 6.5(a), 15.1
payment transmittal, sample, Ex. 9.5
pledges, § 6.5(a)
political campaign activities, § 9.2(b)
pre-grant inquiry checklist, Ex. 9.8
private foundation organizational issues, description, Ex. 12.5
private operating foundations, §§ 3.1 (b), 3.1(c). See also Distributions
to public charitable organizations, §§ 1.4(e), 9.4, 9.4(a)–(d)
and qualifying distributions, § 6.5(b)
recoverable grants, § 8.3
redistributions, § 6.5(a)
research and experimentation, § 3.4
scholarships and fellowships. See Individuals, grants to self-dealing , § 9.3(b)
subsequent use rule, § 9.1(d)
to supporting organizations, § 6.6
unusual grants, §§ 15.4(b), 15.5(c), 15.6(a), 15.6(b)
Grassroots lobbying, § 9.1(b). See also Legislative activities
Gross sales, Form 990-PF, § 12.1(b)
GuideStar, § 15.11
H
Health care organizations, § 15.7(j)
Hedge funds, § 8.2(a)
Hospitals, §§ 15.3, 15.3(c), 15.7(j)
I
Income
adjusted net income, Form 990-PF, § 12.1(b)
debt-financed income rules, § 7.1(b)
investment. See Investment income modifications, Form 990-PF, § 12.1(b)
other income, Form 990-PF, § 12.1(b)
passive income business, § 7.1(b) use of by disqualified person. See Transfer of income or assets to or for benefit of disqualified person Income and estate tax planning, §§ 1.1, 2.3(a), 2.3(b)
Income in respect of a decedent, § 10.3(c)
Income test, §§ 3.1(c), 3.1(d)
Indemnification, §§ 5.7, 5.7(a), 5.7(b), 5.8(g)
Individuals, grants to, §§ 1.4(h), 3.1(c), 9.3, 9.3(a)–(h), Ex. 9.1
Insiders, §§ 5.1, 5.2. See also Private inurement doctrine
Insurance
fringe benefit rules, § 5.7(c)
group insurance, § 5.9(c)
officers' and directors' liability insurance, §§ 5.7, 5.7(a), 5.7(b)
whole-life policies, fair market value, § 6.3(f)
Integral part test, supporting
organizations, §§ 15.7(g), 15.7(g-1)
Intellectual property, gifts of, § 14.2
Interest
Form 990-PF, § 12.1(b)
investment income, § 10.3(c)
unrelated business income tax exceptions, § 11.2
Intergovernmental immunity, § 1.6
Internal Revenue Code (IRC)
charitable purposes, § 1.7
overview, § 1.1
Internal Revenue Service (IRS)
audits, §§ 2.7(d), 2.7(e)
Business Master File, §§ 15.8(a), 15.8(b), 15.11
community foundation compliance check project, § 15.4(e)
Cyber Assistant program, § 2.5(a)
determination letter, reliance on, § 15.11(b)
donor-advised funds, challenges to, § 16.4
Executive Compensation Study, § 5.6(h)
expenditure responsibility statement, sample, Ex. 9.12
Publication 78, §§ 9.4(c), 15.8(b), 15.11(a)
reports to, expenditure
responsibility grants, § 9.6(h)
request for approval of individual grant program, sample, Ex. 9.1
ruling policy, § 15.7(m)
International organizations, § 9.5
Internet, §§ 9.7, 9.7(a)–(d), 11.2(e), Ex. 9.13
Investment fraud, §§ 6.3(g), 8.4, 9.8, 10.3(b), 10.3(j), 10.4
Investment income
adjusted net income, Form 990-PF, Part I, line 27c, § 12.1(b)
capital gains and losses, §§ 10.3(b), 10.3(i), 12.1(f)
corporate foundations, § 17.6(e)
dividends, § 10.3(d)
donative entities, §§ 15.4(b), 15.6
estate distributions, § 10.3(g)
Form 990-PF, Part VI, § 12.2(b)
fraction, §§ 15.5(a), 15.5(c)
fraudulent, § 10.3(j)
gross investment income, §§ 10.3, 10.3(a), 10.3(b), 10.4, 10.4(a), 10.4(b), 15.5, 15.5(a), 15.5(b), 15.5(c), 15.10
interest, § 10.3(c)
methods of measuring, §§ 8.2(e), 8.2(f)
net investment income, §§ 10.3, 12.1(b), 12.2(a)
one-third gross investment income test, §§ 15.5, 15.5(a), 15.5(b), 15.5(c), 15.6, 15.6(c), 15.10
partnerships, § 10.3(h)
rentals, § 10.3(e)
royalties, § 10.3(f)
service provider organizations, investment income test, §§ 15.4(c), 15.5, 15.5(a), 15.5(b), 15.5(c), 15.6, 15.9, 15.10
tax on. See Investment income, tax on (§ 4940 tax)
trust distributions, § 10.3(g)
Investment income, tax on (§ 4940 tax)
cost allocation, §§ 10.4, 10.4(a), 10.4(b), Ex. 10.2
excise taxes on private foundations, generally, §§ 1.10, 2.4(d), 3.1(a), 15.1, Ex. 1.2
exemption, § 10.6
foreign foundations, § 10.5
gross investment income, §§ 10.3, 10.3(a), 10.3(b), 10.4, 10.4(a), 10.4(b)
rate of tax, § 10.1
tax reduction planning, §§ 10.2, 10.2(a)–(c), Ex. 10.1
taxable income calculation, §§ 10.3, 10.3(a)–(i)
Investments
alternatives, §§ 8.2(a), 8.2(b), Ex. 8.1. See also Jeopardizing investment rules
diversification, § 8.2(b)
fiduciary responsibilities of directors and trustees, § 1.1
jeopardizing. See Jeopardizing investment rules
managers, liability for excise taxes, §§ 8.4, 8.4(a)
offshore investments, § 12.3(g)
program-related, §§ 8.1, 8.3, 9.6(c), 11.3(b)
prudent investor rule, §§ 8.2, 8.2(a)–(f)
risk versus return, § 8.2(c)
total return investing, §§ 8.2(d), 8.2(e)
J
Jeopardizing investment rules, §§ 1.4(g), 2.4(d), 15.1
and corporate foundations, § 17.6(c)
donated assets, § 8.1(b)
and excess business holdings, § 8.1(b)
excise taxes, §§ 8.4, 8.4(a)–(c), Ex. 1.2
general rules, §§ 8.1, 8.1(a), 8.1(b)
investment alternative checklist, Ex. 8.1
investment alternatives, Ex. 8.2
investment risk pyramid, Ex. 8.3
jeopardy defined, § 8.1(a)
program-related investments, §§ 8.1, 8.3
prudent investments, §§ 8.2, 8.2(a)–(f)
removing investment from jeopardy, § 8.4(c)
split-interest trusts, § 3.7
types of investments closely scrutinized, § 8.1(a)
Joint ownership of property, § 5.4(e)
Joint ventures, excess business holding rules, § 7.2(b)
Jurisdiction, excise taxes, § 5.15(g)
K
Key employees, § 4.3
Knowledge networks, IRS, § 1.6
L
Labor organizations, § 1.6
Leases and rental arrangements charitable lease, § 6.5(b)
private inurement, § 5.1
rental income, §§ 10.3(e), 11.2, 11.2(b)
sale, exchange, or leasing of property, §§ 5.3(a), 5.4, 5.4(c)
Legislative activities
grants to charities that lobby, § 9.1(c)
monitoring grant requirements, § 9.6(d)
nonpartisan analysis, study, or research, § 9.1(d)
private foundation restrictions, §§ 9.1, 9.1(a), 9.1(b), 15.1
proposal, § 10.7
public charities, § 15.1
self-defense exception, § 9.1(e)
Legislative history, §§ 1.1, 1.10
excess business holding rules, § 7.1(c)
mandatory distribution requirement, § 6.8
private foundation tax law, § 15.2
Life insurance, gifts of, § 2.4(c)
Limited liability companies (LLCs), §§ 3.1(a), 5.4(e), 6.5(a), 6.5(b)
Liquidation, §§ 1.9, 13.5, 13.5(c)
Loans and extensions of credit interest-free loans, § 5.5(b)
loan guarantee for benefit of disqualified person, § 5.8(g)
to make expenditures for tax-exempt purpose, § 6.5(a)
private inurement, § 5.1
program-related investments, § 8.3
as self-dealing, §§ 5.3(a), 5.5, 5.5(a), 5.5(b)
undoing loan to correct self-dealing, § 5.15(a)(iii)
unrelated business income tax
exceptions, § 11.2
Lobbying activities, § 9.1. See also Legislative activities
Lobbying Disclosure Act of 1995, § 9.1(a)
Long-term capital gain property, gifts of, §§ 14.1(b), 14.2, 14.4(a), 14.4(c)
Look-through rule, § 9.4(d)
Low-profit limited liability companies, § 8.3
M
Managers
Form 990-PF, Part VIII, information about, § 12.2(e)
jeopardizing investments, excise taxes for, §§ 8.4, 8.4(a)
taxable expenditures, liability for excise taxes, §§ 9.10(a), 9.10(c)
termination tax and involuntary termination of foundation, § 13.2
Medical research organizations, § 15.3, 15.3(c)
Membership dues or fees, §§ 5.8(e), 15.6(c)
Merchandise, sale of, § 11.1(b), 11.2(d), 11.4(b), Ex. 11.2
Mergers, §§ 13.5, 13.5(a)–(d)
Mexico, § 9.5
Mineral interests, §§ 6.3(b), 6.3(f), 10.3(f), 11.2(a)
Minimum distribution requirement, §§ 1.4(e), 15.1, 16.8
Minimum investment return (MIR), §§ 3.1(d), 6.1, 6.2
acquisition indebtedness, § 6.2(f)
assets held for future charitable use, § 6.2(e)
dual-use property, §§ 6.2(a), 6.2(d)
exempt function assets, §§ 6.2(c), 6.2(e)
fair market value of assets, §§ 6.3, 6.3(a)–(f)
Form 990-PF, Part X, § 12.2(h)
future interests or expectancies, § 6.2(b)
investment assets, §§ 6.2, 6.2(a)
Mission-related investments, § 8.2(g)
Myopia rule, § 7.2(b)
N
Neighborhood land rule, § 11.4(b)
Net worth, Form 990-PF, § 12.1(e)
Nonbusiness activities, § 11.2(d)
Noncharitable exempt organizations,
Form 990-PF, information
regarding transfers and
relationships with, § 12.2(o)
Noncharitable purposes, § 9.8
Noncharitable supported organizations, § 15.9
Notes and accounts receivable, fair market value, § 6.3(f)
O
Occupancy costs, Form 990-PF, Part I, line 20, § 12.1(b)
Office space and self-dealing issues, §§ 5.9, 5.9(b), 5.9(d), 5.14
Officers and directors
Form 990-PF, Part VIII, § 12.2(e)
liability insurance, §§ 5.7, 5.7(a), 5.7(b)
private foundations, § 4.2
Offshore investments, §§ 8.2(a), 12.3(g)
One percent rule, § 10.2(a)
One-third support test donative entities, §§ 15.4(a), 15.4(b), 15.4(c), 15.6, 15.6(c)
service provider organizations, §§ 15.4(c), 15.5, 15.5(a), 15.5(b), 15.5(c), 15.6, 15.6(c), 15.9, 15.10
supporting organizations, §§ 15.9, 15.10
Operational test, §§ 1.8, 5.2, 15.7(a)
Opinion letters, reliance on, § 5.15(e)
Options, § 6.2(b)
Ordinary income property, §§ 14.1(a), 14.2, 14.4(c)
Organizational form, § 2.1
Organizational issues, description, Ex. 12.5
Organizational test, §§ 1.9, 15.7(a)
P
Partial interests, gifts of, §§ 14.1(a), 14.2, 14.5
Partnerships
capital interest, § 7.1(d)
as disqualified person, § 4.5
excess business holding rules, §§ 7.1(c), 7.2(b)
investment income, § 10.3(a), 10.3(h)
investment partnerships, § 7.1(c)
offshore, §§ 8.2(a), 12.3(g)
profits interest, §§ 4.3, 7.1(d)
publicly traded, § 11.3(c)
and self-dealing, § 5.4(e)
unrelated business income, § 11.3(c)
Pass-through foundations, §§ 3.2, 14.4(a)
Passive income business, §§ 7.1(b), 11.2, 11.2(a)–(e), 11.3(b), 11.5
Patents, gifts of, § 14.2
Payout rules, §§ 1.7, 1.8, 17.6(a). See also Distributions
Penalties. See Excise taxes
Personal services exception, § 5.8(a)
Planned giving, §§ 1.1, 2.4, 2.4(a), 2.4(b), 14.1(a), 14.5
Political campaign activities, §§ 9.2, 9.2(a)–(c)
Political organizations, § 1.6
Ponzi scheme investments, §§ 6.3(g), 8.4, 9.8, 10.3(b), 10.3(j), 10.4
Pooled income fund, § 14.5
Presumption, charitable organizations as private foundations, §§ 1.1, 2.6, 15.14
Printing and publication expense, § 12.1(b)
Private benefit doctrine, §§ 5.2, 18.9(g)
Private foundations
alternatives to, § 1.1
business holdings, permitted, §§ 7.2, 7.2(a)–(d)
characteristics of, § 1.2
conversion to or from private operating foundation, § 3.1(h)
creating, procedure for, Ex. 2.1
defined, §§ 1.2, 1.3, 15.2
as disqualified person, § 4.7
excess business holdings. See Excess business holdings
excise taxes, Ex. 1.2
exempt operating foundations. See Exempt operating foundations filing requirements, annual, Ex. 12.7
for-profit corporations, related foundations, § 3.5
foreign, §§ 3.8, 10.5
history, § 1.3
lobbying activities. See Legislative activities
mandatory distributions. See Distributions
and nonexempt charitable trusts, § 3.6
number of, §§ 1.1, 1.3
organizational issues, description, Ex. 12.5
presumption, §§ 1.1, 2.6, 15.14
and private benefit doctrine, § 5.2
public charities compared, § 15.1, Ex. 15.1
and relationships created for tax avoidance purposes, § 15.10
role of, § 1.3
split-interest trusts treated as, § 3.7
tax compliance checklist, Ex. 12.2, Ex. 12.3
tax rules, summary of, Ex. 1.1
termination of. See Termination of private foundation
transfer of assets between
foundations, § 13.5, Ex. 13.1
treatment as until terminated, § 15.12
unique nature of, § 1.1
Private interests versus charitable class, § 1.8
Private inurement doctrine, § 5.1
Private operating foundations, § 1.1
active programs, §§ 3.1(a), 3.1(d), 3.1(e)
advantages of, § 3.1(g)
asset test, §§ 3.1(d), 3.1(e), 3.1(f)
and capital gain property deduction rule, § 14.4(a)
compliance period, §§ 3.1(e), 3.1(f), 3.1(h)
conversion to or from, § 3.1(h)
disadvantages of, § 3.1(g)
distribution requirement, §§ 3.1, 3.1(a), 3.1(d), 6.7(a)
endowment test, §§ 3.1(d), 3.1(e), 3.1(f), 3.1(h)
exempt, § 3.1(i)
expenses, § 3.1(a)
Form 990-PF, Part XIV, § 12.2(l)
grants to other organizations, § 3.1(b)
income test, §§ 3.1(c), 3.1(d)
individual grant programs, § 3.1(c)
overview, § 3.1
qualifying distributions, § 3.1(d)
significant involvement, § 3.1(c)
support test, §§ 3.1(d), 3.1(e), 3.1(f)
types of, § 3.1
Professional advisors, reliance on advice of, §§ 1.10, 5.15(e), 5.16, 8.4(b)
Professional fees, §§ 10.4(a), 12.1(b)
Profits interest of partner, § 4.3
Program-related investments, §§ 8.1, 8.3, 9.6(c), 11.3(b), 12.2(g)
Prohibited transactions, foreign
private foundations, § 3.8
Property tax exemptions, § 2.5(g)
Proprietorships, excess business holding rules, § 7.2(b)
Prudent investor, § 1.1
Prudent investor rule, §§ 8.1(a), 8.2
Prudent man rule, § 8.2. See also Prudent investor rule
Prudent trustee, § 8.2
Public charities, §§ 1.1, 1.2
categories of, §§ 15.1, 15.2, 15.8(a)–(c)
charitable contribution deductions, §§ 14.1(a), 14.2, 14.3
conversion to supporting organization, § 13.4
donative entities, §§ 15.4, 15.4(a)–(e)
eligible recipients of assets of
private foundation, § 13.3(c)
grants to, §§ 1.6, 9.4, 9.4(a)–(c)
private charities compared, § 15.1, Ex. 15.1
private foundation operating as, § 13.4
private foundation presumption, §§ 1.1, 2.6, 15.14
reclassification, §§ 13.4, 15.8(a)–(c)
specified public charities, §§ 15.7(a), 15.7(b), 15.7(c), 15.7(g)
and supporting organizations, § 15.7. See also Supporting organizations
termination of status as, § 15.14
transfer of assets to and voluntary termination of private foundation, §§ 13.1, 13.3, 13.3(a)–(c), 16.5
verifying status as, §§ 9.4(c), 15.11(a), 15.11(b)
Public institutions, §§ 15.2, 15.3, 15.3(a)–(e)
Public officials, § 4.8
Public safety organizations, §§ 15.2, 15.13
Publicly supported charitable
organizations, §§ 15.2, 15.4, 15.4(a)–(e), 15.5, 15.5(a)–(d), 15.6
Q
Qualified appreciated stock rule, §§ 14.4(b), 15.1
Qualified organization contract research, § 3.4
Qualifying distributions, § 1.4(e)
and Charitable Giving Act of 2003, § 6.5(c)
direct charitable expenditures, § 6.5(b)
direct grants, § 6.5(a)
to foreign recipients, § 6.5(e)
Form 990-PF, Part XII, § 12.2(j)
overview, § 6.5
private operating foundations, § 3.1(d)
set-asides, §§ 6.5, 6.5(d)
test, § 3.1(h)
R
Real estate
acquisition indebtedness, §§ 6.2(f), 11.4(a), 11.4(b)
fair market value, §§ 6.3(b), 6.3(f)
unrelated business income, § 11.1(e)
Reasonable cause, § 1.10
Reasonableness standard, § 5.1
Recordkeeping, § 1.1
private foundation organizational issues, description, Ex. 12.5
Related-use property, § 11.4(b)
Reliance
on grantee information, § 9.6(g)
professional advisors, reliance on advice of, §§ 1.10, 5.15(e), 5.16, 8.4(b)
Religious organizations, §§ 1.6, 1.5, 9.1(c). See also Churches
Rental income
Form 990-PF, Part I, line 5, § 12.1(b)
investment income from rentals, § 10.3(e)
unrelated business income tax exceptions, §§ 11.2, 11.2(b)
Reorganizations, hospitals and other health care organizations, § 15.7(j)
Reports and monitoring
charitable contributions, done reporting requirements, § 14.6(d)
expenditure responsibility grants, § 9.6(h)
expenditure responsibility report to IRS, sample, Ex. 9.12
grantee reports, samples, Ex. 9.11
grants to individuals, § 9.3(f)
new activity, § 2.6
tax-exempt status, §§ 2.7, 2.7(b)
unrelated business income tax, § 11.5
violations, reporting, § 12.3(e)
Research, unrelated business income tax exceptions, § 11.2(c)
Research and experimentation funds, § 3.4
Responsiveness test, supporting organizations, §§ 15.7(g), 15.7(g-1)
Revenue. See also Investment income ; Unrelated business income
Form 990-PF, Analysis of Revenue and Expenses, §§ 12.1, 12.1(a)–(c), Ex. 12.1
Royalties, §§ 10.3(f), 11.2, 11.2(a)
S
S corporations, unrelated business income, § 11.3(c)
Sale, exchange, or leasing of property
agents, transactions by, § 5.4(a)
co-owned property, § 5.4(e)
exchanges of property, § 5.4(b)
goods, services, or facilities, furnishing of, § 5.4(d)
leasing of property, § 5.4(c)
net gain (or loss) from sale of assets, Form 990-PF, Part I, line 6, § 12.1(b)
overview, § 5.4
specific acts of self-dealing, § 5.3(a)
undoing sales by foundation to disqualified person, § 5.15(a)(i)
undoing sales to foundation by disqualified person, § 5.15(a)(ii)
unrelated business income, § 11.1(e)
Sanctions, §§ 1.10, 5.1, 5.2. See also Excise taxes
Savings bonds, § 10.3(c)
Scholarships, fellowships, and prizes, §§ 9.3(c), 9.3(e), 9.3(f), 9.3(h)
Scientific organizations, §§ 1.6, 1.8
Section 4940 tax, §§ 1.4(i), 2.4(d)
Securities
dividends, §§ 10.3(d), 12.1(b)
fair market value, §§ 6.3(b), 6.3(e), 6.3(f)
qualified appreciated stock rule, §§ 14.4(b), 15.1
security lending transactions, § 6.2(f)
and self-dealing, §§ 5.4, 5.8(a), 5.14, 5.15(b)(ii)
Self-dealing, § 1.4(d)
abatement, § 5.15(f)
amount involved, §§ 5.15(b), 5.15(b)(i)–(ii)
compensation, §§ 5.3(a), 5.6, 5.6(a)–(h), 5.15(a)(v), 5.15(b)(i)
counsel, reliance on advice of, §§ 5.15(e), 5.16
date of valuation, § 5.15(c)
defined, § 5.3
and early terminations of charitable remainder trusts, § 5.13
exception for transactions pursuant to business restructuring, § 5.14
and excess business holding rules. See Excess business holdings
excise taxes, private foundations, Ex. 1.2
fringe benefit rules and volunteers, § 5.7(c)
goods, services, or facilities, furnishing, §§ 5.3(a), 5.9, 5.9(a)–(d)
government officials, payments to, §§ 5.3(a), 5.10
grants to individuals, § 9.3(b)
indemnification and officers' and directors' liability insurance, §§ 5.7, 5.7(a), 5.7(b)
indirect acts, § 5.3, 5.11, 5.12(b)
and Internet links, § 9.7(d)
IRS regulation project, § 5.16
jurisdiction of court as to taxes, § 5.15(g)
loans and extensions of credit, §§ 5.3(a), 5.5, 5.5(a), 5.5(b), 5.15(a)(iii)
noncharitable purpose expenditures, § 9.8
office expenses, sharing, §§ 5.9, 5.9(a)–(d)
and planned gifts, § 2.4(d)
private foundations versus public charities, § 15.1
property held by fiduciaries, §§ 5.12, 5.12(a), 5.12(b)
quid pro quo transactions, § 14.6(b)
regulatory exceptions, § 5.3(c)
sale, exchange, or leasing of property, §§ 5.3(a), 5.4, 5.4(a)–(e), 5.15(a)(i), 5.15(a)(ii)
sanctions, §§ 1.10, 5.15, 5.16. See also Excise taxes
savings provisions (transitional rules), § 5.14
securities, §§ 5.4, 5.8(a), 5.14, 5.15(b)(ii)
specific acts, §§ 5.3, 5.3(a)
statutory exceptions, § 5.3(b)
and substantial contributors, §§ 4.1, 15.5(d), Ex. 4.2
taxes, payment of, §§ 5.15, 5.15(d), 5.15(d)(i)–(iii)
transfer of income or assets to or for benefit of disqualified person, §§ 5.3 (a), 5.8, 5.8(a)–(g), 5.15(a)(iv)
undoing the transaction, §§ 5.15, 5.15(a), 5.15(a)(i)–(v)
Self-defense exception, § 9.1(e)
Service provider organizations, §§ 15.4, 15.5
donative entities compared, §§ 15.6, 15.6(a)–(c)
investment income test, §§ 15.4(c), 15.5, §§ 15.5, 15.5(a), 15.5(b), 15.5(c), 15.6, 15.9, 15.10
limitations on support, § 15.5(d)
method of accounting, §§ 15.4(a), 15.6(a)
normal sources of support, § 15.(b)
one-third support test, §§ 15.4(c), 15.5, 15.5(a), 15.5(b), 15.5(c), 15.6, 15.6(c), 15.9, 15.10
tax avoidance, relationships created for, § 15.10
unusual grants, §§ 15.5(c), 15.6(a), 15.6(b)
Set-asides, § 6.5(e)
Significant voice test, supporting organizations, § 15.7(g)
Social clubs, §§ 1.6, 9.6(a)
Social welfare organizations, §§ 1.6, 2.6, 15.9, 15.12
Split-interest trusts, §§ 1.9, 3.5, 3.7, 7.2(b), 14.5
Sponsoring organizations, § 16.9
Sponsorship payments, §§ 15.4(b), 15.5
State law
charitable solicitation registration, § 2.5(g)
fundraising regulation, § 14.6(e)
and organizational rules, § 1.9
tax exemption, § 2.5(g)
State taxes, Ex. 12.7
Steps in creating private foundation, § 2.1
Subsidiaries. See Controlled entities Substantial contributors, §§ 4.1, 15.5(d), Ex. 4.2
Substantial part test, §§ 9.1(a), 9.1(b)
Substantially related activity, §§ 11.1, 11.1(c)
Suitability test, § 6.5(d)
Support fraction, §§ 15.4(a), 15.4(b), 15.5, 15.5(b), 15.5(c), 15.5(d)
Support test
donative public supported organization, § 15.4(b)
private operating foundation, §§ 3.1(d), 3.1(e), 3.1(f)
Supporting organizations, §§ 1.1, 1.2, 3.5, 15.2, 15.7
attentiveness requirement, § 15.7(g-1)
control, limitation on, § 15.7(i)
Department of Treasury study, § 15.7(l)
disqualified persons, §§ 7.4, 15.7(g), 15.7(h), 15.7(i)
distribution requirement, § 15.7(g-1)
distributions to, §§ 6.6, 9.9
and donor-advised funds, § 16.9
excess benefit transactions, § 15.7(h)
excess business holdings, § 7.4
for-profit subsidiaries, § 15.7(k)
functionally integrated, § 15.7(g)
functionally related business, §§ 7.3, 7.4
grants to public charities, § 9.4(b)
and hospital reorganizations, § 15.7(j)
integral part test, §§ 15.7(g), 15.7(g-1)
IRS ruling policy, § 15.7(m)
noncharitable supported organizations, § 15.9
nonfunctionally integrated, § 15
notification requirement, § 15.7(g-1)
one-third support test, §§ 15.9, 15.10
operational test, § 15.7(b)
organizational test, § 15.7(a)
proposed regulations, § 15.7(g)
public charity conversion to, § 13.4
reclassification, §§ 15.8(b), 15.8(c)
required relationships, § 15.7(d)
responsiveness test, §§ 15.7(g), 15.7(g-1)
significant voice test, § 15.7(g)
specified public charities, §§ 15.7(a), 15.7(b), 15.7(c), 15.7(g)
tax avoidance, relationships created for, § 15.10
2 percent gift limitation, §§ 15.4(a), 15.6(c)
Type I (operated, supervised, or controlled by), §§ 6.6, 9.4(b), 9.4(c), 15.7, 15.7(e), 15.7(g), 15.11
Type II (supervised or controlled in connection with), §§ 6.6, 9.4(b), 9.4(c), 15.7, 15.7(f), 15.7(g), 15.11
Type III (operated in connection with), §§ 1.1, 6.6, 9.4(b), 9.4(c), 9.9, 15.7, 15.7(g), 15.7(g-1), 15.11, 16.9, Ex. 1.1
T
Tax accounting year, § 2.7(b)
Tax avoidance, § 15.10
Tax compliance checklist for private foundation, 12.3, Ex. 12.2, Ex. 12.3
Tax credits, research and experimentation, § 3.4
Tax-exempt organizations
choice of organizational form, § 2.1
Form 1023. See Form 1023, Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code
types of, § 1.6
Tax-exempt status
actions causing change in, § 2.7
amended returns, § 2.7(c)
changes in organization, reporting, § 2.7
changes in tax methods, reporting, § 2.7(b)
eligibility for, § 2.5
Form 1023. See Form 1023, Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code state law, § 2.5(g)
Tax methods, changes in, § 2.7(b)
Tax Reform Act of 1969, §§ 1.3, 5.14, 5.15, 6.1, 6.7(e), 15.2
Tax Reform Act of 1976, §§ 6.3(e), 6.8
Tax Reform Act of 1984, §§ 9.6(j) 15.11(b)
Tax treaties, §§ 3.8, 10.5
Taxable expenditures, § 1.4(h)
and corporate foundations, § 17.6(d)
correcting, § 9.10(d)
excise taxes, §§ 9.10, 9.10(a)–(d), Ex. 1.2
expenditure responsibility agreement, samples, Ex. 9.9, Ex. 9.10
expenditure responsibility rules, §§ 9.6(a)–(j)
grants to foreign organizations, § 9.5
grants to individuals, §§ 9.3, 9.3(a)–(h)
grants to public charities, §§ 9.4, 9.4(a)–(d)
Internet activities, §§ 9.7, 9.7(a)–(d)
legislative activities, §§ 9.1, 9.1(a)–(e)
noncharitable purposes, § 9.8
penalty abatement, sample request for, Ex. 9.14
political campaign activities, §§ 9.2, 9.2(a)–(c)
pre-grant inquiry checklist, Ex. 9.8
responsibility control checklist, Ex. 9.7
supporting organizations, distributions to, § 9.9
Taxes
annual tax compliance checklist for private foundations, Ex. 12.2, Ex. 12.3
Form 990-PF, Part I, line 118, § 12.1(b)
state taxes, § 2.5(g), Ex. 12.7
Termination of private foundation, §§ 1.2, 15.12
abatement of tax, §§ 13.1, 13.7
dissolution clause, § 1.9
involuntary, § 13.2
mergers, split-ups, and transfers between foundations, §§ 13.5, 13.5 (a)–(d)
noncontrolled recipient, § 13.5(d)
operation as public charity, § 13.4
termination tax, §§ 13.1, 13.2, 13.3, 13.6, 13.7
transfer of assets to public charity, §§ 13.1, §§ 13.3, 13.3(a)–(c), 16.5
voluntary, §§ 13.1, 13.3
Thirty-five percent limit for business holdings, §§ 7.1(d), 7.2, 7.2(a)
Title-holding corporations, §§ 1.6, 7.1(b)
Trade associations, § 15.9
Trade or business income, §§ 11.1(a)–(e). See also Unrelated business income
Transfer of income or assets to or for benefit of disqualified person art, § 5.8(g)
benefit tickets, § 5.8(f)
charitable pledges, payment of, § 5.8(b)
“for the benefit of” transactions, § 5.8(c)
incidental or tenuous benefits, § 5.8(d)
indemnification of lender, § 5.8(g)
loan guarantees, § 5.8(g)
membership dues or fees, § 5.8(e)
securities, § 5.8(a)
as self-dealing, §§ 5.3(a), 5.8
specific acts of self-dealing, § 5.3(a)
undoing self-dealing transactions, § 5.15(a)(iv)
Transfers between foundations, § 13.5, Ex. 13.1
Travel, conference, and meeting expenses, Form 990-PF, § 12.1(b)
Travel and study grants to individuals, §§ 9.3(a), 9.3(f), 9.8
Trusts
charitable lead trust, § 2.4(c)
charitable remainder trusts, §§ 1.1, 2.4(b), 5.13
charitable trusts, §§ 3.5, 3.6
community trust, § 3.3
as disqualified person, § 4.6
disqualified persons, § 4.6
distributions, investment income, § 10.3(g)
excess business holding rules, § 7.2(b)
split-interest, §§ 1.9, 3.5, 3.7
substantial contributors, § 4.1
Twenty percent owners, §§ 4.3, 7.1, 7.1(d), 7.2(a)
U
Undistributed income, §§ 6.5, 6.7, 12.2(k), Ex. 1.2
Unified Registration Statement, § 2.5(g)
Uniform Management of Institutional Funds Act (UMIFA), § 8.2
Uniform Prudent Investor Act, § 8.2
Uniform Prudent Management of Institutional Funds Act (UPMIFA), § 8.2
Universities, §§ 3.5, 15.3, 15.3(d)
Unrelated business income
comparison of corporations and trusts, Ex. 11.4
debt-financed income, §§ 11.4, 11.4(a)–(c)
exceptions, §§ 11.2, 11.2(a)–(e)
Form K-1 analysis for unrelated business income, Ex. 11.3
functionally related business, § 11.3(b)
general rules, § 11.1(a)–(e)
gross income, § 11.5
in general, § 1.4(m)
Internet links and revenue, §§ 9.7(d), 11.2(e)
and investment income, §§ 10.3(d), 10.3(e), 10.3(h)
nonbusiness activities, § 11.2(d)
offshore investments, § 12.3(g)
partnerships, § 11.3(c), Ex. 11.3
and passive source income, § 7.1(b)
passive loss limits, § 11.5
private foundation specific rules, §§ 11.3, 11.3(a)–(c)
program-related investments, § 11.3(b)
real estate activities, § 11.1(e)
regularly carried on requirement, §§ 11.1(a), 11.1(d)
Unrelated business income S corporations, § 11.3(c)
substantially related activity, §§ 11.1, 11.1(c)
tax on. See Unrelated business income tax
trade or business income, §§ 11.1(a), 11.1(b)
Unrelated business income tax
calculating and reporting, § 11.5
and mandatory distribution amount calculation, §§ 6.1, 6.4
offshore investments, § 12.3(g)
Unusual grants, § 15.5(c)
V
Valuation, §§ 6.3(a), 6.3(b), 6.7(d), 14.6(c)
Veteran's organizations, § 1.6
Volunteers, §§ 5.7(c), 11.2(d)
Voter registration drives, §§ 9.2(c), 9.8
Voting power, §§ 4.3, 4.5, 5.11, 7.1(d)
W
Website exemption issues checklist, Ex. 9.13
Willful neglect, § 1.10
Worker, Homeownership, and Business Assistance Act of 2009, § 11.5
Working condition fringe benefits, § 5.7(c)
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