This course will review private foundation excise tax rules and their implications for completing Form 990-PF. Discuss the excise taxes in conjunction with applicable parts of Form 990-PF and relevant questions. Learn the differences between non-operating (grant-making foundations) and operating foundations; different private foundation excise taxes; and the significance of columns (a)-(d) in Part I of the form as well as expense allocation in Part I, which includes indirect costs between net investment income and charitable expenses. Receive an overview of the expenditure responsibility requirements and equivalency determinations for foreign grants, grants to domestic private foundations and grants to non-charitable entities, the income distribution calculation and the unrelated business income tax (UBIT) and implications, including a discussion of state filing. Also, understand excess business holdings and go over adjusted gross income limitations for various gifts to foundations.
Learning Objectives
• Recognize transactions where excise tax rules apply to private foundations
• Identify differences between grantmaking and private operating foundations
• Learn the Section 4940 tax rate
• Determine the average fair market value calculation for cash and securities
• Recognize additional reporting requirements for foreign grant expenses and grants to other U.S. private foundations
• Recognize issues surrounding excess business holdings, self-dealing and program-related investments
• Identify fundamentals of the unrelated business income tax (UBIT) and understand the implications of final regulations affecting offsetting of income versus losses from alternative investments and changes to net operating loss reporting
Major Topics
• Private foundation excise taxes, generally
• Form 990-PF, including mandatory e-filing requirements
• The fair market value of the foundation's assets
• Income distribution requirements
• Self-dealing and transactions with disqualified persons
• Foreign grant-making and grant-making to private foundations and non-charitable entities in the US
• Excess business holdings
• Program-related investments
• Unrelated business income tax
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