Form Nd-1qec - Qualified Endowment Fund Tax Credit - 2011 Page 2
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2North Dakota Offi ce of State Tax Commissioner
2011 Schedule ND-1QEC instructions
General instructions
3. It is a charitable donee organization as
contributed to Qualifi ed Endowment Fund B
defi ned under I.R.C. § 170.
does not qualify for the credit because it is
less than $5,000. Only enter the information
No double benefi t. A charitable
An individual is allowed an income tax
for Qualifi ed Endowment Fund A on
contribution that is the basis for this credit
credit for making one or more charitable
Schedule ND-1QEC.
may not be used as the basis for any other
contributions totaling at least $5,000 to a
tax credit allowed for income tax purposes.
qualifi ed endowment fund.
Example 4—A taxpayer makes a charitable
contribution of $500 at the beginning of
If the entire credit cannot be used on the
Specifi c line instructions
each month to Qualifi ed Endowment Fund
2011 return, the unused portion may be
A for a total contribution of $6,000 for
carried over and used on subsequent tax
Line 1
the tax year. Because the total amount
years’ returns for up to three years.
contributed to Qualifi ed Endowment Fund
In columns (a) and (b), enter the name and
Adjustment to taxable income— North
A is at least $5,000, the tax credit is allowed
address of each qualifi ed endowment fund
Dakota taxable income must be increased
on the entire $6,000. Enter the information
to which you made one or more charitable
by the amount of the charitable contribution
for Qualifi ed Endowment Fund A on
contributions totaling at least $5,000 during
upon which the credit is computed to the
Schedule ND-1QEC.
the 2011 tax year. See below for examples
extent that the contribution results in a
of the application of the $5,000 minimum
Line 6
reduction to federal taxable income. This
contribution requirement. In column (c),
applies to any tax year in which federal
Enter on this line only that portion of the
enter the total amount contributed to each
taxable income is reduced because of the
total allowable credit on line 5 that is used
qualifi ed endowment fund entered in column
contribution made during the 2011 tax year.
to reduce the tax on the 2011 return. For
(a).
See the instructions to the 2011 Form ND-1,
example, if the allowable credit on line 5 is
Example 1—A taxpayer makes one or more
line 4a.
$1,000, but only $400 is needed to reduce
charitable contributions totaling $4,000 to
the tax to zero on the 2011 return, enter $400
Qualifi ed endowment fund. A qualifi ed
Qualifi ed Endowment Fund A. Because the
on line 6.
endowment fund means a permanent,
total amount contributed is less than $5,000,
irrevocable fund that meets all of the
Line 7
none of the contributions qualify for the
following:
credit. Do not enter any information for
Enter the portion of the total allowable
1. It is held by a qualifi ed nonprofi t
Qualifi ed Endowment Fund A on Schedule
credit on line 5 that is being carried over to
organization (as defi ned below).
ND-1QEC.
the 2012 tax year.
2. It is comprised of cash, securities,
Example 2—A taxpayer makes one or more
Line 11
mutual funds, or other investment
charitable contributions totaling $4,000
assets.
If the amount on line 2 includes a charitable
to Qualifi ed Endowment Fund A and one
contribution made to a qualifi ed endowment
3. It is established for a specifi c religious,
or more charitable contributions totaling
fund by means of a trustee-to-donee transfer
educational, or other charitable purpose.
$1,000 to Qualifi ed Endowment Fund B.
of monies from an individual retirement
None of the contributions qualify for the
4. It may expend only the income
account (IRA) under Internal Revenue
credit because the total amount contributed
generated by, or the increase in value of,
Code section 408(d), enter that amount on
the assets contributed to it.
to either fund is not at least $5,000. Do not
this line. A charitable contribution made in
enter any information for either of the funds
Qualifi ed nonprofi t organization. A
this manner reduces federal taxable income
on Schedule ND-1QEC.
qualifi ed nonprofi t organization means an
because the transferred monies, which
organization that meets all of the following:
Example 3—A taxpayer makes one or more
would be subject to federal income tax had
charitable contributions totaling $5,000 to
they not been contributed to charity, are
1. It is incorporated or established in North
Qualifi ed Endowment Fund A and one or
excluded from federal taxable income. To
Dakota and has a physical presence in
more charitable contributions totaling $1,000
the extent these monies are the basis for
North Dakota.
to Qualifi ed Endowment Fund B. Only the
the qualifi ed endowment fund tax credit,
2. It is tax-exempt under I.R.C. § 501(c).
$5,000 contributed to Qualifi ed Endowment
they must be added back into North Dakota
Fund A qualifi es for the credit. The $1,000
taxable income.
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