Tax Planning and Compliance for Tax-Exempt Organizations, 6th Edition

CHAPTER 15Minimum Distribution Requirements: IRC §4942

• 15.1 Assets Used to Calculate Minimum Investment Return
  • (a) What Are Investment Assets?
  • (b) Future Interests or Expectancies
  • (c) Exempt Function Assets
  • (d) Dual-Use Property
  • (e) Assets Held for Future Use
  • (f) Acquisition Indebtedness
• 15.2 Measuring Fair Market Value
  • (a) Valuation Methods
  • (b) Date of Valuation
  • (c) Partial Year
  • (d) Readily Marketable Securities
  • (e) Cash and Other Assets
• 15.3 Distributable Amount
  • (a) Controversial Addition
  • (b) Distribution Deadline
• 15.4 Qualifying Distributions
  • (a) Direct Grants
  • (b) Controlled Grantees and Redistributions
  • (c) Community Foundation Grants
  • (d) Noncash and In-Kind Grants
  • (e) Distributions to Foreign Recipients
  • (f) Direct Charitable Expenditures
  • (g) Set-Asides
• 15.5 Private Operating Foundations
  • (a) Active Charitable Programs
  • (b) Grants to Other Organizations
  • (c) Individual Grant Programs
  • (d) Tests to Qualify as a Private Operating Foundation
  • (e) Adjusted Net Income
  • (f) Compliance Period
  • (g) Advantages and Disadvantages of Private Operating Foundations
  • (h) Conversion to or from Private Operating Foundation Status
• 15.6 Satisfying the Distribution Test
  • (a) Timing of Distributions
  • (b) Planning for Excess Distributions
  • (c) Cushion Against Decline in Income
  • (d) Calculating the Tax
  • (e) Abatement of Penalty

Before 1970, all Internal Revenue Code (IRC) §501(c)(3) exempt organizations were subject to a vague and unenforceable prohibition against accumulating income unreasonably. ...