Preparing the Form 990-PF

On Demand Webinar

Webinar Details $219

  • Webinar Length: 60 Minutes
  • Guest Speaker:   Tracy Paglia
  • Topic:   Taxation and Accounting
  • Credit:   CPE 2.0, ATATX 1.5, IRS 2.0
All Access Membership
Private foundations have many complex rules and potential traps for those managers and preparers unaware of the rules.  This session provides an overview of the Form 990-PF and basic information regarding excise taxes, potential penalties and their implications for the completion of Form 990-PF. Learn the differences between non-operating (grant making foundations) and operating foundations and planning suggestions for maximizing donor deductions.  Receive an overview of the expenditure responsibility requirements for foreign grants and grants to domestic private foundations and the income distribution calculation.

Learning Objectives :

  • How to recognize transactions where excise tax rules are applicable to private foundations.
  • Identify differences between grant making and private operating foundations.
  • How to calculate net investment income for the Section 4940 excise tax.
  • Determine the average fair market value calculation for cash and securities.
  • Recognize additional reporting requirements for foreign grant expenses and grants to other U.S. private foundations.
Who should Attend :

  • Staff or seniors in public practice who are new to nonprofit issues and will be involved with nonprofit clients and preparing returns.
  • Managers, senior managers, directors or partners in public practice who are exposed to private foundation planning as part of their individual or business practice.
  • Controllers, Accounting or Finance Managers working in foundations who are responsible for completion of the annual filings or answering questions raised about the filings.
  1. Introduction
  2. What is a Private Foundation? 00:04:18
  3. Types of Private Foundations 00:08:42
  4. Types of Private Foundations Cont’d 00:09:03
  5. Types of Private Foundations Cont’d 00:10:19
  6. Types of Private Foundations Cont’d 00:13:23
  7. Deduction Rules 00:16:39
  8. §501(c)(3) General Requirements 00:19:28
  9. Excise Tax 00:21:22
  10. Form 990-PF 00:24:36
  11. Part VI-B, Q1 Taxes on Self-Dealing 00:36:00
  12. Part VI-B, Q2 Taxes on Failure to Distribute 00:40:10
  13. What is a Qualifying Distribution? 00:41:18
  14. Part VI-B, Q3 Taxes on Excess Business Holdings 00:43:31
  15. Part VI-B, Q4 Taxes on Jeopardizing Investments 00:46:15
  16. Part VI-B, Q5 Taxable Expenditures 00:46:57
  17. Part VI-B, Q5d Expenditure Responsibility 00:50:24
  18. Form 990-PF 00:50:43
  19. Handout 00:59:20
  20. Speaker Closing 00:59:35
  21. Presentation Closing 00:59:43
  • 501(c)(3) 00:04:32, 00:19:32
  • Adjusted Gross Income (AGI) 00:10:39, 00:13:37, 00:16:52, 00:18:57
  • AICPA 00:29:40
  • Asset 00:13:50, 00:18:51, 00:36:50, 00:52:00
  • Balance Sheet (BS) 00:28:56
  • Capital Gain 00:18:30, 00:26:26, 00:31:46
  • Capital Losses 00:26:26, 00:31:46
  • Conduit Private Foundation 00:08:57, 00:10:50, 00:16:43
  • Excise Tax 00:10:07, 00:15:56, 00:21:22, 00:33:06
  • Exempt 00:04:29, 00:10:07
  • Exempt Operating Foundation 00:08:55, 00:09:30
  • Expenditure 00:48:54
  • Expense 00:27:11, 00:47:04,, 00:49:58
  • Fair Market Value (FMV) 00:10:42, 00:13:35, 00:17:23, 00:31:13
  • Financial Statement 00:25:59
  • Form 5471 00:50:43
  • Form 8621 00:50:43
  • Form 8865 00:58:35
  • Form 926 00:58:15
  • Form 990-PF 00:01:21, 00:15:50, 00:21:38, 00:24:39, 00:27:54, 00:35:51, 00:40:44, 00:49:35
  • Form 990-T 00:58:05
  • Net Investment Income (NII) 00:15:56, 00:21:25, 00:28:09, 00:33:07
  • Net Operating Loss (NOL) 00:21:43
  • Nonoperating Private Foundation 00:08:47, 00:09:03, 00:11:08
  • Nonprofit Corporation 00:04:36
  • Private Operating Foundation 00:04:23, 00:06:39, 00:08:59, 00:13:24, 00:16:44, 00:19:41, 00:27:34, 00:38:25, 00:43:40
  • Program-Related Investments (PRI) 00:46:24
  • Revenue 00:27:10
  • Schedule B 00:01:53, 00:56:14
  • Shareholder 00:19:50
  • Tangible Personal Property 00:18:43
  • Tax Basis 00:10:41, 00:26:51, 00:31:13, 00:31:49
  • Unrelated Business Income (UBI) 00:33:32, 00:33:49, 00:58:24
  • Unrelated Business Taxable Income (UBTI) 00:33:13

501(c)(3): A 501(c)(3) organization is a corporation, trust, unincorporated association, or other type of organization that is exempt from federal income tax under section 501(c)(3) of Title 26 of the United States Code. It is the most common type of the 29 types of 501(c) nonprofit organizations in the United States. (

AICPA: The American Institute of Certified Public Accountants is the national professional organization of Certified Public Accountants in the United States, with more than 418,000 members in 143 countries in business and industry, public practice, government, education, student affiliates and international associates.

Adjusted Gross Income (AGI) : Adjusted gross income, also known as (AGI), is defined as total income minus deductions, or "adjustments" to income that you are eligible to take.

Asset: Property owned by a person or company, regarded as having value and available to meet debts, commitments or legacies.

Balance Sheet (BS): A financial report that summarizes a company's assets (what it owns), liabilities (what it owes) and owner or shareholder equity at a given time.

Capital Gain: Capital gain is an economic concept defined as the profit earned on the sale of an asset that has increased in value over the holding period. An asset may include tangible property, a car, a business, or intangible property such as shares.

Capital Losses: A capital loss occurs when there is a “sale or exchange” of a “capital asset” at a loss.

Conduit Private Foundation: A "conduit foundation" also referred to as a "pass-through foundation" or "distributing foundation" is any private nonoperating foundation that meets the distribution requirements specified in IRC 170(b)(1)(F)(ii) for a taxable year. Conduit foundations must make qualifying distributions (treated as distributions out of corpus) in an amount equal to 100 percent of contributions received in a taxable year no later than the 15th day of the third month following the close of the taxable year in question.

Excise Tax: An excise, or excise tax, is any duty on manufactured goods that is normally levied at the moment of manufacture for internal consumption rather than at sale

Exempt : Exempt employee is a term that refers to a category of employees set out in the Fair Labor Standards Act. They do not receive overtime pay, nor do they qualify for the minimum wage

Exempt Operating Foundation: In general, an exempt operating foundation is a private foundation that has been publicly supported for 10 years; whose governing body consists of individuals less than 25 percent of whom are disqualified individuals and is broadly representative of the general public; and has no officer who is a disqualified individual during the year.

Expenditure: An expenditure is money spent on something. Expenditure is often used when people are talking about budgets.

Expense: Offset (an item of expenditure) as an expense against taxable income.

Fair Market Value (FMV): The term fair market value is used throughout the Internal Revenue Code among other federal statutory laws in the USA including Bankruptcy, many state laws, and several regulatory bodies. In litigation in many jurisdictions in the United States, the fair market value is determined at a hearing.

Financial Statement: Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. ... A balance sheet or statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time.

Form 5471: Certain U.S. citizens and U.S. residents who are officers, directors, or shareholders in certain foreign corporations (including specified foreign corporations in IRC 965 are responsible for filing Form 5471, Information Return of U.S. Persons with respect to certain foreign corporations.

Form 8621: The 8621 form is technically called “Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund” and is used in situations in which a person has a PFIC (Passive Foreign Investment Company).

Form 8865: Form 8865 is filed for the foreign partnership by another Category 1 filer under the multiple Category 1 filers exception. To qualify for the constructive ownership filing exception, the indirect partner must file with its income tax return a statement entitled “Controlled Foreign Partnership Reporting.”

Form 926: Form 926 is filed by US citizens or green card holders who transfer property to a foreign corporation, as part of the IRS's efforts to track and tax such transfers appropriately. This form is used to report the transfer of property and to calculate any taxes owed as a result of the transfer.

Form 990-PF: The 990-PF is the information return U.S. private foundations file with the Internal Revenue Service. This public document provides fiscal data for the foundation, names of trustees and officers, application information, and a complete grants list.

Form 990-T: Exempt organizations use Form 990-T to report unrelated business income. An exempt organization that has $1,000 or more gross income from an unrelated business must file Form 990-T, Exempt Organization Business Income Tax Return. The obligation to file Form 990-T is in addition to the obligation to file the annual information return.

Net Investment Income (NII): In general, net investment income includes, but is not limited to: interest, dividends, capital gains, rental and royalty income, and non-qualified annuities. Net investment income generally does not include wages, unemployment compensation, Social Security Benefits, alimony, and most self-employment income.

Net Operating Loss (NOL): Generally, a net operating loss (NOL) is an excess of deductions (for expenses from the operation of a business) over income from the operation of a business. For individuals, an NOL may also be attributable to casualty losses.

Nonoperating Private Foundation: Non-operating foundations serve their charitable purpose primarily by making grants to charities. Although they can operate programs, that isn't their primary purpose.

Nonprofit Corporation: A nonprofit organization, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is an organization dedicated to furthering a particular social cause or advocating for a shared point of view.

Private Operating Foundation: A private operating foundation is any private foundation that spends at least 85 percent of its adjusted net income or its minimum investment return, whichever is less, directly for the active conduct of its exempt activities.

Program-Related investments (PRI): A program-related Investment (PRI) is a type of mission or social investment that foundations make in order to achieve their philanthropic goals.

Revenue: In accounting, revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Some companies receive revenue from interest, royalties, or other fees.

Schedule B: The IRS uses Schedule B to determine if you've deposited your federal employment tax liabilities on time. If you're a semiweekly schedule depositor and you don't properly complete and file your Schedule B with Form 941, the IRS may propose an “averaged” FTD penalty

Shareholder: A shareholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders may be referred to as members of a corporation.

Tangible Personal Property: Tangible Personal Property Tax is an ad valorem tax assessed against the furniture, fixtures and equipment located in businesses and rental property. Ad valorem is a Latin phrase meaning “according to worth”. This tax is in addition to your annual Real Estate or Property Tax.

Tax Basis: A tax basis income statement includes the revenues and expenses recorded for the period. The revenues minus the expense equal the company's taxable income. Revenues that appear on the tax basis income statement only include payments received from customers.

Unrelated Business Income (UBI): For most organizations, unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis of the organization's exemption

Unrelated Business Taxable Income (UBTI): The Internal Revenue Service (IRS) defines the income generated from unrelated business activities as income from a trade or business regularly carried on, that is not substantially related to the purpose that is the basis of the organization's exemption from tax.

Guest Speaker

  • Tracy Paglia

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