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Stay updated on the latest tax regulations with this private foundation tax manual

Knowledge of tax regulations surrounding private foundations isn't enough if you're an executive of such an organization or a professional supporting a tax-exempt foundation. Annual changes to IRS rules and increased scrutiny by regulators mean it's necessary for you to keep abreast of myriad changes that come into existence each year. From authors Bruce R. Hopkins and Jody Blazek comes the definitive guide for those responsible for guiding the financial and tax filing operations of private foundations.

The complexity of tax regulations related to private foundations extends to a level that is out of proportion to the relatively small number of such entities. Nonetheless, recent statutory requirements that apply solely to private foundations can make untangling filing and reporting activities overly burdensome without a developed knowledge of the underlying theory and practice. To navigate this maze of add-on regulations, Hopkins and Blazek provide background knowledge, in-depth explanations of regulatory changes, and real-world examples to bring as much simplicity to the process as possible.
Receive guidance from the 2007 Outstanding Nonprofit Lawyer Award recipient
Learn about the details of private foundation taxes from leading experts in the field
Make use of checklists and sample documents to prepare organizational filings
Utilize line-by-line instructions for completing exemption applications and forms

For professionals working closely with private foundations, including accountants, lawyers, and foundation executives, Private Foundations: Tax Law and Compliance, 4th Edition is a welcome resource for keeping your clients or your organization on the right track.

Private Foundations: Tax Law and Compliance

Preface xiii
Book Citations xix
1 Introduction to Private Foundations 1

1.1 Private Foundations: Unique Organizations 1

1.2 Definition of Private Foundation 5

1.3 History and Background 6

1.4 Private Foundation Law Primer 9

1.5 Statistical Profile 16

1.6 Foundations in Overall Exempt Organizations Context 17

1.7 Definition of Charity 18

1.8 Operating for Charitable Purposes 19

1.9 Organizational Rules 24

1.10 Private Foundation Sanctions 26
2 Starting and Funding a Private Foundation 33

2.1 Choice of Organizational Form 33

2.2 Funding a Foundation 36

2.3 Estate Planning Principles 38

2.4 Foundations and Planned Giving 39

2.5 Acquiring Recognition of Tax-Exempt Status 44

2.6 Special Requirements for Charitable Organizations 104

2.7 When to Report Back to the IRS 107
3 Types of Private Foundations 117

3.1 Private Operating Foundations 117

3.2 Conduit Foundations 139

3.3 Common Fund Foundations 141

3.4 Research and Experimentation Funds 142

3.5 Other Types of Foundations 143

3.6 Nonexempt Charitable Trusts 144

3.7 Split-Interest Trusts 147

3.8 Foreign Private Foundations 149
4 Disqualified Persons 153

4.1 Substantial Contributors 153

4.2 Foundation Managers 158

4.3 Certain 20 Percent Owners 159

4.4 Family Members 161

4.5 Corporations or Partnerships 162

4.6 Trusts or Estates 162

4.7 Private Foundations 163

4.8 Governmental Officials 163

4.9 Terminating Disqualified Person Status 166
5 Self-Dealing 169

5.1 Private Inurement Doctrine 171

5.2 Private Benefit Doctrine 174

5.3 Definition of Self-Dealing 180

5.4 Sale, Exchange, Lease, or Furnishing of Property 184

5.5 Loans and Other Extensions of Credit 196

5.6 Payment of Compensation 200

5.7 Indemnification and Insurance 221

5.8 Uses of Income or Assets by Disqualified Persons 227

5.9 Sharing Space, People, and Expenses 238

5.10 Payments to Government Officials 243

5.11 Indirect Self-Dealing 245

5.12 Property Held by Fiduciaries 251

5.13 Early Terminations of Charitable Remainder Trusts 256

5.14 Additional Exceptions 257

5.15 Issues Once Self-Dealing Occurs 260
6 Mandatory Distributions 273

6.1 Distribution Requirements--In General 273

6.2 Assets Used to Calculate Minimum Investment Return 275

6.3 Measuring Fair Market Value 285

6.4 Distributable Amount 294

6.5 Qualifying Distributions 297

6.6 Distributions to Certain Supporting Organizations 319

6.7 Satisfying the Distribution Test 322

6.8 History of the Mandatory Distribution Requirement 329
7 Excess Business Holdings 335

7.1 General Rules 335

7.2 Permitted and Excess Holdings 341

7.3 Functionally Related Businesses 347

7.4 Rules Applicable to Certain Supporting Organizations 350

7.5 Rules Applicable to Donor-Advised Funds 350

7.6 Excise Taxes on Excess Holdings 351
8 Jeopardizing Investments 353

8.1 General Rules 354

8.2 Prudent Investments 359

8.3 Program-Related Investments 373

8.4 Investment Frauds 379

8.5 Excise Taxes for Jeopardizing Investments 382
9 Taxable Expenditures 387

9.1 Legislative Activities 389

9.2 Political Campaign Activities 399

9.3 Grants to Individuals 402

9.4 Grants to Public Charities 424

9.5 Grants to Foreign Organizations 434

9.6 Expenditure Responsibility 440

9.7 Internet and Private Foundations 459

9.8 Spending for Noncharitable Purposes 465

9.9 Distributions to Certain Supporting Organizations 468

9.10 Excise Tax for Taxable Expenditures 468
10 Tax on Investment Income 477

10.1 Rate of Tax 478

10.2 Reducing the Excise Tax 480

10.3 Formula for Taxable Income 488

10.4 Reductions to Gross Investment Income 501

10.5 Foreign Foundations 509

10.6 Exemption from Tax on Investment Income 510

10.7 Legislative Proposal 511
11 Unrelated Business Income 513

11.1 General Rules 514

11.2 Exceptions 525

11.3 Rules Specifically Applicable to Privat