Private Foundations

CHAPTER FIVESelf-Dealing

1. *§ 5.1 Private Inurement Doctrine
2. *§ 5.3 Definition of Self-Dealing
   1. (b) Statutory Exceptions
3. § 5.4 Sale, Exchange, Lease, or Furnishing of Property
   1. (d) Furnishing of Goods, Services, or Facilities
   2. (e) Co-Owned Property
   3. *(f) Co-Investments
4. § 5.6 Payment of Compensation
5. § 5.8 Uses of Income or Assets by Disqualified Persons
   1. (c) Payment of Charitable Pledges
   2. *(d) Incidental or Tenuous Benefits
   3. (g) Other Acts
6. *§ 5.10 Payments to Government Officials
7. *§ 5.11 Indirect Self-Dealing
8. § 5.12 Property Held by Fiduciary
9. *§ 5.15 Issues Once Self-Dealing Occurs

*§ 5.1 PRIVATE INUREMENT DOCTRINE

p. 173. Insert as third complete paragraph:

An extreme example of private inurement occurred in connection with formation of a “sweat equity housing cooperative association,” with the stated purpose of preserving and rehabilitating rural properties of historic value that simultaneously serve as family homes. Each board member was accorded a possessory interest in one of the entity's residential units and a possessory interest in common with other members of other real and personal property. Needless to say, these arrangements were ruled to constitute forms of private inurement.^16.1

p. 174, second paragraph. Insert as last sentence:

Because of the self-dealing rules, revocation of a private foundation's exempt status on the ground of private inurement is rare.^22.1

*§ 5.3 DEFINITION OF SELF-DEALING

p. 180, fourth paragraph, third line. Delete prohibited and insert