Private Foundations

Preface ix Book Citations xi Chapter One: Introduction to Private Foundations 1 1.6 Foundations in Overall Exempt Organizations Context 1 Chapter Two: Starting and Funding a Private Foundation 3 2.5 Acquiring Recognition of Tax-Exempt Status 3 2.7 When to Report Back to the IRS 11 Chapter Three: Types of Private Foundations 13 3.1 Private Operating Foundations 13 Chapter Four: Disqualified Persons 15 4.4 Family Members 15 Chapter Five: Self-Dealing 17 5.3 Definition of Self-Dealing 17 5.4 Sale, Exchange, Lease, or Furnishing of Property 17 5.6 Payment of Compensation 19 5.8 Uses of Income or Assets by Disqualified Persons 19 5.11 Indirect Self-Dealing 20 5.12 Property Held by Fiduciary 20 Chapter Six: Mandatory Distributions 21 6.2 Assets Used to Calculate Minimum Investment Return 21 6.5 Qualifying Distributions 21 6.7 Satisfying the Distribution Test 23 Chapter Seven: Excess Business Holdings 25 7.1 General Rules 25 7.2 Permitted and Excess Holdings 26 7.3 Functionally Related Businesses 26 7.6 Excise Taxes on Excess Holdings 27 Chapter Eight: Jeopardizing Investments 29 8.1 General Rules 29 8.2 Prudent Investments 29 8.3 Program-Related Investments 30 Chapter Nine: Taxable Expenditures 31 9.1 Legislative Activities 31 9.2 Political Campaign Activities 32 9.3 Grants to Individuals 32 9.4 Grants to Public Charities 32 9.5 Grants to Foreign Organizations 33 9.10 Excise Tax for Taxable Expenditures 34 Chapter Ten: Tax on Investment Income 35 10.3 Formula for Taxable Income 35 Chapter Eleven: Unrelated Business Income 37 11.1 General Rules 37 11.3 Rules Specifically Applicable to Private Foundations 37 11.5 Calculating and Reporting the Tax 37 Chapter Twelve: Tax Compliance and Administrative Issues 39 12.1 Successful Preparation of Form 990-PF 39 12.2 Reports Unique to Private Foundations 43 12.3 Compliance Issues 43 Chapter Thirteen: Termination of Foundation Status 49 13.4 Operation as a Public Charity 49 13.5 Mergers, Split-Ups, and Transfers Between Foundations 52 Chapter Fifteen: Private Foundations and Public Charities 53 15.5 Service Provider Organizations 53 15.7 Supporting Organizations 54 Chapter Seventeen: Corporate Foundations 67 17.3 Private Inurement Doctrine 67 17.5 Self-Dealing Rules 67 Chapter Eighteen: Nonprofit Governance and Private Foundations (New) 69 18.1 State Law Overview 70 18.2 Board of Directors Basics 74 18.3 Principles of Fiduciary Responsibility 77 18.4 Duties of Directors 78 18.5 Board Composition and Federal Tax Law 79 18.6 Sources of Nonprofit Governance Principles 81 18.7 Relevant Nonprofit Governance Issues 109 18.8 Nonprofit Governance Policies 131 18.9 Role of IRS in Nonprofit Governance 133 18.10 Governance Principles and Private Foundations 142 Cumulative Table of Cases 149 Cumulative Table of IRS Revenue Rulings and Revenue Procedures 153 Cumulative Table of IRS Private Determinations Cited in Text 157 Cumulative Table of IRS Private Determinations Discussed in Bruce R. Hopkins Nonprofit Counsel 165 Cumulative Table of IRS Private Letter Rulings, Technical Advice Memoranda, and General Counsel Memoranda 169 Table of Private Foundation Law Tax Reform Proposals 185 About the Authors 195 About the Online Resources 197 Cumulative Index 199