Instructions For Form 990-Pf - Return Of Private Foundation Or Section 4947(A)(1) Nonexempt Charitable Trust Treated As A Private Foundation - Internal Revenue Service - 2010 Page 12
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32Schedule B (Form 990, 990-EZ, or
instructions for lines 3 – 27c, the special
kinds of income and expenses (such as
990-PF). If money, securities, or other
rule below and examples 1 and 2 below.
investment income and expenses) in
property valued at $5,000 or more was
column (c).
General rules. In general, adjusted net
•
received directly or indirectly from any
If a nonoperating private foundation
income is the amount of a private
one person during the year, complete
has income that it reports on lines 10 and/
foundation’s gross income that is more
Schedule B and attach it to the return. If
or 11, report any expenses relating to this
than the expenses of earning the income.
the foundation is not required to complete
income following the general rules and
The modifications and exclusions
Schedule B (no person contributed
the special rule above. See examples 1
explained below are applied to gross
$5,000 or more), be sure to check the box
and 2 above.
income and expenses in figuring adjusted
on line 2.
net income.
Column (d). Disbursements for
To determine whether a person has
For income and expenses, include on
Charitable Purposes
contributed $5,000 or more, total only
each line of column (c) only that portion of
Expenses entered in column (d) relate to
gifts of $1,000 or more from each person.
the amount from column (a) applicable to
activities that constitute the charitable
Separate and independent gifts need not
the adjusted net income computation.
purpose of the foundation.
be totaled if less than $1,000. If a
Income. For column (c), include
contribution is in the form of property,
For amounts entered in column (d):
income from charitable functions,
describe the property and include its fair
•
Use the cash receipts and
investment activities, short-term capital
market value.
disbursements method of accounting no
gains from investments, amounts set
The term “person” includes individuals,
matter what accounting method is used in
aside, and unrelated trade or business
fiduciaries, partnerships, corporations,
keeping the books of the foundation;
activities. Do not include gifts, grants or
•
associations, trusts, and exempt
Do not include any amount or part of an
contributions, or long-term capital gains or
organizations.
amount included in column (b) or (c);
losses.
•
Include on lines 13 – 25 all expenses,
Split-interest trusts. Distributions
Expenses. Deductible expenses
including necessary and reasonable
from split-interest trusts should be
include the part of a private foundation’s
administrative expenses, paid by the
entered on line 1, column (a). They are a
operating expenses paid or incurred to
foundation for religious, charitable,
part of the amount on line 1.
produce or collect gross income reported
scientific, literary, educational, or other
Substantiation requirements. An
on lines 3 – 11 of column (c). If only part of
public purposes, or for the prevention of
organization must keep records, as
the property produces income includible
cruelty to children or animals;
required by the regulations under section
in column (c), deductions such as
•
Include a distribution of property at the
170.
interest, taxes, and rent must be divided
fair market value on the date the
between the charitable and noncharitable
Generally, a donor making a charitable
distribution was made; and
uses of the property. If the deductions for
•
contribution of $250 or more will not be
Include only the part entered in column
property used for a charitable,
allowed a federal income tax deduction
(a) that is allocable to the charitable
educational, or other similar purpose are
unless the donor obtains a written
purposes of the foundation.
more than the income from the property,
acknowledgment from the donee
the excess will not be allowed as a
Example. An educational seminar
organization by the earlier of the date on
deduction but may be treated as a
produced $1,000 in income that was
which the donor files a tax return for the
qualifying distribution in Part I, column (d).
reportable in columns (a) and (c).
tax year in which the contribution was
See Examples 1 and 2 below.
Expenses attributable to this charitable
made or the due date, including
activity were $1,900. Only $1,000 of
Special rule. The expenses attributable
extensions, for filing that return. However,
expense should be reported in column (c)
see section 170(f)(8)(D) and Regulations
to each specific charitable activity, limited
and the remaining $900 in expense
section 1.170A-13(f) for exceptions to this
by the amount of income from the activity,
should be reported in column (d).
rule.
must be reported in column (c) on lines
13 – 26. If the expenses of any charitable
The written acknowledgment the
Qualifying distributions. Generally,
activity exceed the income generated by
foundation provides to the donor must
gifts and grants to organizations
that activity, only the excess of these
show:
described in section 501(c)(3) that have
expenses over the income should be
been determined to be publicly supported
1. The amount of cash contributed,
reported in column (d).
charities, for example, organizations that
2. A description of any property
Examples.
are not private foundations as defined in
contributed,
section 509(a), are qualifying distributions
1. A charitable activity generated
3. Whether the foundation provided
only if the granting foundation does not
$5,000 of income and $4,000 of
any goods or services to the donor, and
control the public charity.
expenses. Report all income and
4. A description and a good-faith
expenses in column (c) and none in
estimate of the value of any goods or
The total of the expenses and
column (d).
services the foundation gave in return for
disbursements on line 26 is also
TIP
2. A charitable activity generated
the contribution, unless:
entered on line 1a in Part XII to
$5,000 of income and $6,000 of
a. The goods and services have
figure qualifying distributions.
expenses. Report $5,000 of income and
insubstantial value, or
$5,000 of expenses in column (c) and the
b. A statement is included that these
Alternative to completing lines 13 – 25.
goods and services consist solely of
excess expenses of $1,000 in column (d).
If you want to provide an analysis of
intangible religious benefits.
disbursements that is more detailed than
Nonoperating private foundations.
column (d), you may attach a schedule
The following rules apply to nonoperating
Generally, if a charitable organization
instead of completing lines 13 – 25. The
private foundations.
solicits or receives a contribution of more
schedule must include all the specific
•
If a nonoperating private foundation
than $75 for which it gives the donor
items of lines 13 – 25, and the total from
has no income from charitable activities
something in return (a quid pro quo
the schedule must be entered on line 26,
that would be reportable on line 10 or line
contribution), the organization must
column (d).
11 of Part I, it does not have to make any
inform the donor, by written statement,
entries in column (c).
that the amount of the contribution
Line Instructions
•
If a nonoperating private foundation
deductible for federal income tax
has income from charitable activities, it
Line 1. Contributions, gifts, grants,
purposes is limited to the amount by
must report that income only on lines 10
etc., received. Enter the total of gross
which the contribution exceeds the value
and/or 11 in column (c). These
contributions, gifts, grants, and similar
of the goods or services received by the
foundations do not need to report other
amounts received.
donor. The written statement must also
-12-
Form 990-PF Instructions
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