Preface.
About the Author.
Chapter 1 Private Foundations and Public Charities.
Private Foundation Defined.
Private Operating Foundations.
Exempt Operating Foundations.
Conduit Foundations.
Nonexempt Charitable Trusts.
Concept of Public Charity.
Institutions.
Donative Publicly Supported Organizations.
Service Provider Publicly Supported Organizations.
Comparative Analysis of Publicly Supported Charities.
Supporting Organizations.
Public Safety Testing Organizations.
Import of Public-Private Dichotomy.
Some Statistics.
Summary.
Chapter 2 Disqualified Persons.
Basic Concepts.
Foundation Managers.
Substantial Contributors.
20%-Plus Owners.
Members of Family.
Corporations.
Partnerships.
Trusts and Estates.
Private Foundations.
Government Officials.
Termination of Disqualified Person Status.
Private Benefit and Self-Dealing.
Summary.
Chapter 3 Tax Law Rules In General.
Form of Organization.
Organizational Test In General.
Organizational Test for Foundations.
Operational Test.
Primary Purpose Test.
Charitable Purposes and Activities.
Recognition of Tax Exemption.
Private Inurement Doctrine.
Intermediate Sanctions.
Legislative Activities.
Political Campaign Activities.
Prohibited Tax Shelter Transactions.
Personal Benefit Contracts.
Tax on Investment Income.
Termination of Foundation Status.
Summary.
Chapter 4 Mandatory Payout Rules.
Some History.
Payout Rules In General.
Determining Payout Percentage Amount.
Types of Assets Used in Calculation.
Future Interests or Expectancies.
Exempt Function Assets.
Dual-Use Property.
Assets Held for Future Use.
Acquisition Indebtedness.
Determining Fair Market Value.
Distributable Amount.
Qualifying Distributions.
Set-Asides In General.
Set-Aside Type I: Suitability Test.
Set-Aside Type II: Cash Distribution Test.
Distributions to Foreign Recipients.
Distributions to Certain Supporting Organizations.
Imposition of Excise Tax Penalties.
Correction.
Tax Abatement.
Third-Tier Tax Regime.
Summary.
Chapter 5 Prohibited Expenditures Rules.
Overview of Rules.
Legislative Activities.
Political Campaign Activities.
Grants to Individuals.
Grants to Public Charities.
Grants to Foreign Organizations.
Expenditure Responsibility.
Expenditures for Noncharitable Purposes.
Distributions to Certain Supporting Organizations.
Imposition of Excise Tax Penalties.
Correction.
Tax Abatement.
Third-Tier Tax Regime.
Summary.
Chapter 6 Self-Dealing Rules.
Basic Definition of Self-Dealing.
Sales or Exchanges of Property.
Leasing of Property.
Furnishing of Property.
Co-owned Property.
Loans and Other Extensions of Credit.
Payment of Compensation.
Advances and Expense Reimbursements.
Bank Fees.
Indemnification and Insurance.
Uses of Income or Assets.
Sharing Space, People, Expenses.
Office Space, Equipment, and Personnel.
Payments to Government Officials.
Indirect Self-Dealing.
Property Held by Fiduciaries.
Early Termination of Charitable Remainder Trusts.
Exceptions to Rules.
Imposition of Excise Tax Penalties.
Correction.
Tax Abatement.
Third-Tier Tax Regime.
Summary.
Chapter 7 Investment Rules.
Purpose of Rules.
General Rules.
Defining Jeopardy.
Donated Assets.
Prudent Investment Standards.
Program-Related Investments.
Imposition of Excise Tax Penalties.
Correction.
Tax Abatement.
Third-Tier Tax Regime.
Summary.
Chapter 8 Business Holdings Rules.
General Rules.
Business Enterprises.
Passive Income Businesses.
Investment Partnerships.
Percentage Limitations.
Permitted and Excess Holdings.
Functionally Related Businesses.
Imposition of Excise Tax Penalties.
Correction.
Tax Abatement.
Third-Tier Tax Regime.
Unrelated Business Law Statutory Framework.
Affected Tax-Exempt Organizations.
Conduct of Business.
Regularly Carried On Businesses.
Related or Unrelated?
Unrelated Business Taxable Income.
Excepted Activities.
Excepted Income.
Exceptions to Exceptions.
Foundations and Unrelated Business Rules.
Summary.
Chapter 9 Charitable Giving.
Basic Concepts.
Defining Charitable Gift.
Qualified Donees.
Gifts of Property.
Limitations on Deductibility.
Deduction Reduction Rules.
Qualified Appreciated Stock.
Twice-Basis Deductions.
Partial-Interest Gifts.
Gifts of or Using Insurance.
Planned Giving.
Summary.
Chapter 10 Reporting and Disclosure Requirements.
Federal Tax Law Reporting Basics.
Form 990-PF.
Form 990-T.
Form 990.
Form 990-N.
State Law Requirements.
Federal Tax Law Disclosure Requirements.
Filing Requirements and Tax-Exempt Status.
Electronic Filing.
Summary.
Chapter 11 Alternatives to Private Foundations.
Factors to Consider.
Private Foundations.
Public Charities in General.
Supporting Organizations.
Creative Uses of Supporting Organizations.
IRS Shell Game.
Donor-Advised Funds In General.
Gifts Revisited.
Donor-Advised Funds’ Statutory Criteria.
More about Donor-Advised Funds.
Quick Comparative Analysis.
Summary.
Chapter 12 Governance Principles and Trustee Liability.
Basics of Governance Principles.
Emerging Concepts.
Nonprofit Governance Principles.
IRS Draft of Good Governance Principles.
Redesigned Annual Information Return.
Subsequent IRS Guidance.
Board Member Responsibilities.
Lawsuits Against Nonprofit Organizations.
Individuals as Defendants.
Protection Against Personal Liability.
Management Companies.
Watchdog Agencies.
Summary.
Index.
