Private Foundations

CHAPTER THREETypes of Private Foundations

1. § 3.1 Private Operating Foundations
   1. (a) Direct Charitable Distributions
   2. (d) Income Test
2. *§ 3.1A Exempt Operating Foundations

§ 3.1 PRIVATE OPERATING FOUNDATIONS

(a) Direct Charitable Distributions

p. 119, second complete paragraph. Insert note at end:

8.1.

See discussion of direct charitable distributions on pp. 118–121.

(d) Income Test

p. 126. D bulleted paragraph, add at end of paragraph:

The “ordinary and necessary expense” concepts apply and are defined by IRC § 162(a).

p. 127. Qualifying distribution paragraph, insert after second sentence:

Additionally, the amount reported in Part IX-A for the four largest direct charitable activities during the tax year will not agree with the amounts shown on the front page.

*p. 138. Delete heading and substitute:

*§ 3.1A EXEMPT OPERATING FOUNDATIONS

*p. 138, last paragraph, last line. Insert footnote at end of line:

88.1

IRC § 4940(d)(2).

*p. 147, note 153. Insert following existing text:

In one instance, the IRS ruled that, because “no [charitable] deduction has ever been taken (allowed),” a charitable remainder unitrust was not subject to these split-interest trust rules, although the IRS added that, for future tax years, the burden will be on the trust to keep records to show, through the life of the unitrust, that none of the possible charitable deductions is “ever taken” (Priv. Ltr. Rul. 201713002).