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 25
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32•
Locally traded, for which quotations can
copy of the independent appraisal for its
that applies to assets included on line 1.
be readily obtained from established
records. If a valuation is reasonable, the
For details, see section 514(c)(1).
brokerage firms.
foundation may use it for the tax year for
Line 4 — Cash deemed held for
which the valuation is made and for each
charitable activities. Foundations may
If securities are held in trust for, or on
of the 4 following tax years.
exclude from the assets used in the
behalf of, a foundation by a bank or other
minimum investment return computation
financial institution that values those
Any valuation of real estate by a
the reasonable cash balances necessary
securities periodically using a computer
certified independent appraisal may be
to cover current administrative expenses
pricing system, a foundation may use that
replaced during the 5-year period by a
and other normal and current
system to determine the value of the
subsequent 5-year certified independent
disbursements directly connected with the
securities. The system must be
appraisal or by an annual valuation as
charitable, educational, or other similar
acceptable to the IRS for federal estate
described above. The most recent
activities. The amount of cash that may
tax purposes.
valuation should be used to compute the
be excluded is generally 1
1
/
% of the fair
foundation’s minimum investment return.
2
The foundation may reduce the fair
market value of all assets (minus any
market value of securities only to the
If the valuation is made according to
acquisition indebtedness) as computed in
extent that it can establish that the
the above rules, the IRS will continue to
Part X, line 3. However, if under the facts
securities could only be liquidated in a
accept it during the 5-year period for
and circumstances an amount larger than
reasonable period of time at a price less
which it applies even if the actual fair
the deemed amount is necessary to pay
than the fair market value because of:
market value of the property changes
expenses and disbursements, then you
•
The size of the block of the securities,
during the period.
may enter the larger amount instead of
•
The fact that the securities held are
Valuation date. An asset required to
1
1
/
% of the fair market value on line 4. If
2
securities in a closely held corporation, or
be valued annually may be valued as of
you use a larger amount, attach an
•
The fact that the sale of the securities
any day in the private foundation’s tax
explanation.
would result in a forced or distress sale.
year, provided the foundation values the
Line 6 — Short tax periods. If the
Any reduction in value allowed under
asset as of that date in all tax years.
foundation’s tax period is less than 12
these provisions may not be more than
However, a valuation of real estate
months, determine the applicable
10% of the fair market value (determined
determined on a 5-year basis by a
percentage by dividing the number of
without regard to any reduction in value).
certified, independent appraisal may be
days in the short tax period by 365 (or
made as of any day in the first tax year of
Also, see Regulations sections
366 in a leap year). Multiply the result by
the foundation to which the valuation
53.4942(a)-2(c)(4)(i)(b), (c), and (iv)(a).
5%. Then multiply the modified
applies.
percentage by the amount on line 5 and
Line 1b — Average of monthly cash
Assets held for less than a tax year.
enter the result on line 6.
balances. Compute cash balances on a
To determine the value of an asset held
monthly basis by averaging the amount of
Part XI—Distributable
less than 1 tax year, divide the number of
cash on hand on the first and last days of
days the foundation held the asset by the
each month. Include all cash balances
Amount
number of days in the tax year. Multiply
and amounts that may be used for
If the organization is claiming status as a
the result by the fair market value of the
charitable purposes (see line 4 below) or
private operating foundation described in
asset.
set aside and taken as a qualifying
section 4942(j)(3) or (j)(5) or if it is a
distribution (see Part XII).
Line 1e — Reduction claimed for
foreign foundation that checked box D2
blockage or other factors. If the fair
Line 1c — Fair market value of all other
on page 1, check the box in the heading
market value of any securities, real estate
assets. The fair market value of assets
for Part XI. You do not need to complete
holdings, or other assets reported on lines
other than securities is determined
this part. See the Part XIV instructions for
1a and 1c reflects a blockage discount,
annually except as described below. The
more details on private operating
marketability discount, or other reduction
valuation may be made by private
foundations.
from full fair market value because of the
foundation employees or by any other
Section 4942(j)(5) foundations are
size of the asset holding or any other
person even if that person is a
classified as private operating foundations
factor, enter on line 1e the aggregate
disqualified person. If the IRS accepts the
for purposes of section 4942 only if they
amount of the discounts claimed. Attach
valuation, it is valid only for the tax year
meet the requirements of Regulations
an explanation that includes the following
for which it is made. A new valuation is
section 53.4942(b)-1(a)(2).
information for each asset or group of
required for the next tax year.
assets involved:
The distributable amount for 2007 is
5-year valuation. A written, certified,
the amount that the foundation must
1. A description of the asset or asset
and independent appraisal of the fair
distribute by the end of 2008 as qualifying
group (for example, 20,000 shares of
market value of any real estate, including
distributions to avoid the 30% tax on the
XYZ, Inc., common stock),
any improvements, may be determined
undistributed portion.
2. For securities, the percentage of
on a 5-year basis by a qualified person.
the total issued and outstanding securities
Line 4. Enter the total of recoveries of
The qualified person may not be a
of the same class that is represented by
amounts treated as qualifying
disqualified person (see General
the foundation’s holding,
distributions for any year under section
Instruction C) with respect to the private
3. The fair market value of the asset
4942(g). Include recoveries of part or all
foundation or an employee of the
or asset group before any claimed
(as applicable) of grants previously made;
foundation.
blockage discount or other reduction,
proceeds from the sale or other
Commonly accepted valuation
disposition of property whose cost was
4. The amount of the discount
methods must be used in making the
treated as a qualifying distribution when
claimed, and
appraisal. A valuation based on
the property was acquired; and any
5. A statement that explains why the
acceptable methods of valuing property
amount set aside under section 4942(g)
claimed discount is appropriate in valuing
for federal estate tax purposes will be
to the extent it is determined that this
the asset or group of assets for section
considered acceptable.
amount is not necessary for the purposes
4942 purposes.
of the set-aside.
The appraisal must include a closing
In the case of securities, there are
statement that, in the appraiser’s opinion,
Line 6 — Deduction from distributable
certain limitations on the size of the
the appraised assets were valued
amount. If the foundation was organized
reduction in value that can be claimed.
according to valuation principles regularly
before May 27, 1969, and its governing
See the instructions for Part X, line 1a.
employed in making appraisals of such
instrument or any other instrument
property, using all reasonable valuation
Line 2 — Acquisition indebtedness.
continues to require the accumulation of
methods. The foundation must keep a
Enter the total acquisition indebtedness
income after a judicial proceeding to
-25-
Form 990-PF Instructions
ADVERTISEMENT
0 votes
Related Articles
Related forms
Instructions For Form 990-pf - Return Of Private Foundation Or Section 4947(a)(1) Nonexempt Charitable Trust Treated As A Private Foundation - Return Of Private Foundation Or Section 4947(a)(1) Nonexempt Charitable Trust Treated As A Private Foundation -
Financial
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
Financial
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 - 2009
Financial
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 - 2008
Financial
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 - 2003
Financial
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 - 2004
Financial
Instructions For Form 990-pf - Return Of Private Foundation Or Section 4947(a)(1) Nonexempt Charitable Trust Treated As A Private Foundation - 2001
Financial
Instructions For Form 990-pf - Return Of Private Foundation Or Section 4947(a)(1) Nonexempt Charitable Trust Treated As A Private Foundation - 2017
Financial
Related Categories
Parent category: Financial