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 - 2007 Page 12
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32Alternative to completing lines 13 – 25.
Column (c) — Adjusted Net Income
$5,000 of expenses in column (c) and the
If you want to provide an analysis of
excess expenses of $1,000 in column (d).
disbursements that is more detailed than
Nonoperating private foundations
Nonoperating private foundations.
column (d), you may attach a schedule
TIP
should see item 1 under
The following rules apply to nonoperating
instead of completing lines 13 – 25. The
Nonoperating private foundations,
private foundations.
schedule must include all the specific
later, to find out if they need to complete
•
If a nonoperating private foundation
items of lines 13 – 25, and the total from
column (c).
has no income from charitable activities
the schedule must be entered in column
Private operating foundations. All
that would be reportable on line 10 or line
(d), line 26.
organizations that claim status as private
11 of Part I, it does not have to make any
operating foundations under section
Line Instructions
entries in column (c).
4942(j)(3) or (5) must complete all lines of
•
If a nonoperating private foundation
Line 1 — Contributions, gifts, grants,
column (c) that apply, according to the
has income from charitable activities, it
etc., received. Enter the total of gross
general rules for income and expenses
must report that income only on lines 10
contributions, gifts, grants, and similar
that apply to this column, the specific line
and/or 11 in column (c). These
amounts received.
instructions for lines 3 – 27c, the Special
foundations do not need to report other
rule, and Examples 1 and 2 below.
Schedule B (Form 990, 990-EZ, or
kinds of income and expenses (such as
990-PF). If money, securities, or other
General rules. In general, adjusted net
investment income and expenses) in
property valued at $5,000 or more was
income is the amount of a private
column (c).
•
received directly or indirectly from any
foundation’s gross income that is more
If a nonoperating private foundation
one person during the year, complete
than the expenses of earning the income.
has income that it reports on lines 10 and/
Schedule B and attach it to the return. If
The modifications and exclusions
or 11, report any expenses relating to this
the foundation is not required to complete
explained below are applied to gross
income following the general rules and
Schedule B (no person contributed
income and expenses in figuring adjusted
the special rule. See Examples 1 and 2
$5,000 or more), be sure to check the box
net income.
above.
on line 2.
For income and expenses, include on
Column (d) —Disbursements for
each line of column (c) only that portion of
To determine whether a person has
Charitable Purposes
the amount from column (a) that is
contributed $5,000 or more, total only
Expenses entered in column (d) relate to
applicable to the adjusted net income
gifts of $1,000 or more from each person.
activities that constitute the charitable
computation.
Separate and independent gifts need not
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
matter what accounting method is used in
aside, and unrelated trade or business
The term “person” includes individuals,
keeping the books of the foundation;
activities. Do not include gifts, grants, or
fiduciaries, partnerships, corporations,
•
Do not include any amount or part of an
contributions, or long-term capital gains or
associations, trusts, and exempt
amount that is included in column (b) or
losses.
organizations.
(c);
Expenses. Deductible expenses
•
Split-interest trusts. Distributions
Include on lines 13 – 25 all expenses,
include the part of a private foundation’s
from split-interest trusts should be
including necessary and reasonable
operating expenses that is paid or
entered on line 1 of column (a). They are
administrative expenses, paid by the
incurred to produce or collect gross
a part of the amount on line 1.
foundation for religious, charitable,
income reported on lines 3 – 11 of column
Substantiation requirements. An
scientific, literary, educational, or other
(c). If only part of the property produces
organization must keep records, required
public purposes, or for the prevention of
income includible in column (c),
by the regulations under section 170, for
cruelty to children or animals;
deductions such as interest, taxes, and
•
all its charitable contributions.
Include a distribution of property at the
rent must be divided between the
fair market value on the date the
Generally, a donor making a charitable
charitable and noncharitable uses of the
distribution was made; and
contribution of $250 or more will not be
property. If the deductions for property
•
Include only the part entered in column
allowed a federal income tax deduction
used for a charitable, educational, or
(a) that is allocable to the charitable
unless the donor obtains a written
other similar purpose are more than the
purposes of the foundation.
acknowledgment from the donee
income from the property, the excess will
Example. An educational seminar
organization by the earlier of the date on
not be allowed as a deduction but may be
produced $1,000 in income that was
which the donor files a tax return for the
treated as a qualifying distribution in Part
reportable in columns (a) and (c).
tax year in which the contribution was
I, column (d). See Examples 1 and 2
Expenses attributable to this charitable
made or the due date, including
below.
activity were $1,900. Only $1,000 of
extensions, for filing that return. However,
Special rule. The expenses attributable
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
Qualifying distributions. Generally,
13 – 26. If the expenses of any charitable
The written acknowledgment the
gifts and grants to organizations
activity exceed the income generated by
foundation provides to the donor must
described in section 501(c)(3), that have
that activity, only the excess of these
show:
been determined to be publicly supported
expenses over the income should be
1. The amount of cash contributed,
charities (for example, organizations that
reported in column (d).
2. A description of any property
are not private foundations as defined in
Examples.
contributed,
section 509(a)), are qualifying
3. Whether the foundation provided
1. A charitable activity generated
distributions only if the granting
any goods or services to the donor, and
$5,000 of income and $4,000 of
foundation does not control the public
4. A description and a good-faith
expenses. Report all of the income and
charity.
estimate of the value of any goods or
expenses in column (c) and none in
services the foundation gave in return for
column (d).
The total of the expenses and
the contribution, unless:
TIP
2. A charitable activity generated
disbursements on line 26 is also
$5,000 of income and $6,000 of
entered on line 1a in Part XII to
a. The goods and services have
expenses. Report $5,000 of income and
figure qualifying distributions.
insubstantial value, or
-12-
Form 990-PF Instructions
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