Private Foundation Pitfalls: Self-Dealing, Taxable Expenditures, and More
Author: Clark Nuber, Sarah Huang, Celia Davis
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
In addition to complying with the basic rules of §501(c)(3), private foundations have an additional layer of regulatory compliance. Many of these rules were enacted over 50 years ago and have remained unchanged since then, despite the ever-evolving world we live in. Non-compliance with these private foundation rules can have steep monetary penalties for the foundation, and in some cases, the individuals involved in the transaction. Join us for an overview and discussion on common traps for private foundations and learn strategies to avoid them going forward.
Publication Date: September 2021
Designed For
CPAs, CFOs, auditors, bookkeepers, staff accountants, board members, and others working with not-for-profit entities.
Topics Covered
- History and Governance of Private Foundations
- Identifying the Disqualified Persons
- Self”Dealing: Rules, Exceptions, and Planning Opportunities
- Annual Private Foundation Payout Requirements
- Taxable Expenditure Traps
- Lobbying vs. Political vs. Advocacy
- Grantmaking to Individuals and Non”Public Charities
- Investment Restrictions for Private Foundations
- Form 4720 Filing Tips
Learning Objectives
- Identify all disqualified persons of the foundation and put measures in place to prevent self-dealing transactions
- Recognize when an investment or expenditure may trigger unfavorable tax consequences for a private foundation
- Describe what actions are involved for correction when a pitfall transaction occurs
- Recognize which form should be used to notify the IRS if a foundation makes significant changes
- Differentiate IRC Code Sections and how they relate to excess business holdings for private foundations
- Identify the first-tier tax percent on a disqualified person
- Recognize a type of nonqualifying distribution has certain exceptions
- Describe correct statements regarding grantmaking to individuals
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
