Private Foundations: Tax Law and Compliance, 4th Edition

Chapter SixMandatory Distributions

1. § 6.1 Distribution Requirements—In General
2. § 6.2 Assets Used to Calculate Minimum Investment Return
   1. (a) What Are Investment Assets?
   2. (b) Future Interests or Expectancies
   3. (c) Exempt Function Assets
   4. (d) Dual-Use Property
   5. (e) Assets Held for Future Charitable Use
   6. (f) Acquisition Indebtedness
3. § 6.3 Measuring Fair Market Value
   1. (a) Valuation Methods
   2. (b) Date of Valuation
   3. (c) Partial Year
   4. (d) Readily Marketable Securities
   5. (e) Unique Assets
   6. (f) Cash and Other Types of Assets
   7. (g) Investment Frauds
4. § 6.4 Distributable Amount
   1. (a) Application of Distributions
   2. (b) Distribution Deadline
   3. (c) Inability to Distribute
5. § 6.5 Qualifying Distributions
   1. (a) Direct Grants
   2. (b) Concept of Control
   3. (c) Direct Charitable Expenditures
   4. (d) Use of Single-Member Limited Liability Companies
   5. (e) Set-Asides
   6. (f) Distributions to Foreign Recipients
6. § 6.6 Distributions to Certain Supporting Organizations
7. § 6.7 Satisfying the Distribution Test
   1. (a) Timing of Distributions
   2. (b) Planning for Excess Distributions
   3. (c) Calculating the Tax
   4. (d) Abatement of the Tax
   5. (e) Exception for Certain Accumulations
8. § 6.8 History of the Mandatory Distribution Requirement

§ 6.1 Distribution Requirements—In General

Prior to enactment of the Tax Reform Act of 1969, the tax law provided that a charitable organization, including a private foundation, would lose its tax-exempt status if its aggregate accumulated income was “unreasonable in amount or duration in order to carry out the charitable, ...