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 - Page 11
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31This amount should be the same
discussed later. Tax-exempt interest on
D2—Foreign Organizations
TIP
as the figure reported in Part II,
governmental obligations and related
If the foreign organization meets the 85%
column (c), line 16.
expenses are excluded.
test of Regulations section 53.4948-1(b),
then:
Investment income. Include in column
•
Part I—Analysis of
(b) all or part of any amount from column
Check the box in D2 on page 1 of Form
(a) that applies to investment income.
990-PF,
Revenue and Expenses
•
However, do not include in column (b)
Check the box at the top of Part XI,
•
any interest, dividends, rents or royalties
Do not fill in Parts XI and XIII,
Column Instructions
(and related expenses) that were reported
•
Do not fill in Part X unless it is claiming
The total of amounts in columns (b), (c),
on Form 990-T.
status as a private operating foundation,
and (d) may not necessarily equal the
For example, investment income from
and
amounts in column (a).
•
debt-financed property unrelated to the
Attach the computation of the 85% test
The amounts entered in column (a)
organization’s charitable purpose and
to Form 990-PF.
and on line 5b must be analyzed in Part
certain rents (and related expenses)
XVI-A.
E—Section 507(b)(1)(A)
treated as unrelated trade or business
income should be reported on Form
Terminations
Column (a) —Revenue and
990-T. Income from debt-financed
Expenses per Books
A private foundation that has terminated
property that is not taxed under section
its status as such under section
Enter in column (a) all items of revenue
511 is taxed under section 4940. Thus, if
507(b)(1)(A), by distributing all its net
and expense shown in the books and
the debt/basis percentage of a
assets to one or more public charities
records that increased or decreased the
debt-financed property is 80%, only 80%
without keeping any right, title, or interest
net assets of the organization. However,
of the gross income (and expenses) for
in those assets, should check the box in E
do not include the value of services
that property is used to figure the section
on page 1 of Form 990-PF. See General
donated to the foundation, or items such
511 tax on Form 990-T. The remaining
Instructions Q and T.
as the free use of equipment or facilities,
20% of the gross income (and expenses)
in contributions received. Also, do not
of that property is used to figure the
F—60-Month Termination
include any expenses used to compute
section 4940 tax on net investment
Under Section 507(b)(1)(B)
capital gains and losses on lines 6, 7, and
income on Form 990-PF. (See Form
8 or expenses included in cost of goods
Check the box in F on page 1 of Form
990-T and its instructions for more
sold on line 10b.
990-PF if the organization is terminating
information.)
its private foundation status under the
Column (b) — Net Investment
Investment expenses. Include in
60-month provisions of section
Income
column (b) all ordinary and necessary
507(b)(1)(B) during the period covered by
expenses paid or incurred to produce or
All domestic private foundations
this return. To begin such a termination, a
collect investment income from: interest,
(including section 4947(a)(1) nonexempt
private foundation must have given
dividends, rents, amounts received from
charitable trusts) are required to pay an
advance notice to TE/GE at the Cincinnati
payments on securities loans (as defined
excise tax each tax year on net
address given on page 10 and provided
in section 512(a)(5)), royalties, income
investment income.
the information outlined in Regulations
from notional principal contracts, and
Exempt foreign foundations are
section 1.507-2(b)(3). See General
other substantially similar income from
subject to an excise tax on gross
Instruction U for information regarding
ordinary and routine investments
filing requirements during a section
investment income from U.S. sources.
excluded by section 512(b)(1); or for the
These foreign organizations should
507(b)(1)(B) termination.
management, conservation, or
complete lines 3, 4, 5, 11, 12, and 27b of
maintenance of property held for the
See General Instruction V for
column (b) and report only income
production of income that is taxable under
information regarding payment of the tax
derived from U.S. sources. No other
section 4940.
based on investment income (computed
income should be included. No expenses
in Part VI) during a section 507(b)(1)(B)
are allowed as deductions.
If any of the expenses listed in column
termination.
(a) are paid or incurred for both
Definitions
investment and charitable purposes, they
H—Type of Organization
Gross investment income. Gross
must be allocated on a reasonable basis
investment income is the total amount of
Check the box for “Section 501(c)(3)
between the investment activities and the
investment income that was received by a
exempt private foundation” if the
charitable activities so that only expenses
private foundation from all sources.
foundation has a ruling or determination
from investment activities appear in
However, it does not include any income
letter from the IRS in effect that
column (b). Examples of allocation
subject to the unrelated business income
recognizes its exemption from federal
methods are given in the instructions for
tax. It includes interest, dividends, rents,
income tax as an organization described
Part IX-A.
payments with respect to securities loans
in section 501(c)(3) or if the organization’s
Limitation. The deduction for
(as defined in section 512(a)(5)), royalties
exemption application is pending with the
expenses paid or incurred in any tax year
received from assets devoted to
IRS.
for producing gross investment income
charitable activities, income from notional
earned incident to a charitable function
Check the “Section 4947(a)(1)
principal contracts (as defined in
cannot be more than the amount of
nonexempt charitable trust” box if the
Regulations section 1.863-7), and other
income earned from the function that is
trust is a nonexempt charitable trust
substantially similar income from ordinary
includible as gross investment income for
treated as a private foundation. All others,
and routine investments excluded by
the year.
check the “Other taxable private
section 512(b)(1). Therefore, interest
foundation” box.
received on a student loan is includible in
For example, if rental income is
the gross investment income of a private
incidentally realized in 2005 from historic
I—Fair Market Value of All
foundation making the loan.
buildings held open to the public,
Assets
Net investment income. Net
deductions for amounts paid or incurred
In block I on page 1 of Form 990-PF,
investment income is the amount by
in 2005 for the production of this income
enter the fair market value of all assets
which the sum of gross investment
may not be more than the amount of
the foundation held at the end of the tax
income and the capital gain net income
rental income includible as gross
year.
exceeds the allowable deductions
investment income in column (b) for 2005.
-11-
Form 990-PF Instructions
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