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 Page 24
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•
Part XII, line 1b, for the current year. Do
charitable functions even though the
The fact that the securities held are
not include any investments made in any
income from the assets is used for the
securities in a closely held corporation, or
•
prior year even if they were still held by
charitable functions. It is a factual
The fact that the sale of the securities
the foundation at the end of 2008.
question whether an asset is held for the
would result in a forced or distress sale.
production of income or for investment
Investments consisting of loans to
Any reduction in value allowed under
rather than used or held for use directly
individuals (such as educational loans)
these provisions may not be more than
by the foundation for charitable purposes.
are not required to be listed separately
10% of the fair market value (determined
but may be grouped with other
without regard to any reduction in value).
For example, an office building that is
program-related investments of the same
used to provide offices for employees
Also, see Regulations sections
type. Loans to other section 501(c)(3)
engaged in managing endowment funds
53.4942(a)-2(c)(4)(i)(b), (c), and (iv)(a).
organizations and all other types of
for the foundation is not considered an
Line 1b — Average of monthly cash
program-related investments must be
asset used for charitable purposes.
balances. Compute cash balances on a
listed separately on lines 1 through 3 or
Dual-use property. When property
monthly basis by averaging the amount of
on an attachment.
is used both for charitable and other
cash on hand on the first and last days of
Lines 1 and 2. List the two largest
purposes, the property is considered used
each month. Include all cash balances
program-related investments made by the
entirely for charitable purposes if 95% or
and amounts that may be used for
foundation in 2008, whether or not the
more of its total use is for that purpose. If
charitable purposes (see line 4 below) or
investments were still held by the
less than 95% of its total use is for
set aside and taken as a qualifying
foundation at the end of the year.
charitable purposes, a reasonable
distribution (see Part XII).
allocation must be made between
Line 3. Combine all other
Line 1c — Fair market value of all other
charitable and noncharitable use.
program-related investments and enter
assets. The fair market value of assets
the total on the line 3 Amount column. List
Excluded property. Certain assets
other than securities is determined
the individual investments or groups of
are excluded entirely from the
annually except as described below. The
investments included (attach a schedule if
computation of the minimum investment
valuation may be made by private
necessary).
return. These include pledges of grants
foundation employees or by any other
and contributions to be received in the
person even if that person is a
The total of lines 1 through 3 in
future and future interests in estates and
disqualified person. If the IRS accepts the
TIP
the Amount column must equal
trusts.
valuation, it is valid only for the tax year
the amount reported on line 1b of
for which it is made. A new valuation is
Line 1a — Average monthly fair market
Part XII.
required for the next tax year.
value of securities. If market quotations
Part X—Minimum
are readily available, a foundation may
5-year valuation. A written, certified,
use any reasonable method to determine
and independent appraisal of the fair
Investment Return
the average monthly fair market value of
market value of any real estate, including
securities such as common and preferred
any improvements, may be determined
Who must complete this section? All
stock, bonds, and mutual fund shares, as
on a 5-year basis by a qualified person.
domestic foundations must complete
long as that method is consistently used.
Part X.
The qualified person may not be a
For example, a value for a particular
disqualified person (see General
Foreign foundations that checked box
month might be determined by the closing
Instruction C) with respect to the private
D2 on page 1 do not have to complete
price on the first or last trading days of the
foundation or an employee of the
Part X unless claiming status as a private
month or an average of the closing prices
foundation.
operating foundation.
on the first and last trading days of the
Commonly accepted valuation
Private operating foundations,
month. Market quotations are considered
methods must be used in making the
described in sections 4942(j)(3) or
readily available if a security is any of the
appraisal. A valuation based on
4942(j)(5), must complete Part X in order
following:
•
acceptable methods of valuing property
to complete Part XIV.
Listed on the New York or American
for federal estate tax purposes will be
Stock Exchange or any city or regional
Overview. A private foundation that is
considered acceptable.
exchange in which quotations appear on
not a private operating foundation must
a daily basis, including foreign securities
The appraisal must include a closing
pay out, as qualifying distributions, its
listed on a recognized foreign national or
statement that, in the appraiser’s opinion,
minimum investment return. This is
regional exchange,
the appraised assets were valued
generally 5% of the total fair market value
•
Regularly traded in the national or
according to valuation principles regularly
of its noncharitable assets, subject to
regional over-the-counter market for
employed in making appraisals of such
further adjustments as explained in the
which published quotations are
property, using all reasonable valuation
instructions for Part XI. The amount of
available, or
methods. The foundation must keep a
this minimum investment return is figured
•
Locally traded, for which quotations can
copy of the independent appraisal for its
in Part X and is used in Part XI to figure
be readily obtained from established
records. If a valuation is reasonable, the
the amount that is required to be paid out
brokerage firms.
foundation may use it for the tax year for
(the distributable amount).
which the valuation is made and for each
If securities are held in trust for, or on
Minimum investment return. In figuring
of the 4 following tax years.
behalf of, a foundation by a bank or other
the minimum investment return, include
financial institution that values those
only those assets that are not actually
Any valuation of real estate by a
securities periodically using a computer
used or held for use by the organization
certified independent appraisal may be
pricing system, a foundation may use that
replaced during the 5-year period by a
for a charitable, educational, or other
system to determine the value of the
subsequent 5-year certified independent
similar function that contributed to the
securities. The system must be
appraisal or by an annual valuation as
charitable status of the foundation. Cash
acceptable to the IRS for federal estate
described above. The most recent
on hand and on deposit is considered
tax purposes.
valuation should be used to compute the
used or held for use for charitable
purposes only to the extent of the
foundation’s minimum investment return.
The foundation may reduce the fair
reasonable cash balances reported in
market value of securities only to the
If the valuation is made according to
Part X, line 4. See the instructions for
extent that it can establish that the
the above rules, the IRS will continue to
lines 1b and 4 below.
securities could only be liquidated in a
accept it during the 5-year period for
Assets that are held for the production
reasonable period of time at a price less
which it applies even if the actual fair
of income or for investment are not
than the fair market value because of:
market value of the property changes
•
considered to be used directly for
The size of the block of the securities,
during the period.
-24-
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 - 2007
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