Title Details

List of Exhibits xi

Book Citations xiii

Preface xv

Chapter One: Introduction to Private Finance 1

*§ 1.1 Private Foundations: Unique Organizations 1

*§ 1.3 History and Background 1

*§ 1.8 Private Foundation Sanctions 2

Chapter Two: Starting and Funding a Private Foundation 3

*§ 2.5 Acquiring Tax-Exempt Status 3

*§ 2.6 Special Requirements for Charitable Organizations 6

*§ 2.7 When to Report Back to the IRS 6

*Chapter Four: Disqualified Persons 7

Chapter Five: Self-Dealing 9

*§ 5.2 Private Benefit Doctrine 9

*§ 5.4 Sale, Exchange, Lease, or Furnishing of Property 9

*§ 5.5 Loans and Other Extensions of Credit 11

*§ 5.6 Payment of Compensation 11

§ 5.8 Uses of Income or Assets by Disqualified Persons 15

§ 5.11 Indirect Self-Dealing 16

*§ 5.12 Property Held by Fiduciaries 18

Chapter Six: Mandatory Distributions 19

*§ 6.3 Measuring Fair Market Value 19

§ 6.4 Distribution Amount 23

§ 6.5 Qualifying Distributions 23

*§ 6.7 Satisfying the Distribution Test 25

Chapter Seven: Excess Business Holdings 27

§ 7.1 General Rules 27

*§ 7.3 Functionally Related Businesses 27

Chapter Eight: Jeopardizing Investments 29

§ 8.3 Program-Related Investments 29

§ 8.3A Investment Frauds (New) 29

Chapter Nine: Taxable Expenditures 33

*§ 9.3 Grants to Individuals 33

*§ 9.4 Grants to Public Charities 36

§ 9.6 Expenditure Responsibility 40

*§ 9.10 Excise Tax for Taxable Expenditures 40

Chapter Ten: Tax on Investment Income 43

§ 10.3 Formula for Taxable Income 43

*§ 10.4 Reductions to Gross Investment Income 46

§ 10.5 Foreign Foundations 48

§ 10.7 Legislative Proposal (New) 48

Chapter Eleven: Unrelated Business Income 51

§ 11.3 Rules Specifically Applicable to Private Foundations 51

§ 11.4 Unrelated Debt-Financed Income 54

§ 11.5 Calculating and Reporting the Tax 54

Chapter Twelve: Tax Compliance and Administrative Issues 57

*§ 12.1 Successful Preparation of Form 990-PF 57

*§ 12.2 Reports Unique to Private Foundations 58

*§ 12.3 Compliance Issues 59

Chapter Thirteen: Termination of Foundation Status 79

§ 13.5 Mergers, Split-ups, and Transfers between Foundations 79

Chapter Fifteen: Private Foundations and Public Charities 83

§ 15.2 Evolution of Law of Private Foundations 83

*§ 15.4 Publicly Supported Organizations—Donative Entities 83

*§ 15.7 Supporting Organizations 88

*§ 15.8 Change of Public Charity Category 95

Chapter Seventeen: Corporate Foundations (New) 97

§ 17.1 Corporate Foundation Overview 97

§ 17.2 Reasons for Establishment of Corporate Foundation 98

§ 17.3 Private Inurement Doctrine 99

§ 17.4 Disqualified Persons Rules 99

§ 17.5 Self-Dealing Rules 100

§ 17.6 Other Private Foundations Rules 107

Chapter Eighteen: Nonprofit Governance and Private Foundations (New) 111

§ 18.1 State Law Overview 112

§ 18.2 Board of Directors Basics 115

§ 18.3 Principles of Fiduciary Responsibility 118

§ 18.4 Duties of Directors 120

§ 18.5 Board Composition and Federal Tax Law 121

§ 18.6 Sources of Nonprofit Governance Principles 122

§ 18.7 Relevant Nonprofit Governance Issues 150

§ 18.8 Nonprofit Governance Policies 173

*§ 18.9 Role of IRS in Nonprofit Governance 174

§ 18.10 Governance Principles and Private Foundations 181

*Appendix A: Sources of the Law 189

Cumulative Table of Cases 191

Cumulative Table of IRS Revenue Rulings and Revenue Procedures 195

Cumulative Table of IRS Private Determinations Cited in Text 199

Cumulative Table of IRS Private Determinations Discussed in Bruce R. Hopkins' Nonprofit Counsel 205

Cumulative Table of IRS Private Letter Rulings, Technical Advice Memoranda, and General Counsel Memoranda 209

Cumulative Index 225