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1. First, apply distributions to

underdistribution for 2013 and $10,000 as

supporting organization in the 2013 tax

eliminate any underdistribution for

part of its 2014 distributions). Later in the

year (and would be classified as a private

reasonable cause in a prior tax year.

2014 tax year, Y makes additional

foundation unless it met the requirements

distributions totaling $200,000. Y’s

of another public charity status) unless it

2. Second, apply distributions to

distributable amount in the 2014 tax year

met the requirements of the reasonable

satisfy the distributable amount for the

is $190,000. In its 2014 Form 990, Y

cause exception or the judicial proceeding

current year.

claims reasonable cause for the 2013

exception discussed in the instructions for

3. Third, carry over to future years any

underdistribution due to a clerical error.

Lines 5 and 6, later. If the organization met

remaining excess distributions.

Under these circumstances, Y first applies

either of these exceptions, explain in detail

$80,000 of its 2014 distributions of

in Part VI how the organization met the

Apply the oldest distributions first.

$290,000 to the 2013 underdistribution of

requirements for the exception.

Carryovers of excess distributions from

$80,000 ($200,000 minus $120,000), then

prior years are always applied in full

Line 3. On line 3e enter the amount of

applies $190,000 of its remaining 2014

before current-year distributions (unlike

distributions in the prior tax year (2013

distributions of $210,000 ($290,000 minus

the rules for qualifying distributions by

only) in excess of the distributable amount

$80,000) to satisfy its 2014 distributable

private foundations), and older carryovers

for that year (as ordinarily determined) if

amount. Y’s remaining $20,000 of

are applied before newer carryovers.

the organization was a Type III

distributions in 2014 ($290,000, minus

Excess distributions of a given year

non-functionally integrated supporting

$80,000 allocated to 2013, and minus

cannot be carried over for more than five

organization in such year. The

$190,000 allocable to 2014) are excess

years.

organization may photocopy the Part V,

distributions that may be carried over to

Sections A–D, to use as a worksheet in

Example 1. X is a Type III

future years.

determining the ordinary distributable

non-functionally integrated supporting

Line 1. Report the distributable amount

amount and distributions in the prior year.

organization that for its tax year including

for 2014 from Section C, line 6.

This amount is also reported in line 3f and

December 28, 2012, and through its

is applied in the following priority:

following 2013 tax year meets the

Line 2. Under the transition rules, an

1. First to any prior-year

requirements of Regulations section

organization that was treated as a

underdistributions on line 3g,

1.509(a)-4(i)(3)(iii) as in effect prior to

non-functionally integrated Type III

December 28, 2012. Under transition

supporting organization for the first time in

2. Second (if any remaining amount)

rules, X is deemed to meet its distribution

its first tax year beginning after December

to the current-year distributable amount on

requirement for 2013, but its distributable

28, 2012 (the 2013 tax year) had a

line 3h, and

amount is calculated in the ordinary

distributable amount of zero during the

3. Third (if any remaining amount) on

manner to determine its excess

2013 tax year. Such non-functionally

line 3j for carryover to future years.

distributions. For 2013, X has a

integrated Type III supporting

distributable amount, as ordinarily

Excess distributions cannot be carried

organizations include both organizations

determined, of $80,000 and distributions

over for more than five tax years and thus

that came into existence during the 2013

of $100,000, and thus excess distributions

tax year and organizations that had

are forfeited if not used in the fifth year of

of $20,000. For 2014, X has a distributable

formerly been meeting the requirements of

carryover. Such amounts are set forth in

amount of $95,000 and distributions of

Regulations section 1.509(a)-4(i)(3)(ii) as

line 3i (not applicable to the 2014 return).

$85,000. Under these circumstances, X

in effect prior to December 28, 2012, but

Line 4. Apply the current-year

first applies its 2013 excess distributions

did not continue to meet those

distributions (from Section D, line 7) in the

carryover of $20,000 to the 2014

requirements in the 2013 tax year. In

same order of priority as described in the

distributable amount of $95,000. Next, X

addition, a Type III supporting organization

instructions for Line 3 to any prior-year

applies $75,000 of its 2014 distributions of

in existence on December 28, 2012, that

underdistributions (line 4a) and

$85,000 to the remaining 2014

met the requirements of Regulation

current-year distributable amount (line 4b)

distributable amount. X thus has excess

section 1.509(a)-4(i)(3)(iii) as in effect

remaining after applying carryovers on

distributions of $10,000 in 2014 (2014

prior to December 28, 2012, during the

line 3. Any remaining distributions are

distributions of $85,000 less $75,000

2013 tax year will be considered to have

reported on line 4c for carryover to future

applied to the 2014 distributable amount),

met the distribution requirement for that

years.

which it may carry over in the next five tax

tax year.

years until applied.

Lines 5 and 6. If the current-year

A Type III supporting organization in

distributable amount is greater than the

Example 2. Y is a Type III supporting

existence on December 28, 2012, that met

sum of the excess distributions carryover

organization that for its tax year including

the requirements of Regulations section

from the prior year plus the current-year

December 28, 2012, meets the

1.509(a)-4(i)(3)(iii) as in effect prior to

distributions, then the organization does

requirements of Regulations section

December 28, 2012, for its tax year

not meet the distribution requirement and

1.509(a)-4(i)(3)(iii) as in effect prior to

including December 28, 2012, but not the

cannot qualify as a Type III

such date, but does not meet such

following tax year (the 2013 tax year) was

non-functionally integrated supporting

requirements in its following 2013 tax year

required to meet the distribution

organization for the tax year, unless an

(because of underdistributions for which

requirement as ordinarily determined in its

exception applies. If the organization does

the prior regulation did not expressly

2013 tax year. Such organization must

not qualify as a supporting organization or

provide a reasonable cause exception)

determine and report on line 2 any

otherwise as a public charity for the tax

and, therefore, does not benefit from the

underdistributions for the 2013 tax year.

year, then it is a private foundation and

transition rule for its 2013 tax year. Y

The organization may photocopy the Part

must file Form 990-PF for the tax year and

calculated that its distributable amount

V, Sections A–D, to use as a worksheet in

subsequent years until private foundation

was $120,000 for 2013, and made

determining the ordinary distributable

status is terminated under section 507. If

distributions of that amount. Early in its

amount and distributions in the 2013 tax

either the reasonable cause or judicial

2014 tax year, Y discovers that its

year.

proceeding exception applies, then

distributable amount for 2013 actually was

If the organization had any

explain in detail in Part VI how the

$200,000 and within 180 days makes a

underdistributions, then it did not qualify

organization met the requirements for the

$90,000 distribution ($80,000 to cover the

as a Type III non-functionally integrated

exception.

Instructions for Schedule A (Form 990 or 990-EZ)

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Instructions For Schedule A (Form 990 Or 990-Ez) - Public Charity Status And Public Support - 2014 Page 17

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