Instructions For Form 990-Pf - Return Of Private Foundation Or Section 4947(A)(1) Nonexempt Charitable Trust Treated As A Private Foundation - 2001 Page 25
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30treated as an excess distribution out of
individual or corporation is not applying
4942(j)(5) and also meet the endowment
corpus. This amount may be carried over
the limit imposed on deductions for
test described below.
and applied to later years.
contributions to the foundation of capital
If the foundation is a section
gain property), the foundation must
Line 5 — Excess qualifying
4942(j)(5) organization, complete only
comply with certain distribution
distributions carryover applied to
lines 1a, 1b, 2c, 2d, 2e, and 3b. Enter “N/
requirements.
2001. Enter any excess qualifying
A” on all other lines in the Total column
distributions from line 3, which were
By the 15th day of the 3rd month after
for Part XIV.
applied to 2001, in both the Corpus
the end of the tax year in which the
column and the 2001 column. Apply the
foundation received the contributions, the
Private operating foundation (section
oldest excess qualifying distributions first.
donee foundation must distribute as
4942(j)(3)). The term “private operating
Thus, the organization will apply any
qualifying distributions out of corpus:
foundation” means any private foundation
excess qualifying distributions carried
that spends at least 85% of the smaller of
a. An amount equal to 100% of all
forward from 1996 before those from later
its adjusted net income or its minimum
contributions received during the year in
years.
investment return directly for the active
order for the individual contributor to
conduct of the exempt purpose or
Line 6a. Add lines 3f, 4c, and 4e.
receive the benefit of the 50% limit on
functions for which the foundation is
Subtract line 5 from the total. Enter the
deductions and
organized and operated (the Income
net total in the Corpus column.
b. Distribute all contributions of
Test) and that also meets one of the
property only so that the individual or
Line 6c. Enter only the undistributed
three tests below.
corporation making the contribution is not
income from 1999 and prior years for
subject to the section 170(e)(1)(B)(ii)
1. Assets test. 65% or more of the
which either a notice of deficiency under
limitations.
foundation’s assets are devoted directly
section 6212(a) has been mailed for the
to those activities or functionally related
section 4942(a) first-tier tax, or on which
If the organization is applying excess
businesses, or both. Or 65% or more of
the first-tier tax has been assessed
distributions from prior years (i.e., any
the foundation’s assets are stock of a
because the organization filed a Form
part of the amount in Part XIII, line 3f) to
corporation that is controlled by the
4720 for a tax year that began before
satisfy the distribution requirements of
foundation, and substantially all of the
2000.
section 170(b)(1)(E) or 4942(g)(3), it must
assets of the corporation are devoted to
Lines 6d and 6e. These amounts are
make the election under Regulations
those activities or functionally related
taxable under the provisions of section
section 53.4942(a)-3(c)(2). Also, see
businesses.
4942(a), except for any part that is due
Regulations section 1.170A-9(g)(2).
2. Endowment test. The foundation
solely to misvaluation of assets to which
Enter on line 7 the total distributions
normally makes qualifying distributions
the provisions of section 4942(a)(2) are
out of corpus made to satisfy the
directly for the active conduct of the
being applied (see Part VII-B, line 2b).
restrictions on amounts received from
exempt purpose or functions for which it
Report the taxable amount on Form 4720.
donors described above.
is organized and operated in an amount
If the exception applies, attach an
that is two-thirds or more of its minimum
Line 8 — Outdated excess distributions
explanation.
investment return.
carryover. Because of the 5-year
Line 6f. In the 2001 column, enter the
3. Support test. The foundation
carryover limitation under section
amount by which line 1 is more than the
normally receives 85% or more of its
4942(i)(2), the organization must reduce
total of lines 4d and 5. This is the
support (other than gross investment
any excess distributions carryover by any
undistributed income for 2001. The
income as defined in section 509(e)) from
amounts from 1996 that were not applied
organization must distribute the amount
the public and from five or more exempt
in 2001.
shown by the end of its 2002 tax year so
organizations that are not described in
Line 9 — Excess distributions
that it will not be liable for the tax on
section 4946(a)(1)(H) with respect to
carryover to 2002. Enter the amount by
undistributed income.
each other or the recipient foundation.
which line 6a is more than the total of
Line 7 — Distributions out of corpus for
Not more than 25% of the support (other
lines 7 and 8. This is the amount the
2001 pass-through distributions.
than gross investment income) normally
organization may apply to 2002 and
may be received from any one of the
1. If the foundation is the donee and
following years. Line 9 can never be less
exempt organizations and not more than
receives a contribution from another
than zero.
one-half of the support normally may be
private foundation, the donor foundation
Line 10 — Analysis of line 9. In the
received from gross investment income.
may treat the contribution as a qualifying
space provided for each year, enter the
distribution only if the donee foundation
See regulations under section 4942 for
amount of excess distributions carryover
makes a distribution equal to the full
the meaning of “directly for the active
from that year that has not been applied
amount of the contribution and the
conduct” of exempt activities for purposes
as of the end of the 2001 tax year. If there
distribution is a qualifying distribution that
of these tests.
is an amount on the line for 1997, it must
is treated as a distribution of corpus. The
be applied by the end of the 2002 tax
donee foundation must, no later than the
Complying with these tests. A
year since the 5-year carryover period for
close of the first tax year after the tax year
foundation may meet the income test
1997 ends in 2002.
in which it receives the contributions,
and either the assets, endowment, or
distribute an amount equal in value to the
support test by satisfying the tests for
Part XIV—Private
contributions received in the prior tax year
any 3 years during a 4-year period
and have no remaining undistributed
consisting of the tax year in question and
Operating Foundations
income for the prior year. For example, if
the 3 immediately preceding tax years. It
All organizations that claim status as
private foundation X received $1,000 in
may also meet the tests based on the
private operating foundations under
tax year 2000 from foundation Y,
total of all related amounts of income or
section 4942(j)(3) or (5) for 2001 must
foundation X would have to distribute the
assets held, received, or distributed
complete Part XIV.
$1,000 as a qualifying distribution out of
during that 4-year period. A foundation
corpus by the end of 2001 and have no
Certain elderly care facilities (section
may not use one method for satisfying the
remaining undistributed income for 2000.
4942(j)(5)). For purposes of section 4942
income test and another for satisfying one
2. If a private foundation receives a
only, certain elderly care facilities may be
of the three alternative tests. Thus, if a
contribution from an individual or a
classified as private operating
foundation meets the income test on the
corporation and the individual is seeking
foundations. To be so classified, they
3-out-of-4-year basis for a particular tax
the 50% contribution base limit on
must be operated and maintained for the
year, it may not use the 4-year
deductions for the tax year (or the
principal purpose explained in section
aggregation method for meeting one of
-25-
Form 990-PF Instructions
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