internal revenue service instructions for form 990-pfthe internal revenue service is a proud partner...

2000 Department of the TreasuryInternal Revenue Service

Instructions for Form990-PFReturn of Private Foundation or Section 4947(a)(1)Nonexempt Charitable Trust Treated as a PrivateFoundationSection references are to the Internal Revenue Code unless otherwise noted.

Contents Page

Changes To Note● The Tax and Trade Relief Extension Actof 1998 changed the public inspectionrules. These new rules apply to any

Contents Page private foundation return with a due date(including extensions) after March 12,2000. The newspaper notice requirementis now eliminated. See GeneralInstruction Q for more information.● Line G on page 1 of the form has beenexpanded to include check boxes for aninitial return, final return, amended return,and name change in addition to addresschange.● Line 6b on page 1 of the form is new.It asks for the gross sales price for allassets on line 6a. This line assists infiguring gross receipts for theorganization.● New questions 6a and 6b in Part VII-Bask about an organization's actitivitiesinvolving personal benefit contracts. Seethe instructions for line 6b on page 20 formore information.● An automatic 3-month extension of timeto file Form 990-PF is now available. Toapply for an automatic extension orrequest additional time to file, use newForm 8868, Application for Extension ofTime To File an Exempt OrganizationReturn.

Photographs of MissingChildrenThe Internal Revenue Service is a proudpartner with the National Center forMissing and Exploited Children.Photographs of missing children selectedby the Center may appear in instructionson pages that would otherwise be blank.You can help bring these children homeby looking at the photographs and calling1-800-THE-LOST (1-800-843-5678) if yourecognize a child.

Phone HelpIf you have questions and/or need helpcompleting this form, please call1-877-829-5500. This toll-free telephoneservice is available Monday throughFriday from 8:00 a.m. to 9:30 p.m.Eastern time.

Part IV—Capital Gains and Losses forTax on Investment Income . . . . 17

General InstructionsA. Who Must File . . . . . . . . . . 2

Part V—Qualification Under Section4940(e) for Reduced Tax on NetInvestment Income . . . . . . . . 18

B. Which Parts To Complete . . . . 2C. Definitions . . . . . . . . . . . . 2D. Other Forms You May Need To File 3 Part VI—Excise Tax Based on

Investment Income . . . . . . . . 18E. Useful Publications . . . . . . . . 4Part VII-A—Statements Regarding

Activities . . . . . . . . . . . . . 19F. Use of Form 990-PF To Satisfy

State Reporting Requirements . . 4Part VII-B—Activities for Which Form

4720 May Be Required . . . . . . 20G. Furnishing Copies of Form 990-PF

to State Officials . . . . . . . . . 4Part VIII—Information About Officers,

Directors, Trustees, etc. . . . . . 20H. Accounting Period . . . . . . . . 5I. Accounting Methods . . . . . . . 5

Part IX-A—Summary of DirectCharitable Activities . . . . . . . . 21

J. When and Where To File . . . . 5K. Extension of Time To File . . . . 5

Part IX-B—Summary ofProgram-Related Investments . . 22L. Amended Return . . . . . . . . . 5

M. Penalty for Failure To File Timely, Completely, or Correctly . 5

Part X—Minimum Investment Return 22Part XI—Distributable Amount . . . 23

N. Penalties for Not Paying Tax on Time . . . . . . . . . . . . . 5 Part XII—Qualifying Distributions . . 24

Part XIII—Undistributed Income . . 24O. Figuring and Paying Estimated Tax 6Part XIV—Private Operating

Foundations . . . . . . . . . . . . 25P. Tax Payment Methods for Domestic

Private Foundations . . . . . . . 6Part XV—Supplementary Information 26Q. Public Inspection Requirements . 6Part XVI-A—Analysis of

Income-Producing Activities . . . . 26R. Disclosures Regarding Certain

Information and Services Furnished 9Part XVI-B—Relationship of Activities

to the Accomplishment of ExemptPurposes . . . . . . . . . . . . . 27

S. Organizations Organized or Created in a Foreign Country or U.S. Possession . . . . . . . . . 9

Part XVII—Information RegardingTransfers To and Transactions andRelationships With NoncharitableExempt Organizations . . . . . . 27

T. Liquidation, Dissolution, Termination,or Substantial Contraction . . . . 9

U. Filing Requirements During Section 507(b)(1)(B) Termination 9

Signature . . . . . . . . . . . . . . 28V. Special Rules for Section

507(b)(1)(B) Terminations . . . . 10 Paperwork Reduction Act Notice . . 28Exclusion Codes . . . . . . . . . . 29W. Rounding, Currency, and

Attachments . . . . . . . . . . . 10 Index . . . . . . . . . . . . . . . . 30

Specific InstructionsCompleting the Heading . . . . . . 10Part I—Analysis of Revenue and

Expenses . . . . . . . . . . . . . 10Part II—Balance Sheets . . . . . . 15Part III—Analysis of Changes in Net

Assets or Fund Balances . . . . . 17

Cat. No. 11290Y

How To Get Forms andPublications

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You can also reach us using filetransfer protocol at ftp.irs.gov.

CD-ROMOrder Pub. 1796, Federal Tax Productson CD-ROM, and get:● Current year forms, instructions, andpublications.● Prior year forms, instructions, andpublications.● Popular tax forms that may be filled inelectronically, printed out for submission,and saved for recordkeeping.● The Internal Revenue Bulletin.Buy the CD-ROM on the Internet atwww.irs.gov/cdorders from the NationalTechnical Information Service (NTIS) for$21 (no handling fee), or call1-877-CDFORMS (1-877-233-6767) tollfree to buy the CD-ROM for $21 (plus a$5 handling fee).

By Phone and In PersonYou can order forms and publications 24hours a day, 7 days a week, by calling1-800-TAX-FORM (1-800-829-3676). Youcan also get most forms and publicationsat your local IRS office.

General InstructionsPurpose of form. Form 990-PF is used:● To figure the tax based on investmentincome, and● To report charitable distributions andactivities.

Also, Form 990-PF serves as asubstitute for the section 4947(a)(1)nonexempt charitable trust's income taxreturn, Form 1041, U.S. Income TaxReturn for Estates and Trusts, when thetrust has no taxable income.

A. Who Must FileForm 990-PF is an annual informationreturn that must be filed by:● Exempt private foundations (section6033(a), (b), and (c)).● Taxable private foundations (section6033(d)).

● Organizations that agree to privatefoundation status and whose applicationsfor exempt status are pending on the duedate for filing Form 990-PF.● Organizations that made an electionunder section 41(e)(6).● Organizations that are making a section507 termination.● Section 4947(a)(1) nonexemptcharitable trusts that are treated asprivate foundations (section 6033(d)).Note: Include on the foundation's returnthe financial and other information of anydisregarded entity owned by thefoundation. See Regulations sections301.7701-1 through 3 for information onthe classification of certain businessorganizations including an eligible entitythat is disregarded as an entity separatefrom its owner (disregarded entity).Other section 4947(a)(1) nonexemptcharitable trusts. Section 4947(a)(1)nonexempt charitable trusts that are nottreated as private foundations do not fileForm 990-PF. However, they may needto file Form 990, Return of OrganizationExempt From Income Tax, or Form990-EZ, Short Form Return ofOrganization Exempt From Income Tax.With either of these forms, the trust mustalso file Schedule A (Form 990),Organization Exempt Under Section501(c)(3) (Except Private Foundation),and Section 501(e), 501(f), 501(k),501(n), or Section 4947(a)(1) NonexemptCharitable Trust SupplementaryInformation. (See Form 990 and Form990-EZ instructions.)

B. Which Parts To CompleteThe parts of the form listed below do notapply to all filers. See How to avoid filingan incomplete return on this page forinformation on what to do if a part or anitem does apply.● Part I, column (c), applies only toprivate operating foundations and tononoperating private foundations thathave income from charitable activities.● Part II, column (c), with the exceptionof line 16, applies only to organizationshaving at least $5,000 in assets per booksat some time during the year. Line 16,column (c), applies to all filers.● Part IV does not apply to foreignorganizations.● Parts V and VI do not apply toorganizations making an election undersection 41(e).● Part X does not apply to foreignfoundations that check box D2 on page 1of Form 990-PF unless they claim statusas a private operating foundation.● Parts XI and XIII do not apply to foreignfoundations that check box D2 on page 1of Form 990-PF. However, check the boxat the top of Part XI. Part XI does notapply to private operating foundations.Also, if the organization is a privateoperating foundation for any of the years

shown in Part XIII, do not complete theportions that apply to those years.● Part XIV applies only to privateoperating foundations.● Part XV applies only to organizationshaving assets of $5,000 or more duringthe year. This part does not apply tocertain foreign organizations.How to avoid filing an incompletereturn.● Complete all applicable line items,● Answer “Yes,” “No,” or “N/A” (notapplicable) to each question on the return,● Make an entry (including a zero whenappropriate) on all total lines, and● Enter “None” or “N/A” if an entire partdoes not apply.

Sequencing Chart To Complete theFormYou may find the following chart helpful.It limits jumping from one part of the formto another to compute an amount neededto complete an earlier part. If youcomplete the parts in the listed order, anyinformation you may need from anotherpart will already be entered.

C. Definitions● A private foundation is a domestic orforeign organization exempt from incometax under section 501(a); described insection 501(c)(3); and is other than anorganization described in sections509(a)(1) through (4).

In general, churches, hospitals,schools, and broadly publicly supportedorganizations are excluded from privatefoundation status by these sections.These organizations may be required tofile Form 990 (or Form 990-EZ) insteadof Form 990-PF.● A nonexempt charitable trust treatedas a private foundation is a trust that isnot exempt from tax under section 501(a)and all of the unexpired interests of whichare devoted to religious, charitable, orother purposes described in section170(c)(2)(B), and for which a deductionwas allowed under a section of the Codelisted in section 4947(a)(1).● A taxable private foundation is anorganization that is no longer exemptunder section 501(a) as an organizationdescribed in section 501(c)(3). Though itmay operate as a taxable entity, it willcontinue to be treated as a privatefoundation until that status is terminatedunder section 507.● A private operating foundation is anorganization that is described undersection 4942(j)(3) or (5). It means anyprivate foundation that spends at least

Step Part Step Part

1 .................... IV 8 .................. XII, lines 1–42 .................... I & II 9 .................. V & VI3 .................... Heading 10 .................. XII, lines 5–64 .................... III 11 .................. XI5 .................... VII-A 12 .................. XIII6 .................... VIII 13 .................. VII-B7 .................... IX-A – X 14 .................. XIV – XVII

Form 990-PF Instructions

85% of the smaller of its adjusted netincome (figured in Part I) or its minimuminvestment return (figured in Part X)directly for the active conduct of theexempt purpose or functions for which thefoundation is organized and operated andthat also meets the assets test, theendowment test, or the support test(discussed in Part XIV).● A nonoperating private foundation isa private foundation that is not a privateoperating foundation.● A foundation manager is an officer,director, or trustee of a foundation, or anindividual who has powers similar to thoseof officers, directors, or trustees. In thecase of any act or failure to act, the term“foundation manager” may also includeemployees of the foundation who havethe authority to act.● A disqualified person is:

1. A substantial contributor (seeinstructions for Part VII-A, line 10, onpage 19);

2. A foundation manager;3. A person who owns more than 20%

of a corporation, partnership, trust, orunincorporated enterprise that is itself asubstantial contributor;

4. A family member of an individualdescribed in 1, 2, or 3 above; or

5. A corporation, partnership, trust, orestate in which persons described in 1,2, 3, or 4 above own a total beneficialinterest of more than 35%.

6. For purposes of section 4941(self-dealing), a disqualified person alsoincludes certain government officials.(See section 4946(c) and the relatedregulations.)

7. For purposes of section 4943(excess business holdings), a disqualifiedperson also includes:

a. A private foundation that iseffectively controlled (directly or indirectly)by the same persons who control theprivate foundation in question, or

b. A private foundation to whichsubstantially all of the contributions weremade (directly or indirectly) by one ormore of the persons described in 1, 2, and3 above, or members of their families,within the meaning of section 4946(d).● An organization is controlled by afoundation or by one or more disqualifiedpersons with respect to the foundation ifany of these persons may, by combiningtheir votes or positions of authority,require the organization to make anexpenditure or prevent the organizationfrom making an expenditure, regardlessof the method of control. “Control” isdetermined regardless of how thefoundation requires the contribution to beused.

D. Other Forms You MayNeed To FileForm W-2, Wage and Tax Statement.Form W-3, Transmittal of Wage and TaxStatements.Form 941, Employer's Quarterly FederalTax Return. Used to report social security,Medicare, and income taxes withheld byan employer and social security andMedicare taxes paid by an employer.

If income, social security, and Medicaretaxes that must be withheld are notwithheld or are not paid to the IRS, aTrust Fund Recovery Penalty may apply.The penalty is 100% of such unpaidtaxes.

This penalty may be imposed on allpersons (including volunteers, see below)whom the IRS determines to beresponsible for collecting, accounting for,and paying over these taxes, and whowillfully did not do so.

This penalty does not apply to anyvolunteer, unpaid member of any boardof trustees or directors of a tax-exemptorganization, if this member:

1. Is solely serving in an honorarycapacity,

2. Does not participate in theday-to-day or financial activities of theorganization, and

3. Does not have actual knowledgeof the failure to collect, account for, andpay over these taxes.

However, this exception does not applyif it results in no person being liable for thepenalty.Form 990-T, Exempt OrganizationBusiness Income Tax Return. Everyorganization exempt from income taxunder section 501(a) that has total grossincome of $1,000 or more from all tradesor businesses that are unrelated to theorganization's exempt purpose must filea return on Form 990-T. The form is alsoused by tax-exempt organizations toreport other additional taxes including theadditional tax figured in Part IV of Form8621, Return by a Shareholder of aPassive Foreign Investment Company orQualified Electing Fund.Form 990-W, Estimated Tax on UnrelatedBusiness Taxable Income for Tax-ExemptOrganizations (and on Investment Incomefor Private Foundations).Form 1041, U.S. Income Tax Return forEstates and Trusts. Required of section4947(a)(1) nonexempt charitable truststhat also file Form 990-PF. However, if thetrust does not have any taxable incomeunder the income tax provisions (subtitleA of the Code), it may use the filing ofForm 990-PF to satisfy its Form 1041filing requirement under section 6012. Ifthis condition is met, check the box forquestion 13, Part VII-A, of Form 990-PFand do not file Form 1041.

Form 1041-ES, Estimated Income Tax forEstates and Trusts.Form 1096, Annual Summary andTransmittal of U.S. Information Returns.Forms 1099-INT, MISC, OID, and R,Information returns for reporting certaininterest; miscellaneous income (e.g.,payments to providers of health andmedical services, miscellaneous incomepayments, and nonemployeecompensation); original issue discount;and distributions from retirement orprofit-sharing plans, IRAs, SEPs orSIMPLEs, and insurance contracts.Form 1120, U.S. Corporation Income TaxReturn. Filed by nonexempt taxableprivate foundations that have taxableincome under the income tax provisions(subtitle A of the Code). The Form 990-PFannual information return is also filed bythese taxable foundations.Form 1120-POL, U.S. Income Tax Returnfor Certain Political Organizations.Section 501(c) organizations must fileForm 1120-POL if their politicalexpenditures and their net investmentincome both exceed $100 for the year.Form 1128, Application To Adopt,Change, or Retain a Tax Year.Form 2220, Underpayment of EstimatedTax by Corporations, is used bycorporations and trusts filing Form 990-PFto see if the foundation owes a penaltyand to figure the amount of the penalty.Generally, the foundation is not requiredto file this form because the IRS canfigure the amount of any penalty and billthe foundation for it. However, completeand attach Form 2220 even if thefoundation does not owe the penalty if:● The annualized income or the adjustedseasonal installment method is used, or● The foundation is a “largeorganization,” (see General Instruction O)computing its first required installmentbased on the prior year's tax.

If Form 2220 is attached, check the boxon line 8, Part VI, on page 4 of Form990-PF and enter the amount of anypenalty on this line.Form 4506-A, Request for PublicInspection or Copy of Exempt or PoliticalOrganization IRS Form.Form 4720, Return of Certain ExciseTaxes on Charities and Other PersonsUnder Chapters 41 and 42 of the InternalRevenue Code, is primarily used todetermine the excise taxes imposed on:acts of self-dealing between privatefoundations and disqualified persons;failure to distribute income; excessbusiness holdings; investments thatjeopardize the foundation's charitablepurposes; and making political or othernoncharitable expenditures. Certainexcise taxes and penalties also apply tofoundation managers, substantialcontributors, and certain related personsand are reported on this form.


Form 5500, Annual Return/Report ofEmployee Benefit Plan is used to reportinformation concerning employee benefitplans, Direct Filing Entities and fringebenefit plans.Form 8109, Federal Tax Deposit Coupon.Form 8282, Donee Information Return.Required of the donee of “charitablededuction property” that sells, exchanges,or otherwise disposes of the propertywithin 2 years after the date it receivedthe property.

Also required of any successor doneethat disposes of charitable deductionproperty within 2 years after the date thatthe donor gave the property to the originaldonee. (It does not matter who gave theproperty to the successor donee. It mayhave been the original donee or anothersuccessor donee.) For successor donees,the form must be filed only for anyproperty that was transferred by theoriginal donee after July 5, 1988.Form 8275, Disclosure Statement.Taxpayers and tax return preparersshould attach this form to Form 990-PF todisclose items or positions (except thosecontrary to a regulation—see Form8275-R below) that are not otherwiseadequately disclosed on the tax return.The disclosure is made to avoid parts ofthe accuracy-related penalty imposed fordisregard of rules or substantialunderstatement of tax. Form 8275 is alsoused for disclosures relating to preparerpenalties for understatements due tounrealistic positions or for willful orreckless conduct.Form 8275-R, Regulation DisclosureStatement. Use this form to disclose anyitem on a tax return for which a positionhas been taken that is contrary toTreasury regulations.Form 8300, Report of Cash PaymentsOver $10,000 Received in a Trade orBusiness. Used to report cash amounts inexcess of $10,000 that were received ina single transaction (or in two or morerelated transactions) in the course of atrade or business (as defined insection 162).Form 8718, User Fee for ExemptOrganization Determination LetterRequest. Used by a private foundationthat has completed a section 507termination and seeks a determinationletter that it is now a public charity.Form 8822, Change of Address.Form 8868, Application for Extension ofTime To File an Exempt OrganizationReturn.Form 8870, Information Return forTransfers Associated With CertainPersonal Benefit Contracts. Used toidentify those personal benefit contractsfor which funds were transferred to theorganization, directly or indirectly, as wellas the transferors and beneficiaries ofthose contracts.

E. Useful PublicationsThe following publications may be helpfulin preparing Form 990-PF:Publication 525, Taxable andNontaxable Income.Publication 578, Tax Information forPrivate Foundations and FoundationManagers.Publication 583, Starting a Business andKeeping Records.Publication 598, Tax on UnrelatedBusiness Income of ExemptOrganizations.Publication 910, Guide to Free TaxServices.Publication 1391, Deductibility ofPayments Made to Charities ConductingFund-Raising Events.

Publications and forms are available atno charge through IRS offices or bycalling 1-800-TAX-FORM(1-800-829-3676).

F. Use of Form 990-PF ToSatisfy State ReportingRequirementsSome states and local government unitswill accept a copy of Form 990-PF andrequired attachments instead of all or partof their own financial report forms.

If the organization plans to use Form990-PF to satisfy state or local filingrequirements, such as those from statecharitable solicitation acts, note thefollowing:Determine state filing requirements.Consult the appropriate officials of allstates and other jurisdictions in which theorganization does business to determinetheir specific filing requirements. “Doingbusiness” in a jurisdiction may include anyof the following:● Soliciting contributions or grants by mailor otherwise from individuals, businesses,or other charitable organizations,● Conducting programs,● Having employees within thatjurisdiction, or● Maintaining a checking account orowning or renting property there.Monetary tests may differ. Some or allof the dollar limitations that apply to Form990-PF when filed with the IRS may notapply when using Form 990-PF insteadof state or local report forms. IRS dollarlimitations that may not meet some staterequirements are the $5,000 total assetsminimum that requires completion of PartII, column (c), and Part XV; and the$50,000 minimum for listing the highestpaid employees and for listingprofessional fees in Part VIII.Additional information may berequired. State and local filingrequirements may require attaching toForm 990-PF one or more of thefollowing:

● Additional financial statements, suchas a complete analysis of functionalexpenses or a statement of changes innet assets,● Notes to financial statements,● Additional financial schedules,● A report on the financial statements byan independent accountant, and● Answers to additional questions andother information.

Each jurisdiction may require theadditional material to be presented onforms they provide. The additionalinformation does not have to be submittedwith the Form 990-PF filed with the IRS.

If required information is not providedto a state, the organization may be askedby the state to provide it or to submit anamended return, even if the Form 990-PFis accepted by the IRS as complete.Amended returns. If the organizationsubmits supplemental information or filesan amended Form 990-PF with the IRS,it must also include a copy of theinformation or amended return to anystate with which it filed a copy of Form990-PF.Method of accounting. Many statesrequire that all amounts be reportedbased on the accrual method ofaccounting.Time for filing may differ. The time forfiling Form 990-PF with the IRS may differfrom the time for filing state reports.

G. Furnishing Copies ofForm 990-PF to StateOfficialsThe foundation managers must furnish acopy of the annual return Form 990-PF(and Form 4720 (if applicable)) to theattorney general of:

1. Each state required to be listed inPart VII-A, line 8a,

2. The state in which the foundation'sprincipal office is located, and

3. The state in which the foundationwas incorporated or created.

A copy of the annual return must besent to the attorney general at the sametime the annual return is filed with theIRS.Other requirements. If the attorneygeneral or other appropriate state officialof any state requests a copy of the annualreturn, the foundation managers mustgive them a copy of the annual return.Exceptions. These rules do not apply toany foreign foundation which, from thedate of its creation, has received at least85% of its support (excluding grossinvestment income) from sources outsidethe United States. (See Exceptions inGeneral Instruction Q for other exceptionsthat affect this type of organization.)


Coordination with state reportingrequirements. If the foundationmanagers submit a copy of Form 990-PFand Form 4720 (if applicable) to a stateattorney general to satisfy a statereporting requirement, they do not haveto furnish a second copy to that attorneygeneral to comply with the InternalRevenue Code requirements discussed inthis section.

If there is a state reporting requirementto file a copy of Form 990-PF with a stateofficial other than the attorney general(such as the secretary of state), then thefoundation managers must also send acopy of the Form 990-PF and Form 4720(if applicable) to the attorney general ofthat state.

H. Accounting Period1. File the 2000 return for the calendar

year 2000 or fiscal year beginning in2000. If the return is for a fiscal year, fillin the tax year space at the top of thereturn.

2. The return must be filed on thebasis of the established annualaccounting period of the organization. Ifthe organization has no establishedaccounting period, the return should beon the calendar-year basis.

3. For initial or final returns or achange in accounting period, the 2000form may also be used as the return fora short period (less than 12 months)ending November 30, 2001, or earlier.

In general, to change its accountingperiod the organization must file Form990-PF by the due date for the shortperiod resulting from the change. At thetop of this short period return, write“Change of Accounting Period.”

If the organization changed itsaccounting period within the10-calendar-year period that includes thebeginning of the short period, and it hada Form 990-PF filing requirement at anytime during that 10-year period, it mustalso attach a Form 1128 to theshort-period return. See Rev. Proc. 85-58,1985-2 C.B. 740.

I. Accounting MethodsGenerally, you should report the financialinformation requested on the basis of theaccounting method the foundationregularly uses to keep its books andrecords.Exception. Complete Part I, column (d)on the cash receipts and disbursementsmethod of accounting.Change required by Statement ofFinancial Accounting Standards(SFAS) No. 116. Foundations that arechanging their methods of accounting forFederal income tax purposes to complywith SFAS 116 are not required to fileForm 3115, Application for Change in

Accounting Method. Foundations maychange to the methods described in SFAS116 for Federal income tax purposes forany tax year beginning after December15, 1994, by reflecting the change in themanner described in Notice 96-30, 1996-1C.B. 378.

J. When and Where To FileThis return must be filed by the 15th dayof the 5th month following the close of thefoundation's accounting period. If theregular due date falls on a Saturday,Sunday, or legal holiday, file by the nextbusiness day. If the return is filed late, seeGeneral Instruction M.

In case of a complete liquidation,dissolution, or termination, file the returnby the 15th day of the 5th month followingcomplete liquidation, dissolution, ortermination.

To file the return, mail or deliver it to:Internal Revenue Service CenterOgden, UT 84201–0027

K. Extension of Time To FileA foundation uses Form 8868 to requestan automatic or additional extension oftime to file its return.

An automatic 3-month extension will begranted if you properly complete this form,file it, and pay any balance due by the duedate for Form 990-PF.

If more time is needed, Form 8868 isalso used to request an additionalextension of up to 3 months. However,these extensions are not automaticallygranted. To obtain this additionalextension of time to file, you must showreasonable cause for the additional timerequested.

L. Amended ReturnTo change the organization's return forany year, file an amended return,including attachments, with the correctinformation. The amended return mustprovide all the information required by theform and instructions, not just the new orcorrected information. Check the“Amended Return” box in G at the top ofthe return.

If the organization files an amendedreturn to claim a refund of tax paid undersection 4940 or 4948, it must file theamended return within 3 years after thedate the original return was due or filed,or within 2 years from the date the taxwas paid, whichever date is later.State reporting requirements. SeeAmended returns under GeneralInstruction F.Need a copy of an old return or form?Use Form 4506-A to obtain a copy of apreviously filed return. You can obtainblank forms for prior years by calling1-800-TAX-FORM (1-800-829-3676).

M. Penalty for Failure To FileTimely, Completely, orCorrectlyTo avoid filing an incomplete return orhaving to respond to requests for missinginformation, see General Instruction B.Against the organization. If anorganization does not file timely andcompletely, or does not furnish the correctinformation, it must pay $20 for each daythe failure continues ($100 a day if it is alarge organization), unless it can showthat the failure was due to reasonablecause. Those filing late (after the duedate, including extensions) must attachan explanation to the return. Themaximum penalty for each return will notexceed the smaller of $10,000 ($50,000for a large organization) or 5% of thegross receipts of the organization for theyear.

Large organization. A largeorganization is one that has gross receiptsexceeding $1 million for the tax year.

Gross receipts. Gross receipts meansthe gross amount received during thefoundation's annual accounting periodfrom all sources without reduction for anycosts or expenses.

To figure the foundation's grossreceipts, start with Part I, line 12 column(a) then add to it lines 6b and 10b, thensubtract line 6a from that amount.Against the responsible person. TheIRS will make written demand that thedelinquent return be filed or theinformation furnished within a reasonabletime after the mailing of the notice of thedemand. The person failing to comply withthe demand on or before the datespecified will have to pay $10 for eachday the failure continues, unless there isreasonable cause. The maximum penaltyimposed on all persons for any one returnis $5,000. If more than one person isliable for any failures, all such persons arejointly and severally liable for such failures(see section 6652(c)).Other penalties. Because this returnalso satisfies the filing requirements of atax return under section 6011 for the taxon investment income imposed by section4940 (or 4948 if an exempt foreignorganization), the penalties imposed bysection 6651 for not filing a return (withoutreasonable cause) also apply.

There are also penalties for willfulfailure to file and for filing fraudulentreturns and statements. See sections7203, 7206, and 7207.

N. Penalties for Not PayingTax on TimeThere is a penalty for not paying tax whendue (section 6651). The penalty generallyis 1 / 2 of 1% of the unpaid tax for eachmonth or part of a month the tax remainsunpaid, not to exceed 25% of the unpaid


tax. If there was reasonable cause for notpaying the tax on time, the penalty canbe waived. However, interest is chargedon any tax not paid on time, at the rateprovided by section 6621.Estimated tax penalty. The section 6655penalty for failure to pay estimated taxapplies to the tax on net investmentincome of domestic private foundationsand section 4947(a)(1) nonexemptcharitable trusts. The penalty also appliesto any tax on unrelated business incomeof a private foundation. Generally, if aprivate foundation's tax liability is $500 ormore and it did not make the requiredpayments on time, then it is subject to thepenalty.

For more details, see the discussionof Form 2220 in General Instruction D.

O. Figuring and PayingEstimated TaxA domestic exempt private foundation, adomestic taxable private foundation, or anonexempt charitable trust treated as aprivate foundation must make estimatedtax payments for the excise tax based oninvestment income if it can expect itsestimated tax (section 4940 tax minusallowable credits) to be $500 or more. Thenumber of installment payments it mustmake under the depository method isdetermined at the time during the yearthat it first meets this requirement. Forcalendar-year taxpayers, the first depositof estimated taxes for a year generallyshould be made by May 15 of the year.

Although Form 990-W is used primarilyto compute the installment payments ofunrelated business income tax, it is alsoused to determine the timing and amountsof installment payments of the section4940 tax based on investment income.Compute separately any requireddeposits of excise tax based oninvestment income and unrelatedbusiness income tax.

To figure the estimated tax for theexcise tax based on investment income,apply the rules of Part VI to your tax year2001 estimated amounts for that part.Enter the tax you figured on line 9a ofForm 990-W.

The Form 990-W line items andinstructions for large organizations alsoapply to private foundations. For purposesof paying the estimated tax on netinvestment income, a “large organization”is one that had net investment income of$1 million or more for any of the 3 taxyears immediately preceding the tax yearinvolved.Penalty. A foundation that does not paythe proper estimated tax when due maybe subject to the estimated tax penalty forthe period of the underpayment. (Seesections 6655(b) and (d) and the Form2220 instructions.)

Special RulesSection 4947(a)(1) nonexemptcharitable trusts should use Form1041-ES for paying any estimated tax onincome subject to tax under section 1.Form 1041-ES also contains theestimated tax rules for paying the tax onthat income.Taxable private foundations should useForm 1120-W for figuring any estimatedtax on income subject to tax under section11. Form 1120-W contains the estimatedtax rules for paying the tax on thatincome.

P. Tax Payment Methods forDomestic PrivateFoundationsWhether the foundation uses thedepository method of tax payment or thespecial option for small foundations, itmust pay the tax due (see Part VI) in fullby the 15th day of the 5th month after theend of its tax year.

Depository Method of Tax PaymentSome foundations (described below) arerequired to electronically deposit alldepository taxes, including their taxpayments for the excise tax based oninvestment income.

Electronic Deposit Requirement

The foundation must make electronicdeposits of all depository taxes (such asemployment tax or the excise tax basedon investment income) using theElectronic Federal Tax Payment System(EFTPS) in 2001 if:● The total deposits of such taxes in 1999were more than $200,000 or● The foundation was required to useEFTPS in 2000.

If the foundation is required to useEFTPS and fails to do so, it may besubject to a 10% penalty. If the foundationis not required to use EFTPS, it mayparticipate voluntarily. To enroll in or getmore information about EFTPS, call1-800-555-4477 or 1-800-945-8400.Depositing on time. For deposits madeby EFTPS to be on time, the foundationmust initiate the transaction at least 1business day before the date the depositis due.

Deposits With Form 8109

If the foundation does not use EFTPS,deposit estimated tax payments and anybalance due for the excise tax based oninvestment income with Form 8109,Federal Tax Deposit Coupon. If you donot have a preprinted Form 8109, useForm 8109-B to make deposits. You canget this form only by calling1-800-829-1040. Be sure to have youremployer identification number (EIN)ready when you call.

Do not send deposits directly to an IRSoffice; otherwise, the foundation mayhave to pay a penalty. Mail or deliver thecompleted Form 8109 with the paymentto an authorized depositary, i.e., acommercial bank or other financialinstitution authorized to accept Federaltax deposits.

Make checks or money orders payableto the depositary. To help ensure propercrediting, write the foundation's EIN, thetax period to which the deposit applies,and “Form 990-PF” on the check ormoney order. Be sure to darken the990-PF box on the coupon. Records ofthese deposits will be sent to the IRS.

For more information on deposits, seethe instructions in the coupon booklet(Form 8109) and Pub. 583, Starting aBusiness and Keeping Records.

Special Payment Option for SmallFoundationsA private foundation may enclose a checkor money order, payable to the UnitedStates Treasury, with the Form 990-PFor Form 8868, if it meets all of thefollowing requirements.

1. The foundation must not berequired to use EFTPS.

2. The tax based on investmentincome shown on line 5, Part VI of Form990-PF is less than $500.

3. If Form 8868 is used, the amountentered on line 3a of Part I or 8a of PartII of Form 8868 must be less than $500and it must be the full balance due.

Be sure to write “2000 Form 990-PF”and the foundation's name, address, andEIN on its check or money order.

CAUTION!

Foreign organizations should seethe instructions for Part VI, line 9.

Q. Public InspectionRequirementsA private foundation must make its annualreturns and exemption applicationavailable for public inspection.

DefinitionsAnnual returns. An annual return is anexact copy of the Form 990-PF that wasfiled with the IRS including all schedules,attachments, and supporting documents.It also includes any amendments to theoriginal return (amended return).

By annual returns, we mean any annualreturn (defined above) that is not morethan 3 years old from the later of:

1. The date the return is required tobe filed (including extensions) or

2. The date that the return is actuallyfiled.Exemption application is an applicationfor tax exemption and includes (except asdescribed later):● Any prescribed application form (suchas Form 1023 or Form 1024),


● All documents and statements the IRSrequires an applicant to file with the form,● Any statement or other supportingdocument submitted in support of theapplication, and● Any letter or other document issued bythe IRS concerning the application.

An application for tax exemption doesnot include:● Any application for tax exemption filedbefore July 15, 1987, unless the privatefoundation filing the application had acopy of the application on July 15, 1987,or● Any material that is not available forpublic inspection under section 6104.

Who Must Make the AnnualReturns and ExemptionApplication Available for PublicInspection?The foundation's annual returns andexemption application must be madeavailable to the public by the privatefoundation itself and by the IRS.

How Does a Private FoundationMake Its Annual Returns andExemption Application Availablefor Public Inspection?A private foundation must make its annualreturns and exemption applicationavailable in 2 ways:

1. By office visitation and2. By providing copies or making them

widely available.

Public Inspection by Office Visitation

A private foundation must make its annualreturns and exemption applicationavailable for public inspection withoutcharge at its principal, regional, anddistrict offices during regular businesshours.Conditions that may be set for publicinspection at the office. A privatefoundation:● May have an employee present,● Must allow the individual conducting theinspection to take notes freely during theinspection, and● Must allow an individual to make photocopies of documents at no charge butonly if the individual brings photocopyingequipment to the place of inspection.Determining if a site is a regional ordistrict office. A regional or district officeis any office of a private foundation, otherthan its principal office, that has paidemployees whose total number of paidhours a week are normally 120 hours ormore. Include the hours worked bypart-time (as well as fulltime) employeesin making that determination.

What sites are not considered aregional or district office. A site is notconsidered a regional or district office if:

1. The only services provided at thesite further the foundations exempt

purposes (e.g., day care, health care, orscientific or medical research) and

2. The site does not serve as an officefor management staff, other thanmanagers who are involved only inmanaging the exempt function activitiesat the site.What if the private foundation does notmaintain a permanent office? If theprivate foundation does not maintain apermanent office, it will comply with thepublic inspection by office vistationrequirement by making the annual returnsand exemption application available at areasonable location of its choice. It mustpermit public inspection:● Within a reasonable amount of timeafter receiving a request for inspection(normally, not more than 2 weeks) and● At a reasonable time of day.

Optional method of complying. If aprivate foundation that does not have apermanent office wishes not to allow aninspection by office visitation, it may maila copy of the requested documentsinstead of allowing an inspection.However, it must mail the documentswithin 2 weeks of receiving the requestand may charge for copying and postageonly if the requester consents to thecharge.

Private foundations with apermanent office but limited or nohours. Even if a private foundation hasa permanent office but no office hours orvery limited hours during certain times ofthe year, it must still meet the officevisitation requirement. During thoseperiods when office hours are limited ornot available, follow the rules above underWhat if the private foundation does notmaintain a permanent office? to meetthis requirement.

Public Inspection—Providing Copies

A private foundation must provide copiesof its annual returns or exemptionapplication to any individual who makesa request for a copy in person or in writingunless it makes these documents widelyavailable.In-person requests for documentcopies. A private foundation mustprovide copies to any individual whomakes a request in person at the privatefoundation's principal, regional, or districtoffices during regular business hours onthe same day that the individual makesthe request.

Accepted delay in fulfilling anin-person request. If unusualcircumstances exist and fulfilling arequest on the same day places anunreasonable burden on the privatefoundation, it must provide copies by theearlier of:● The next business day following the daythat the unsusal circumstances end or● The fifth business day after the date ofthe request.

Examples of unusual circumstancesinclude:● Receipt of a volume of requests (fordocument copies) that exceeds theprivate foundations daily capacity to makecopies,● Requests received shortly before theend of regular business hours that requirean extensive amount of copying, or● Requests received on a day when theorganization's managerial staff capable offulfilling the request is conducting officialduties (e.g., student registration orattending an offsite meeting orconvention) instead of its regularadministrative duties.

Use of local agents for providingcopies. A private foundation may use alocal agent to handle in-person requestsfor document copies. If a privatefoundation uses a local agent, it mustimmediately provide the local agent'sname, address, and telephone number tothe requester.

The local agent must:● Be located within reasonable proximityto the principal, regional, or district officewhere the individual makes the requestand● Provide document copies within thesame time frames as the privatefoundation.Written requests for document copies.If a private foundation receives a writtenrequest for a copy of its annual returnsor exemption application (or parts of thesedocuments), it must give a copy to therequester. However, this rule only appliesif the request:● Is addressed to a private foundation'sprincipal, regional, or district office,● Is delivered to that address by mail,electronic mail (e-mail), facsimile (fax), ora private delivery service approved by theIRS (see Where To File in theInstructions for Form 990-T for a list), and● Gives the address to which thedocument copies should be sent.

How and when a written request isfulfilled.● Requested document copies must bemailed in 30 days from the date theprivate foundation receives the request.● Unless other evidence exists, a requestor payment that is mailed is considered tobe received by the private foundation 7days after the postmark date.● If an advance payment is required,copies must be provided in 30 days fromthe date payment is received.● If the private foundation requirespayment in advance and it receives arequest without payment or withinsufficient payment, it must notify therequester of the prepayment policy andthe amount due within 7 days from thedate it receives the request.● A request that is transmitted to theprivate foundation by e-mail or fax is


considered received the day the requestis transmitted successfully.● Requested documents can be e-mailedinstead of the traditional method ofmailing if the requester consents to thismethod.

A document copy is considered asprovided on the:● Postmark date,● Private delivery date,● Registration date for certified orregistered mail,● Postmark date on the sender's receiptfor certified or registered mail, or● Day the email is successfulytransmitted (if the requester agreed to thismethod).

Requests for parts of a documentcopy. A person can request all or anyspecific part or schedule of the annualreturns or exemption application and theprivate foundation must fulfill their requestfor a copy.

Can an agent be used to providecopies? A private foundation can use anagent to provide document copies for thewritten requests it receives. However, theagent must provide the document copiesunder the same conditions that areimposed on the private foundation itself.Also, if an agent fails to provide thedocuments as required, the privatefoundation will continue to be subject topenalties.

Example. The ABC Foundationretained an agent to provide copies for allwritten requests for documents. However,ABC Foundation received a request fordocument copies before the agent did.

The deadline for providing a responseis referenced by the date that the ABCFoundation received the request and notwhen the agent received it. If the agentreceived the request first, then a responsewould be referenced to the date that theagent received it.Can a fee be charged for providingcopies? A private foundation may chargea reasonable fee for providing copies.Also, it can require the fee to be paidbefore providing a copy of the requesteddocument.

What is a reasonable fee? A fee isreasonable only if it is no more than theper-page copying fee charged by the IRSfor providing copies, plus no more thanthe actual postage costs incurred toprovide the copies.

The current copying fee charged by theIRS is $1.00 for the first page of eachreturn and 15¢ for each additional page.

What forms of payment must theprivate foundation accept? The formof payment depends on whether therequest for copies is made in person or inwriting.

Cash and money order must beaccepted for in-person requests fordocument copies. The private foundation,

if it wishes, may accept additional formsof payment.

Certified check, money order, andeither personal check or credit card mustbe accepted for written requests fordocument copies. The private foundation,if it wishes, may accept additional formsof payment.

Other fee information. If a privatefoundation provides a requester withnotice of a fee and the requester does notpay the fee in 30 days, it may ignore therequest.

If a requester's check does not clear ondeposit, it may ignore the request.

If a private foundation does not requireprepayment and the requester does notprepay, the private foundation mustreceive consent from the requester if thecopying and postage charge exceeds$20.Private foundations subject to aharrassment campaign. If the IRSdetermines that a private foundation isbeing harrassed, it is not required tocomply with any request for copies that itreasonably believes is part of theharrassment campaign.

A group of requests for a privatefoundation's annual returns or exemptionapplication is indicative of a harrassmentcampaign if the requests are part of asingle coordinated effort to disrupt theoperations of the private foundation ratherthan to collect information about it.

See Regulations section 301.6104(d)-3for more information.Requests that may be disregardedwithout IRS approval. A privatefoundation may disregard any request forcopies of all or part of any documentbeyond the first two received within any30-day period or the first four receivedwithin any 1-year period from the sameindividual or the same address.

Making the Annual Returns andExemption Application WidelyAvailable

A private foundation does not have toprovide copies of its annual returns and/orits exemption application if it makes thesedocuments widely available. However, itmust still allow public inspection by officevisitation.How does a private foundation makeits annual returns and exemptionapplication widely available? A privatefoundation's annual returns and/orexemption application is widely availableif it meets all four of the followingrequirements:

1. The internet postingrequirement— This is met if:● The document is posted on a WorldWide Web page that the privatefoundation establishes and maintains or● The document is posted as part of adatabase of like documents of othertax-exempt organizations on a World

Wide Web page established andmaintained by another entity.

2. Additional posting informationrequirement— This is met if:● The World Wide Web page throughwhich the document is available clearlyinforms readers that the document isavailable and provides instructions fordownloading the document;● After it is downloaded and viewed, theweb document exactly reproduces theimage of the annual returns or exemptionapplication as it was originally filed withthe IRS, except for any informationpermitted by statute to be withheld frompublic disclosure; and● Any individual with access to theInternet can access, download, view, andprint the document without specialcomputer hardware or software requiredfor that format (except software that isreadily available to members of the publicwithout payment of any fee) and withoutpayment of a fee to the private foundationor to another entity maintaining the webpage.

3. Reliability and accuracyrequirements— To meet this, the entitymaintaining the World Wide Web pagemust:● Have procedures for ensuring thereliability and accuracy of the documentthat it posts on the page;● Take reasonable precautions to preventalteration, destruction, or accidental lossof the document when posted on its page;and● Correct or replace the document if aposted document is altered, destroyed,or lost.

4. Notice requirement— To meetthis, a private foundation must notify anyindividual requesting a copy of its annualreturns and/or exemption applicationwhere the documents are available(including the Internet address). If therequest is made in person, the privatefoundation must notify the individualimmediately. If the request is in writing, itmust notify the individual within 7 days ofreceiving the request.

Penalties

A penalty may be imposed on any personwho does not make the annual returns(including all required attachments toeach return) or the exemption applicationavailable for public inspection accordingto the section 6104(d) rules discussedabove. If more than one person fails tocomply, each person is jointly andseverally liable for the full amount of thepenalty. The penalty amount is $20 foreach day during which a failure occurs.The maximum penalty that may beimposed on all persons for any 1 annualreturn is $10,000. There is no maximumpenalty amount for failure to make theexemption application available for publicinspection.


Any person who willfully fails to complywith the section 6104(d) public inspectionrequirements is subject to an additionalpenalty of $5,000 (section 6685).

Requirements Placed on the IRSA private foundation's annual returns andapproved exemption application may beinspected by the public at an IRS office foryour area or at the IRS National Office inWashington, DC.

To request a copy or to inspect anannual return or an approved exemptionapplication, complete Form 4506-A. Thereis a charge for photocopying.

R. Disclosures RegardingCertain Information andServices FurnishedA section 501(c) organization that offersto sell or solicits money for specificinformation or a routine service to anyindividual that could be obtained by theindividual from a Federal Governmentagency free or for a nominal charge mustdisclose that fact conspicuously whenmaking such offer or solicitation.

Any organization that intentionallydisregards this requirement will be subjectto a penalty for each day the offers orsolicitations are made. The penalty is thegreater of $1,000 or 50% of the total costof the offers and solicitations made onthat day.

S. Organizations Organizedor Created in a ForeignCountry or U.S. PossessionIf you apply any provision of any U.S. taxtreaty to compute the foundation's taxableincome, tax liability, or tax credits in amanner different from the 990-PFinstructions, attach an explanation.

Regulations section 53.4948-1(b)states that sections 507, 508, andChapter 42 (other than section 4948) donot apply to a foreign private foundationthat from the date of its creation hasreceived at least 85% of its support (asdefined in section 509(d), other thansection 509(d)(4)) from sources outsidethe United States.

Section 4948(a) imposes a 4% tax onthe gross investment income from U.S.sources (i.e., income from dividends,interest, rents, payments received onsecurities loans (as defined in section512(a)(5)), and royalties not reported onForm 990-T of an exempt foreign privatefoundation. This tax replaces the section4940 tax on the net investment incomeof a domestic private foundation. To payany tax due, see the instructions for PartVI, line 9.

Taxable foreign private foundations andforeign section 4947(a)(1) nonexemptcharitable trusts are not subject to theexcise taxes under sections 4948(a) and

4940, but are subject to income tax undersubtitle A of the Code.

Certain foreign foundations are notrequired to send copies of annual returnsto state officials, or comply with the publicinspection and notice requirements ofannual returns. (See General InstructionsG and Q.)

T. Liquidation, Dissolution,Termination, or SubstantialContractionIf there is a liquidation, dissolution,termination, or substantial contraction(defined below) of the organization,attach:

1. A statement to the returnexplaining it,

2. A certified copy of the liquidationplan, resolution, etc. (if any) and allamendments or supplements that werenot previously filed,

3. A schedule that lists the names andaddresses of all recipients of assets, and

4. An explanation of the nature andfair market value of the assets distributedto each recipient.Additional requirements. For acomplete corporate liquidation or trusttermination, attach a statement as towhether a final distribution of assets wasmade and the date it was made (ifapplicable).

Also, if the organization:● Has ceased to exist, check the “FinalReturn” box in G at the top of page 1 ofthe return.● Is terminating its private foundationstatus under section 507(b)(1)(B), seeGeneral Instructions U and V.Relief from public inspectionrequirements. If the organization hasterminated its private foundation statusunder section 507(b)(1)(A), it does nothave to comply with the notice and publicinspection requirements of their return forthe termination year.Filing date. See General Instruction J forthe filing date.Definitions. The term substantialcontraction includes any partialliquidation or any other significantdisposition of assets. However, this doesnot include transfers for full and adequateconsideration or distributions of currentincome.

A significant disposition of assetsdoes not include any disposition for a taxyear if:

1. The total of the dispositions for thetax year is less than 25% of the fairmarket value of the net assets of theorganization at the beginning of the taxyear, and

2. The total of the related dispositionsmade during prior tax years (if adisposition is part of a series of relateddispositions made during these prior taxyears) is less than 25% of the fair market

value of the net assets of the organizationat the beginning of the tax year in whichany of the series of related dispositionswas made.

The facts and circumstances of theparticular case will determine whether asignificant disposition has occurredthrough a series of related dispositions.Ordinarily, a distribution described insection 170(b)(1)(E)(ii) (relating to privatefoundations making qualifyingdistributions out of corpus equal to 100%of contributions received during thefoundation's tax year) will not be takeninto account as a significant dispositionof assets. See Regulations section1.170A-9(g)(2).

U. Filing RequirementsDuring Section 507(b)(1)(B)TerminationAlthough an organization terminating itsprivate foundation status under section507(b)(1)(B) may be regarded as a publiccharity for certain purposes, it isconsidered a private foundation for filingrequirement purposes and it must file anannual return on Form 990-PF. The returnmust be filed for each year in the60-month termination period, if that periodhas not expired before the due date of thereturn.

Regulations under section 507(b)(1)(B)(iii) specify that within 90 days after theend of the termination period theorganization must supply information tothe IRS establishing that it has terminatedits private foundation status and,therefore, qualifies as a public charity.Send the information to:

Internal Revenue ServiceTE/GE DivisionCentralized Files UnitP.O. Box 2508Cincinnati, OH 45201

If information is furnished establishinga successful termination, then, for the finalyear of the termination period, theorganization should comply with the filingrequirements for the type of public charityit has become. See the Instructions forForm 990 and Schedule A (Form 990) fordetails on filing requirements. This applieseven if the key district has not confirmedthat the organization has terminated itsprivate foundation status by the time thereturn for the final year of the terminationis due (or would be due if a return wererequired).

The organization will be allowed areasonable period of time to file anyprivate foundation returns required (forthe last year of the termination period) butnot previously filed if it is later determinedthat the organization did not terminate itsprivate foundation status. Interest on anytax due will be charged from the originaldue date of the Form 990-PF, butpenalties under sections 6651 and 6652


will not be assessed if the Form 990-PFis filed within the period allowed by thekey district.

V. Special Rules for Section507(b)(1)(B) TerminationsIf the organization is terminating its privatefoundation status under the 60-monthprovisions of section 507(b)(1)(B), specialrules apply. (See General Instructions Tand U.) Under these rules, theorganization may file Form 990-PFwithout paying the tax based oninvestment income if it filed a consentunder section 6501(c)(4) with itsnotification to the TE/GE Division at theCincinnati address given on page 9 of itsintention to begin a section 507(b)(1)(B)termination. The consent provides that theperiod of limitation on the assessment ofexcise tax under section 4940 or 4948based on investment income for any taxyear in the 60-month period will not expireuntil at least 1 year after the period forassessing a deficiency for the last taxyear in which the 60-month period wouldnormally expire. Any foundation notpaying the tax when it files Form 990-PFmust attach a copy of the signed consent.

If the foundation did not file theconsent, the tax must be paid in thenormal manner as explained in GeneralInstructions O and P. The organizationmay file a claim for refund aftercompleting termination or during thetermination period. The claim for refundmust be filed on time and the organizationmust supply information establishing thatit qualified as a public charity for theperiod for which it paid the tax.

W. Rounding, Currency, andAttachmentsRounding off to whole-dollar amounts.You may show the money items on thereturn and accompanying schedules aswhole-dollar amounts. To do so, drop anyamount less than 50 cents and increaseany amount from 50 cents through 99cents to the next higher dollar.Currency and language requirements.Report all amounts in U.S. dollars (stateconversion rate used). Report all items intotal, including amounts from both U.S.and non-U.S. sources. All informationmust be in English.Attachments. Use the schedules onForm 990-PF. If you need more spaceuse attachments that are the same sizeas the printed forms.

On each attachment, write:● “Form 990-PF,”● The tax year,● The corresponding schedule numberor letter,● The organization's name and EIN, and● The information requested using theformat and line sequence of the printedform.

Also, show totals on the printed forms.

Specific Instructions

Completing the HeadingThe following instructions are keyed toitems in the Form 990-PF heading.

Name and AddressIf the organization received a Form990-PF package from the IRS with apeel-off label, please use it. If the nameor address on the label is wrong, makecorrections on the label. The addressused must be that of the principal officeof the foundation.

Include the suite, room, or other unitnumber after the street address. If thePost Office does not deliver mail to thestreet address and the organization hasa P.O. box, show the box number insteadof the street address.

A—Employer IdentificationNumberThe organization should have only oneemployer identification number. If it hasmore than one number, notify the InternalRevenue Service Center at theappropriate address shown underGeneral Instruction J. Explain whatnumbers the organization has, the nameand address to which each number wasassigned, and the address of theorganization's principal office. The IRSwill then advise which number to use.

B—Telephone NumberEnter a foundation telephone number(including the area code) that the publicand government regulators may use toobtain information about the foundation'sfinances and activities. This informationshould be available at this telephonenumber during normal business hours. Ifthe foundation does not have a telephone,enter a telephone number of a foundationofficial who can provide this informationduring normal business hours.

D2—Foreign OrganizationsIf the foreign organization meets the 85%test of Regulations section 53.4948-1(b),then:

1. Check the box in D2 on page 1 ofForm 990-PF,

2. Check the box at the top of Part XI,3. Do not fill in Parts XI and XIII,4. Do not fill in Part X unless it is

claiming status as a private operatingfoundation, and

5. Attach the computation of the 85%test to Form 990-PF.

E—Section 507(b)(1)(A)TerminationsA private foundation that has terminatedits status as such under section

507(b)(1)(A), by distributing all its netassets to one or more public charitieswithout keeping any right, title, or interestin those assets, should check the box inE on page 1 of Form 990-PF. SeeGeneral Instructions T and Q.

F—60-Month Termination UnderSection 507(b)(1)(B)Check the box in F on page 1 of Form990-PF if the organization is terminatingits private foundation status under the60-month provisions of section507(b)(1)(B) during the period covered bythis return. To begin such a termination,a private foundation must have givenadvance notice to the TE/GE Division atthe Cincinnati address given on page 9and provided the information outlined inRegulations section 1.507-2(b)(3). SeeGeneral Instruction U for informationregarding filing requirements during asection 507(b)(1)(B) termination.

See General Instruction V forinformation regarding payment of the taxbased on investment income (computedin Part VI) during a section 507(b)(1)(B)termination.

H—Type of OrganizationCheck the box for “Section 501(c)(3)exempt private foundation” if thefoundation has a ruling or determinationletter from the IRS in effect thatrecognizes its exemption from Federalincome tax as an organization describedin section 501(c)(3) or if the organization'sexemption application is pending with theIRS.

Check the “Section 4947(a)(1)nonexempt charitable trust” box if the trustis a nonexempt charitable trust treated asa private foundation. All others, check the“Other taxable private foundation” box.

I—Fair Market Value of All AssetsIn block I on page 1 of Form 990-PF,enter the fair market value of all assetsthe foundation held at the end of the taxyear.

TIPThis amount should be the sameas the figure reported in Part II,column (c), line 16.

Part I—Analysis of Revenueand Expenses

Column InstructionsThe total of amounts in columns (b), (c),and (d) may not necessarily equal theamounts in column (a).

The amounts entered in column (a) andon line 5b must be analyzed in PartXVI-A.

Column (a)—Revenue and Expensesper Books

Enter in column (a) all items of revenueand expense shown in the books andrecords that increased or decreased the


net assets of the organization. However,do not include the value of servicesdonated to the foundation, or items suchas the free use of equipment or facilities,in contributions received. Also, do notinclude any expenses used to computecapital gains and losses on lines 6, 7, and8 or expenses included in cost of goodssold on line 10b.

Column (b)—Net Investment Income

All domestic private foundations (includingsection 4947(a)(1) nonexempt charitabletrusts) are required to pay an excise taxeach tax year on net investment income.

Exempt foreign foundations are subjectto an excise tax on gross investmentincome from U.S. sources. These foreignorganizations should complete lines 3, 4,5, 11, 12, and 27b of column (b) andreport only income derived from U.S.sources. No other income should beincluded. No expenses are allowed asdeductions.Definitions

Gross investment income means thetotal amount of investment income thatwas received by a private foundation fromall sources. However, it does not includeany income subject to the unrelatedbusiness income tax. It includes interest,dividends, rents, payments with respectto securities loans (as defined in section512(a)(5)), royalties received from assetsdevoted to charitable activities, incomefrom notional principal contracts (asdefined in Regulations section 1.863-7),and other substantially similar incomefrom ordinary and routine investmentsexcluded by section 512(b)(1). Therefore,interest received on a student loan isincludible in the gross investment incomeof a private foundation making the loan.

Net investment income is the amountby which the sum of gross investmentincome and the capital gain net incomeexceeds the allowable deductionsdiscussed later. Tax-exempt interest ongovernmental obligations and relatedexpenses are excluded.Investment income. Include in column(b) all or part of any amount from column(a) that applies to investment income.However, do not include in column (b) anyinterest, dividends, rents or royalties (andrelated expenses) that were reported onForm 990-T.

For example, investment income fromdebt-financed property unrelated to theorganization's charitable purpose andcertain rents (and related expenses)treated as unrelated trade or businessincome should be reported on Form990-T. Income from debt-financedproperty that is not taxed under section511 is taxed under section 4940. Thus, ifthe debt/basis percentage of adebt-financed property is 80%, only 80%of the gross income (and expenses) forthat property is used to figure the section511 tax on Form 990-T. The remaining20% of the gross income (and expenses)

of that property is used to figure thesection 4940 tax on net investmentincome on Form 990-PF. (See Form990-T and its instructions for moreinformation.)Investment expenses. Include incolumn (b) all ordinary and necessaryexpenses paid or incurred to produce orcollect investment income from: interest,dividends, rents, amounts received frompayments on securities loans (as definedin section 512(a)(5)), royalties, incomefrom notional principal contracts, andother substantially similar income fromordinary and routine investmentsexcluded by section 512(b)(1); or for themanagement, conservation, ormaintenance of property held for theproduction of income that is taxable undersection 4940.

If any of the expenses listed in column(a) are paid or incurred for bothinvestment and charitable purposes, theymust be allocated on a reasonable basisbetween the investment activities and thecharitable activities so that only expensesfrom investment activities appear incolumn (b). Examples of allocationmethods are given in the instructions forPart IX-A.

Limitation. The deduction forexpenses paid or incurred in any tax yearfor producing gross investment incomeearned incident to a charitable functioncannot be more than the amount ofincome earned from the function that isincludible as gross investment income forthe year.

For example, if rental income isincidentally realized in 2000 from historicbuildings held open to the public,deductions for amounts paid or incurredin 2000 for the production of this incomemay not be more than the amount ofrental income includible as grossinvestment income in column (b) for 2000.

Expenses related to tax-exemptinterest. Do not include on lines 13–23of column (b) any expenses paid orincurred that are allocable to tax-exemptinterest that is excluded from lines 3and 4.

Column (c)—Adjusted Net Income

TIPNonoperating private foundationsshould see item 1 underNonoperating private

foundations on this page to find out ifthey need to complete column (c).Private operating foundations. Allorganizations that claim status as privateoperating foundations under section4942(j)(3) or (5) must complete all linesof column (c) that apply, according to thegeneral rules for income and expensesthat apply to this column, the specific lineinstructions for lines 3–27c, the Specialrule, and Examples 1 and 2 below.General rules. In general, adjusted netincome is the amount of a privatefoundation's gross income that is more

than the expenses of earning the income.The modifications and exclusionsexplained below are applied to grossincome and expenses in figuring adjustednet income.

For income and expenses, include oneach line of column (c) only that portionof the amount from column (a) that isapplicable to the adjusted net incomecomputation.

Income. For column (c), includeincome from charitable functions,investment activities, short-term capitalgains from investments, amounts setaside, and unrelated trade or businessactivities. Do not include gifts, grants, orcontributions, or long-term capital gainsor losses.

Expenses. Deductible expensesinclude the part of a private foundation'soperating expenses that is paid orincurred to produce or collect grossincome reported on lines 3–11 of column(c). If only part of the property producesincome includible in column (c),deductions such as interest, taxes, andrent must be divided between thecharitable and noncharitable uses of theproperty. If the deductions for propertyused for a charitable, educational, or othersimilar purpose are more than the incomefrom the property, the excess will not beallowed as a deduction but may betreated as a qualifying distribution in PartI, column (d). See Examples 1 and 2below.Special rule. The expenses attributableto each specific charitable activity, limitedby the amount of income from the activity,must be reported in column (c) on lines13–26. If the expenses of any charitableactivity exceed the income generated bythat activity, only the excess of theseexpenses over the income should bereported in column (d).

Examples.1. A charitable activity generated

$5,000 of income and $4,000 ofexpenses. Report all of the income andexpenses in column (c) and none incolumn (d).

2. A charitable activity generated$5,000 of income and $6,000 ofexpenses. Report $5,000 of income and$5,000 of expenses in column (c) and theexcess expenses of $1,000 in column (d).Nonoperating private foundations. Thefollowing rules apply to nonoperatingprivate foundations.

1. If a nonoperating private foundationhas no income from charitable activitiesthat would be reportable on line 10 or line11 of Part I, it does not have to make anyentries in column (c).

2. If a nonoperating private foundationhas income from charitable activities, itmust report that income only on lines 10and/or 11 in column (c). Thesefoundations do not need to report otherkinds of income and expenses (such as


investment income and expenses) incolumn (c).

3. If a nonoperating private foundationhas income that it reports on lines 10and/or 11, report any expenses relating tothis income following the general rulesand the special rule. See Examples 1 and2 on the prior page.

Column (d)—Disbursements forCharitable Purposes

Expenses entered in column (d) relate toactivities that constitute the charitablepurpose of the foundation.

For amounts entered in column (d):● Use the cash receipts anddisbursements method of accounting nomatter what accounting method is used inkeeping the books of the foundation.● Do not include any amount or part ofan amount that is included in column (b)or (c).● Include on lines 13–25 all expenses,including necessary and reasonableadministrative expenses, paid by thefoundation for religious, charitable,scientific, literary, educational, or otherpublic purposes, or for the prevention ofcruelty to children or animals.● Include a distribution of property at thefair market value on the date thedistribution was made.● Include only the part entered in column(a) that is allocable to the charitablepurposes of the foundation.

Example. An educational seminarproduced $1,000 in income that wasreportable in columns (a) and (c).Expenses attributable to this charitableactivity were $1,900. Only $1,000 ofexpense should be reported in column (c)and the remaining $900 in expenseshould be reported in column (d).Qualifying distributions. Generally, giftsand grants to organizations described insection 501(c)(3), that have beendetermined to be publicly supportedcharities (i.e., organizations that are notprivate foundations as defined in section509(a)), are qualifying distributions only ifthe granting foundation does not controlthe public charity.

TIPThe total of the expenses anddisbursements on line 26 is alsoentered on line 1a in Part XII to

figure qualifying distributions.Alternative to completing lines 13–25.If you want to provide an analysis ofdisbursements that is more detailed thancolumn (d), you may attach a scheduleinstead of completing lines 13–25. Theschedule must include all the specificitems of lines 13–25, and the total fromthe schedule must be entered in column(d), line 26.

Line InstructionsLine 1—Contributions, gifts, grants,etc., received. Enter the total of grosscontributions, gifts, grants, and similaramounts received. If money, securities,or other property valued at $5,000 ormore was received directly or indirectlyfrom any one person during the year,attach a schedule showing the name andaddress of the person and the amountand date of each gift made during theyear.

To determine whether a person hascontributed $5,000 or more, total only giftsof $1,000 or more from each person.Separate and independent gifts need notbe totaled if less than $1,000. If acontribution is in the form of property,describe the property and include its fairmarket value.

The term “person” includes individuals,fiduciaries, partnerships, corporations,associations, trusts, and exemptorganizations.

An organization must keep records,required by the regulations under section170, for all its charitable contributions.

Change in accounting method toconform with SFAS 116. If the privatefoundation changed its accountingmethod for tax purposes to conform withSFAS 116 and part or all of its net assetadjustment (section 481(a) adjustment)represents contributions, then include inthe list of contributors that is attached tothe return any contributor of an amountthat is included in the adjustment andmeets the requirements above. Reportthe contributors that meet theserequirements in the year of the change.

Split-interest trusts. Contributionsfrom split-interest trusts should be enteredon both line 1 of column (a) and line 2 ofcolumn (b). They are a part of the amounton line 1. Report contributions only onlines 1 and 2.

Substantiation requirements.Generally, a donor making a charitablecontribution of $250 or more will not beallowed a Federal income tax deductionunless the donor obtains a writtenacknowledgment from the doneeorganization by the earlier of the date onwhich the donor files a tax return for thetax year in which the contribution wasmade or the due date, includingextensions, for filing that return. However,see section 170(f)(8) and Regulationssection 1.170A-13 for exceptions to thisrule.

The written acknowledgment thefoundation provides to the donor mustshow:

1. The amount of cash contributed,2. A description of any property

contributed,3. Whether the foundation provided

any goods or services to the donor, and4. A description and a good-faith

estimate of the value of any goods or

services the foundation gave in return forthe contribution, unless:

a. The goods and services haveinsubstantial value, or

b. A statement is included that thesegoods and services consist solely ofintangible religious benefits.

Generally, if a charitable organizationsolicits or receives a contribution of morethan $75 for which it gives the donorsomething in return (a quid pro quocontribution), the organization must informthe donor, by written statement, that theamount of the contribution deductible forFederal income tax purposes is limited tothe amount by which the contributionexceeds the value of the goods orservices received by the donor. Thewritten statement must also provide thedonor with a good-faith estimate of thevalue of goods or services given in returnfor the contribution.

Penalties. An organization that doesnot make the required disclosure for eachquid pro quo contribution will incur apenalty of $10 for each failure, not toexceed $5,000 for a particular fundraisingevent or mailing, unless it can showreasonable cause for not providing thedisclosure.

For more information. SeeRegulations section 1.170A-13 for moreinformation on charitable recordkeepingand substantiation requirements.Line 2—Certain contributions from“split-interest” trusts described insection 4947(a)(2). The income portionof distributions from split-interest truststhat was earned on amounts placed intrust after May 26, 1969, is treated asinvestment income. Include only theincome portion of these distributions online 2. That same figure is a part ofline 1.Line 3—Interest on savings andtemporary cash investments.

In column (a), enter the total amountof interest income from investments of thetype reportable in Balance Sheets, Part II,line 2. These include savings or otherinterest-bearing accounts and temporarycash investments, such as money marketfunds, commercial paper, certificates ofdeposit, and U.S. Treasury bills or othergovernment obligations that mature inless than 1 year.

In column (b), enter the amount ofinterest income shown in column (a). Donot include interest on tax-exemptgovernment obligations.

In column (c), enter the amount ofinterest income shown in column (a).Include interest on tax-exemptgovernment obligations.Line 4—Dividends and interest fromsecurities.

In column (a), enter the amount ofdividend and interest income fromsecurities (stocks and bonds) of the typereportable in Balance Sheets, Part II, line


10. Include amounts received frompayments on securities loans, as definedin section 512(a)(5). Do not include anycapital gain dividends reportable on line6. Report income from program-relatedinvestments on line 11. For debtinstruments with an original issuediscount, report the original issue discountratably over the life of the bond on line 4.See section 1272 for more information.

In column (b), enter the amount ofdividend and interest income, andpayments on securities loans from column(a). Do not include interest on tax-exemptgovernment obligations.

In column (c), enter the amount ofdividends and interest income, andpayments on securities loans from column(a). Include interest on tax-exemptgovernment obligations.Line 5a—Gross rents.

In column (a), enter the gross rentalincome for the year from investmentproperty reportable on line 11 of Part II.

In columns (b) and (c), enter the grossrental income from column (a).Line 5b—Net rental income or (loss).Figure the net rental income or (loss) forthe year and enter that amount on theentry line to the left of column (a).

Report rents from other sources on line11, Other income. Enter any expensesattributable to the rental income reportedon line 5, such as interest anddepreciation, on lines 13–23.Line 6a—Net gain or (loss) from saleof assets. Enter the net gain or (loss) perbooks from all asset sales not includedon line 10.

For assets sold and not included in PartIV, attach a schedule showing:● Date acquired,● Manner of acquisition,● Gross sales price,● Cost, other basis, or value at time ofacquisition (if donated) and which of thesemethods was used,● Date sold,● To whom sold,● Expense of sale and cost ofimprovements made subsequent toacquisition, and● Depreciation since acquisition (ifdepreciable property).Line 6b—Gross sales price for allassets on line 6a. Enter the gross salesprice from all asset sales whose net gainor loss was reported on line 6a.Line 7—Capital gain net income. Enterthe capital gain net income from Part IV,line 2. See Part IV instructions.Line 8—Net short-term capital gain.

TIPOnly private operating foundationsreport their short-term capital gainson line 8.

Include only net short-term capital gainfor the year (assets sold or exchangedthat were held not more than 1 year). Do

not include a net long-term capital gainor a net loss in column (c).

Do not include on line 8 a net gain fromthe sale or exchange of depreciableproperty, or land used in a trade orbusiness (section 1231) and held for morethan 1 year. However, include a net lossfrom such property on line 23 as an Otherexpense.

In general, organizations may carry toline 8 the net short-term capital gainreported on Part IV, line 3. However, if thefoundation had any short-term capital gainfrom sales of debt-financed property, addit to the amount reported on Part IV, line3, to figure the amount to include on line8. For the definition of “debt-financedproperty,” see the instructions for Form990-T.Line 9—Income modifications. Includeon this line:● Amounts received or accrued asrepayments of amounts taken intoaccount as qualifying distributions (seethe instructions for Part XII for anexplanation of qualifying distributions) forany year.● Amounts received or accrued from thesale or other disposition of property to theextent that the acquisition of the propertywas considered a qualifying distributionfor any tax year.● Any amount set aside for a specificproject (see explanation in the instructionsfor Part XII) that was not necessary for thepurposes for which it was set aside.● Income received from an estate, butonly if the estate was consideredterminated for income tax purposes dueto a prolonged administration period.● Amounts treated in an earlier tax yearas qualifying distributions to:

1. A nonoperating private foundation,if the amounts were not redistributed bythe grantee organization by the close ofits tax year following the year in which itreceived the funds, or

2. An organization controlled by thedistributing foundation or a disqualifiedperson if the amounts were notredistributed by the grantee organizationby the close of its tax year following theyear in which it received the funds.

Lines 10a, b, c—Gross profit fromsales of inventory. Enter the gross sales(less returns and allowances), cost ofgoods sold, and gross profit or (loss) fromthe sale of all inventory items, includingthose sold in the course of special eventsand activities. These inventory items arethe ones the organization either makes tosell to others or buys for resale.

Do not report any sales or exchangesof investments on line 10.

Do not include any profit or (loss) fromthe sale of capital items such assecurities, land, buildings, or equipmenton line 10. Enter these amounts online 6a.

Do not include any business expensessuch as salaries, taxes, rent, etc., on line10. Include them on lines 13–23.

Attach a schedule showing thefollowing items: Gross sales, Cost ofgoods sold, Gross profit or (loss). Theseitems should be classified according totype of inventory sold (such as books,tapes, other educational or religiousmaterial, etc.). The totals from theschedule should agree with the entries onlines 10a–10c.

In column (c), enter the gross profit or(loss) from sales of inventory shown incolumn (a), line 10c.Line 11—Other income. Enter the totalof all the foundation's other income for theyear. Include all income not reported onlines 1 through 10c. See the instructionsfor Part XVI-A, line 11. Include imputedinterest on certain deferred paymentsfigured under section 483, and anyinvestment income not reportable on lines3 through 5, including income fromprogram-related investments (defined inthe instructions for Part IX-B). However,do not include unrealized gains andlosses on investments carried at marketvalue. Report those as fund balance ornet asset adjustments in Part III. Attach aschedule showing the description andamount of the income.

In column (b), enter the amount ofinvestment income included in line 11,column (a). Include dividends, interest,rents, and royalties derived from assetsdevoted to charitable activities, such asinterest on student loans.

In column (c), include all other itemsincludible in adjusted net income notcovered elsewhere in column (c).Line 12—Total. In column (b), domesticorganizations should enter the total oflines 2–11. Exempt foreign organizations,enter the total of lines 3, 4, 5, and 11 only.Line 13—Compensation of officers,directors, trustees, etc.

In column (a), enter the totalcompensation for the year of all officers,directors, and trustees. If none was paid,enter zero. Complete line 1 of Part VIII toshow the compensation of officers,directors, trustees, and foundationmanagers.

In columns (b), (c), and (d), enter theportion of the compensation included incolumn (a) that is applicable to thecolumn. For example, in column (c) enterthe portion of the compensation includedin column (a) that was paid or incurred toproduce or collect income included incolumn (c).Line 14—Other employee salaries andwages. Enter the salaries and wages ofall employees other than those includedon line 13.Line 15—Contributions to employeepension plans and other benefits.Enter the employer's share of thecontributions the organization paid toqualified and nonqualified pension plans


and the employer's share of contributionsto employee benefit programs (such asinsurance, health, and welfare programs)that are not an incidental part of a pensionplan. Complete the return/report of theForm 5500 series appropriate for theorganization's plan. (See the Instructionsfor Form 5500 for information aboutemployee welfare benefit plans requiredto file that form.)

Also include the amount of Federal,state, and local payroll taxes for the year,but only those that are imposed on theorganization as an employer. Thisincludes the employer's share of socialsecurity and Medicare taxes, FUTA tax,state unemployment compensation tax,and other state and local payroll taxes.Do not include taxes withheld fromemployees' salaries and paid over to thevarious governmental units (such asFederal and state income taxes and theemployee's share of social security andMedicare taxes).Lines 16a, b, and c—Legal, accounting,and other professional fees. On theappropriate line(s), enter the amount oflegal, accounting, auditing, and otherprofessional fees (such as fees forfundraising or investment services)charged by outside firms andindividuals who are not employees of thefoundation.

Attach a schedule for lines 16a, b, andc. Show the type of service and amountof expense for each. If the same personprovided more than one of these services,include an allocation of those expenses.

Report any fines, penalties, orjudgments imposed against thefoundation as a result of legalproceedings on line 23, Other expenses.Line 18—Taxes. Attach a schedule listingthe type and amount of each tax reportedon line 18. Do not enter any taxesincluded on line 15.

In column (a), enter the taxes paid (oraccrued) during the year. Include all typesof taxes recorded on the books, includingreal estate tax not reported on line 20; thetax on investment income; and anyincome tax.

In column (b), enter only those taxesincluded in column (a) that are related toinvestment income taxable under section4940. Do not include the section 4940 taxpaid or incurred on net investment incomeor the section 511 tax on unrelatedbusiness income. Sales taxes may not bededucted separately, but must be treatedas a part of the cost of acquired property,or as a reduction of the amount realizedon disposition of the property.

In column (c), enter only those taxesincluded in column (a) that relate toincome included in column (c). Do notinclude any excise tax paid or incurred onthe net investment income (as shown inPart VI), or any tax reported on Form990-T.

In column (d), do not include anyexcise tax paid on investment income (asreported in Part VI of this return or theequivalent part of a return for prior years)unless the organization is claiming statusas a private operating foundation andcompletes Part XIV.Line 19—Depreciation and depletion.

In column (a), enter the expenserecorded in the books for the year.

For depreciation, attach a scheduleshowing:

1. A description of the property,2. The date acquired,3. The cost or other basis (exclude

any land),4. The depreciation allowed or

allowable in prior years,5. The method of computation,6. The rate (%) or life (years), and7. The depreciation this year.

On a separate line on the schedule,show the amount of depreciation includedin cost of goods sold and not included online 19.

In columns (b) and (c), a deduction fordepreciation is allowed only for propertyused in the production of income reportedin the column, and only using the straightline method of computing depreciation.A deduction for depletion is allowed butmust be figured only using the costdepletion method.

The basis used in figuring depreciationand depletion is the basis determinedunder normal basis rules, without regardto the special rules for using the fairmarket value on December 31, 1969, thatrelate only to gain or loss on dispositionsfor purposes of the tax on net investmentincome.Line 20—Occupancy. Enter the amountpaid or incurred for the use of office spaceor other facilities. If the space is rentedor leased, enter the amount of rent. If thespace is owned, enter the amount ofmortgage interest, real estate taxes, andsimilar expenses, but not depreciation(reportable on line 19). In either case,include the amount for utilities and relatedexpenses (e.g., heat, lights, water, power,telephone, sewer, trash removal, outsidejanitorial services, and similar services).Do not include any salaries of theorganization's own employees that arereportable on line 14.Line 21—Travel, conferences, andmeetings. Enter the expenses forofficers, employees, or others during theyear for travel, attending conferences,meetings, etc. Include transportation(including fares, mileage allowance, orautomobile expenses), meals andlodging, and related costs whether paidon the basis of a per diem allowance oractual expenses incurred. Do not includeany compensation paid to those whoparticipate.

In column (b), only 50% of theexpense for business meals, etc., paid orincurred in connection with travel,meetings, etc., relating to the productionof investment income, may be deductedin figuring net investment income (section274(n)).

In column (c), enter the total amountof expenses paid or incurred by officers,employees, or others for travel,conferences, meetings, etc., related toincome included in column (c).Line 22—Printing and publications.Enter the expenses for printing orpublishing and distributing anynewsletters, magazines, etc. Also includethe cost of subscriptions to, or purchasesof, magazines, newspapers, etc.Line 23—Other expenses. Enter allother expenses for the year. Include allexpenses not reported on lines 13–22.Attach a schedule showing the type andamount of each expense.

If a deduction is claimed foramortization, attach a schedule showing:● Description of the amortized expenses;● Date acquired, completed, orexpended;● Amount amortized;● Deduction for prior years;● Amortization period (number ofmonths);● Current-year amortization; and● Total amount of amortization.

In column (c), in addition to theapplicable portion of expenses fromcolumn (a), include any net loss from thesale or exchange of land or depreciableproperty that was held for more than1 year and used in a trade or business.

A deduction for amortization is allowedbut only for assets used for the productionof income reported in column (c).Line 25—Contributions, gifts, grantspaid.

In column (a), enter the total of allcontributions, gifts, grants, and similaramounts paid (or accrued) for the year.List each contribution, gift, grant, etc., inPart XV, or attach a schedule of the itemsincluded on line 25 and list:

1. Each class of activity,2. A separate total for each activity,3. Name and address of donee,4. Relationship of donee if related by:a. Blood,b. Marriage,c. Adoption, ord. Employment (including children of

employees) to any disqualified person(see General Instruction C for definitions),and

5. The organizational status of donee(e.g., public charity—an organizationdescribed in section 509(a)(1), (2), or (3)).

You do not have to give the name ofany indigent person who received one ormore gifts or grants from the foundation


unless that individual is a disqualifiedperson or one who received a total ofmore than $1,000 from the foundationduring the year.

Activities should be classified accordingto purpose and in greater detail thanmerely classifying them as charitable,educational, religious, or scientificactivities. For example, use identificationsuch as: payments for nursing service, forfellowships, or for assistance to indigentfamilies.

Foundations may include, as a singleentry on the schedule, the total ofamounts paid as grants for which thefoundation exercised expenditureresponsibility. Attach a separate report foreach grant.

When the fair market value of theproperty at the time of disbursement is themeasure of a contribution, the schedulemust also show:

1. A description of the contributedproperty,

2. The book value of the contributedproperty,

3. The method used to determine thebook value,

4. The method used to determine thefair market value, and

5. The date of the gift.

TIPThe difference between fair marketvalue and book value should beshown in the books of account and

as a net asset adjustment in Part III.In column (d), enter on line 25 all

contributions, gifts, and grants thefoundation paid during the year.● Do not include contributions toorganizations controlled by the foundationor by a disqualified person (see GeneralInstruction C for definitions). Do notinclude contributions to nonoperatingprivate foundations unless the donees areexempt from tax under section 501(c)(3),they redistribute the contributions, andthey maintain sufficient evidence ofredistributions according to theregulations under section 4942(g).● Do not reduce the amount of grantspaid in the current year by the amount ofgrants paid in a prior year that wasreturned or recovered in the current year.Report those repayments in column (c),line 9, and in Part XI, line 4a.● Do not include any payments ofset-asides (see instructions for Part XII,line 3) taken into account as qualifyingdistributions in the current year or anyprior year. All set-asides are included inqualifying distributions (Part XII, line 3) inthe year of the set-aside regardless ofwhen paid.● Do not include current year's write-offsof prior years' program-relatedinvestments. All program-relatedinvestments are included in qualifyingdistributions (Part XII, line 1b) in the yearthe investment is made.

● Do not include any payments that arenot qualifying distributions as defined insection 4942(g)(1).

Net AmountsLine 27a—Excess of revenue overexpenses. Subtract line 26, column (a),from line 12, column (a). Enter the result.Generally, the amount shown in column(a) on this line is also the amount bywhich net assets (or fund balances) haveincreased or decreased for the year. Seethe instructions for Part III, Analysis ofChanges in Net Assets or Fund Balances.Line 27b—Net investment income.Domestic organizations, subtract line 26from line 12. Enter the result. Exemptforeign organizations, enter the amountshown on line 12. However, if theorganization is a domestic organizationand line 26 is more than line 12 (i.e.,expenses exceed income), enter zero (nota negative amount).Line 27c—Adjusted net income.Subtract line 26, column (c) from line 12,column (c) and enter the result.

Part II—Balance SheetsFor column (b), show the book value atthe end of the year. For column (c), showthe fair market value at the end of theyear. Attached schedules must show theend-of-year value for each asset listed incolumns (b) and (c).● Foundations whose books of accountincluded total assets of $5,000 or moreat any time during the year must completeall of columns (a), (b), and (c).● Foundations with less than $5,000 oftotal assets per books at all times duringthe year must complete all of columns (a)and (b), and only line 16 of column (c).

TIPA foundation that is changing itsmethod of accounting to complywith SFAS 116 should not restate

its beginning of year statement of financialposition (balance sheet) to reflect anyprior period adjustments. See PartIII—Analysis of Changes in Net Assets orFund Balances to find where to show anyadjustment required by section 481(a).Line 1—Cash—Non-interest-bearing.Enter the amount of cash on deposit inchecking accounts, deposits in transit,change funds, petty cash funds, or anyother non-interest-bearing account. Donot include advances to employees orofficers or refundable deposits paid tosuppliers or others.Line 2—Savings and temporary cashinvestments. Enter the total of cash insavings or other interest-bearing accountsand temporary cash investments, such asmoney market funds, commercial paper,certificates of deposit, and U.S. Treasurybills or other governmental obligationsthat mature in less than 1 year.Line 3—Accounts receivable. On thedashed lines to the left of column (a),enter the year-end figures for total

accounts receivable and allowance fordoubtful accounts from the sale of goodsand/or the performance of services. Incolumns (a), (b), and (c), enter netamounts (total accounts receivablereduced by the corresponding allowancefor doubtful accounts). Claims againstvendors or refundable deposits withsuppliers or others may be reported hereif not significant in amount. (Otherwise,report them on line 15, Other assets.) Anyreceivables due from officers, directors,trustees, foundation managers, or otherdisqualified persons must be reported online 6. Report receivables (including loansand advances) due from other employeeson line 15.Line 4—Pledges receivable. On thedashed lines to the left of column (a),enter the year-end figures for totalpledges receivable and allowance fordoubtful accounts (pledges estimated tobe uncollectable). In columns (a), (b), and(c), enter net amounts (total pledgesreceivable reduced by the correspondingallowance for doubtful accounts).Line 5—Grants receivable. Enter thetotal grants receivable from governmentalagencies, foundations, and otherorganizations as of the beginning and endof the year.Line 6—Receivables due from officers,directors, trustees, and otherdisqualified persons. Enter here (andon an attached schedule describedbelow) all receivables due from officers,directors, trustees, foundation managers,and other disqualified persons and allsecured and unsecured loans (includingadvances) to such persons. “Disqualifiedperson” is defined in GeneralInstruction C.

Attached schedules. (a) On therequired schedule, report each loanseparately, even if more than one loanwas made to the same person, or thesame terms apply to all loans made.

Salary advances and other advancesfor the personal use and benefit of therecipient and receivables subject tospecial terms or arising from transactionsnot functionally related to the foundation'scharitable purposes must be reported asseparate loans for each officer, director,etc.

(b) Receivables that are subject to thesame terms and conditions (includingcredit limits and rate of interest) asreceivables due from the general publicfrom an activity functionally related to thefoundation's charitable purposes may bereported as a single total for all theofficers, directors, etc. Travel advancesmade for official business of theorganization may also be reported as asingle total.

For each outstanding loan or otherreceivable that must be reportedseparately, the attached schedule shouldshow the following information (preferablyin columnar form):


1. Borrower's name and title.2. Original amount.3. Balance due.4. Date of note.5. Maturity date.6. Repayment terms.7. Interest rate.8. Security provided by the borrower.9. Purpose of the loan.

10. Description and fair market valueof the consideration furnished by thelender (e.g., cash—$1,000; or 100 sharesof XYZ, Inc., common stock— $9,000).

The above detail is not required forreceivables or travel advances that maybe reported as a single total (see (b)above); however, report and identify thosetotals separately on the attachment.Line 7—Other notes and loansreceivable. On the dashed lines to theleft of column (a), enter the combined totalyear-end figures for notes receivable andloans receivable and the allowance fordoubtful accounts.

Notes receivable. In columns (a), (b),and (c), enter the amount of all notesreceivable not listed on line 6 and notacquired as investments. Attach aschedule similar to the one for line 6. Theschedule should also identify therelationship of the borrower to any officer,director, trustee, foundation manager, orother disqualified person.

For a note receivable from any section501(c)(3) organization, list only the nameof the borrower and the balance due onthe required schedule.

Loans receivable. In columns (a), (b),and (c), enter the gross amount of loansreceivable, minus the allowance fordoubtful accounts, from the normalactivities of the filing organization (suchas scholarship loans). An itemized list ofthese loans is not required but attach aschedule showing the total amount ofeach type of outstanding loan. Reportloans to officers, directors, trustees,foundation managers, or other disqualifiedpersons on line 6 and loans to otheremployees on line 15.Line 8—Inventories for sale or use.Enter the amount of materials, goods, andsupplies purchased or manufactured bythe organization and held for sale or usein some future period.Line 9—Prepaid expenses anddeferred charges. Enter the amount ofshort-term and long-term prepayments ofexpenses attributable to one or morefuture accounting periods. Examplesinclude prepayments of rent, insurance,and pension costs, and expensesincurred in connection with a solicitationcampaign to be conducted in a futureaccounting period.Lines 10a, b, and c—Investments—government obligations, corporatestocks and bonds. Enter the book value(which may be market value) of theseinvestments.

Attach a schedule that lists eachsecurity held at the end of the year andshows whether the security is listed atcost (including the value recorded at thetime of receipt in the case of donatedsecurities) or end-of-year market value.Do not include amounts shown on line 2.Governmental obligations reported on line10a are those that mature in 1 year ormore. Debt securities of the U.S.Government may be reported as a singletotal rather than itemized. Obligations ofstate and municipal governments mayalso be reported as a lump-sum total. Donot combine U.S. Government obligationswith state and municipal obligations onthis schedule.Line 11—Investments—land, buildings,and equipment. On the dashed lines tothe left of column (a), enter the year-endbook value (cost or other basis) andaccumulated depreciation of all land,buildings, and equipment held forinvestment purposes, such as rentalproperties. In columns (a) and (b), enterthe book value of all land, buildings, andequipment held for investment lessaccumulated depreciation. In column (c),enter the fair market value of theseassets. Attach a schedule listing theseinvestment fixed assets held at the endof the year and showing, for each item orcategory listed, the cost or other basis,accumulated depreciation, and bookvalue.Line 12—Investments—mortgageloans. Enter the amount of mortgageloans receivable held as investments butdo not include program-relatedinvestments (see instructions for line 15).Line 13—Investments—other. Enter theamount of all other investment holdingsnot reported on lines 10 through 12.Attach a schedule listing and describingeach of these investments held at the endof the year. Show the book value for eachand indicate whether the investment islisted at cost or end-of-year market value.Do not include program-relatedinvestments (see instructions for line 15).Line 14—Land, buildings, andequipment. On the dashed lines to theleft of column (a), enter the year-end bookvalue (cost or other basis) andaccumulated depreciation of all land,buildings, and equipment owned by theorganization and not held for investment.In columns (a) and (b), enter the bookvalue of all land, buildings, and equipmentnot held for investment less accumulateddepreciation. In column (c), enter the fairmarket value of these assets. Include anyproperty, plant, and equipment ownedand used by the organization to conductits charitable activities. Attach a schedulelisting these fixed assets held at the endof the year and showing the cost or otherbasis, accumulated depreciation, andbook value of each item or category listed.Line 15—Other assets. List and showthe book value of each category of assetsnot reportable on lines 1 through 14.

Attach a separate schedule if more spaceis needed.

One type of asset reportable on line 15is program-related investments. Theseare investments made primarily toaccomplish a charitable purpose of thefiling organization rather than to produceincome.Line 16—Total assets. All filers mustcomplete line 16 of columns (a), (b), and(c). These entries represent the totals oflines 1 through 15 of each column.However, organizations that have assetsof less than $5,000 per books at all timesduring the year need not complete lines1 through 15 of column (c).

TIPThe column (c) amount is alsoentered on the entry space for I onpage 1.

Line 17—Accounts payable andaccrued expenses. Enter the total ofaccounts payable to suppliers and othersand accrued expenses, such as salariespayable, accrued payroll taxes, andinterest payable.Line 18—Grants payable. Enter theunpaid portion of grants and awards thatthe organization has made a commitmentto pay other organizations or individuals,whether or not the commitments havebeen communicated to the grantees.Line 19—Deferred revenue. Includerevenue that the organization hasreceived but not yet earned as of thebalance sheet date under its method ofaccounting.Line 20—Loans from officers,directors, trustees, and otherdisqualified persons. Enter the unpaidbalance of loans received from officers,directors, trustees, and other disqualifiedpersons. For loans outstanding at the endof the year, attach a schedule that shows(for each loan) the name and title of thelender and the information listed in items2 through 10 of the instructions for line 6on this page.Line 21—Mortgages and other notespayable. Enter the amount of mortgagesand other notes payable at the beginningand end of the year. Attach a scheduleshowing, as of the end of the year, thetotal amount of all mortgages payableand, for each nonmortgage note payable,the name of the lender and the otherinformation specified in items 2 through10 of the instructions for line 6. Theschedule should also identify therelationship of the lender to any officer,director, trustee, foundation manager, orother disqualified person.Line 22—Other liabilities. List and showthe amount of each liability not reportableon lines 17 through 21. Attach a separateschedule if more space is needed.

Lines 24 Through 30—Net Assetsor Fund BalancesThe Financial Accounting StandardsBoard issued Statement of Financial


Accounting Standards (SFAS) 117,Financial Statements of Not-for-ProfitOrganizations. SFAS 117 providesstandards for external financialstatements certified by an independentaccountant for certain types of nonprofitorganizations including privatefoundations.

While some states may requirereporting in accordance with SFAS 117(see General Instruction F), the IRS doesnot. However, a Form 990-PF returnprepared in accordance with SFAS 117will be acceptable to the IRS.Organizations that follow SFAS 117. Ifthe organization follows SFAS 117, checkthe box above line 24. Classify and reportnet assets in three groups—unrestricted,temporarily restricted, and permanentlyrestricted—based on the existence orabsence of donor-imposed restrictionsand the nature of those restrictions. Showthe sum of the three classes of net assetson line 30. On line 31, add the amountson lines 23 and 30 to show total liabilitiesand net assets. This figure should be thesame as the figure for Total assets online 16.Line 24—Unrestricted. Enter thebalances per books of the unrestrictedclass of net assets. Unrestricted netassets are neither permanently restrictednor temporarily restricted bydonor-imposed stipulations. All fundswithout donor-imposed restrictions mustbe classified as unrestricted, regardlessof the existence of any board designationsor appropriations.Line 25—Temporarily restricted. Enterthe balances per books of the temporarilyrestricted class of net assets. Donors'temporary restrictions may require thatresources be used in a later period orafter a specified date (time restrictions),or that resources be used for a specifiedpurpose (purpose restrictions), or both.Line 26—Permanently restricted. Enterthe total of the balances for thepermanently restricted class of net assets.Permanently restricted net assets are (a)assets, such as land or works of art,donated with stipulations that they beused for a specified purpose, bepreserved, and not be sold or (b) assetsdonated with stipulations that they beinvested to provide a permanent sourceof income. The latter result from gifts andbequests that create permanentendowment funds.Organizations that do not follow SFAS117. If the organization does not followSFAS 117, check the box above line 27and report account balances on lines 27through 29. Report net assets or fundbalances on line 30. Also complete line31 to report the sum of the total liabilitiesand net assets/fund balances.Line 27—Capital stock, trust principal,or current funds. For corporations, enterthe balance per books for capital stockaccounts. Show par or stated value (or for

stock with no par or stated value, totalamount received upon issuance) of allclasses of stock issued and, as yet,uncancelled. For trusts, enter the amountin the trust principal or corpus account.For organizations continuing to use thefund method of accounting, enter the fundbalances for the organization's currentrestricted and unrestricted funds.Line 28—Paid-in or capital surplus, orland, bldg., and equipment fund. Enterthe balance per books for all paid-incapital in excess of par or stated value forall stock issued and uncancelled. Ifstockholders or others gave donationsthat the organization records as paid-incapital, include them here. Report anycurrent-year donations you included online 28 in Part I, line 1. The fund balancefor the land, building, and equipment fundwould be entered here.Line 29—Retained earnings,accumulated income, endowment, orother funds. For corporations, enter thebalance in the retained earnings, orsimilar account, minus the cost of anycorporate treasury stock. For trusts, enterthe balance per books in the accumulatedincome or similar account. Fororganizations using fund accounting,enter the total of the fund balances for thepermanent and term endowment funds aswell as balances of any other funds notreported on lines 27 and 28.Line 30—Total net assets or fundbalances. For organizations that followSFAS 117, enter the total of lines 24through 26. For all other organizations,enter the total of lines 27 through 29.Enter the beginning-of-year figure incolumn (a) on line 1, Part III. Theend-of-year figure in column (b) mustagree with the figure in Part III, line 6.Line 31—Total liabilities and netassets/fund balances. Enter the total oflines 23 and 30. This amount must equalthe amount for total assets reported online 16 for both the beginning and end ofthe year.

Part III—Analysis of Changesin Net Assets or FundBalancesGenerally, the excess of revenue overexpenses accounts for the differencebetween the net assets at the beginningand end of the year.

On line 2, Part III, re-enter the figurefrom Part I, line 27(a), column (a).

On lines 3 and 5, list any changes innet assets that were not caused by thereceipts or expenses shown in Part I,column (a). For example, if a foundationfollows FASB Statement No. 12 andshows an asset in the ending balancesheet at a higher value than in thebeginning balance sheet because of anincreased market value (after a largerdecrease in a prior year), include theincrease in Part III, line 3.

If an organization changes itsaccounting method for tax purposes toconform with the method provided inSFAS 116, it should report any increaserequired by section 481(a) on line 3 andidentify the adjustment as the effect ofchanging to the methods provided inSFAS 116.

If the organization uses a stepped-upbasis to determine gains on sales ofassets included in Part I, column (a), theninclude the amount of step-up in basis inPart III. If you entered a contribution, gift,or grant of property valued at fair marketvalue on line 25 of Part I, column (a), thedifference between fair market value andbook value should be shown in the booksof account and as a net asset adjustmentin Part III.

Part IV—Capital Gains andLosses for Tax onInvestment IncomeUse Part IV to figure the amount of netcapital gain to report on lines 7 and 8 ofPart I.● Part IV does not apply to foreignorganizations.● Nonoperating private foundations maynot have to figure their short-term capitalgain or loss on line 3. See the rules forNonoperating private foundations onpage 11.

Private foundations must report gainsand losses from the sale or otherdisposition of property:● Held for investment purposes or● Used to produce unrelated businessincome; however, only include in netinvestment income the part of the gain orloss that is not included in thecomputation of its unrelated businesstaxable income.Property held for investment purposes.Property is treated as held for investmentpurposes if the property is of a type thatgenerally produces interest, dividends,rents, or royalties, even if the foundationdisposes of the property as soon as itreceives it.Charitable use property. Do not includeany gain or loss from disposing ofproperty used for the foundation'scharitable purposes in the computation oftax on net investment income. If thefoundation uses property for its charitablepurposes, but also incidentally derivesincome from the property that is subjectto the net investment income tax, any gainor loss from the sale or other dispositionof the property is not subject to the tax.

However, if the foundation usesproperty both for charitable purposes and(other than incidentally) for investmentpurposes, include in the computation oftax on net investment income the part ofthe gain or loss from the sale ordisposition of the property that is allocableto the investment use of the property.


Program-related investments. Donot include gains or losses from the saleor exchange of program-relatedinvestments as defined in the instructionsfor Part IX-B.Losses. If the disposition of investmentproperty results in a loss, that loss maybe subtracted from capital gains realizedfrom the disposition of property during thesame tax year but only to the extent of thegains. If losses are more than gains, theexcess may not be subtracted from grossinvestment income, nor may the lossesbe carried back or forward to other taxyears.Basis. The basis for determining gainfrom the sale or other disposition ofproperty is the larger of:

1. The fair market value of theproperty on December 31, 1969, plus orminus all adjustments after December 31,1969, and before the date of disposition,if the foundation held the property on thatdate and continuously after that date untildisposition or

2. The basis of the property on thedate of disposition under normal basisrules (actual basis). See Code sections1011–1021.

The rules that generally apply toproperty dispositions reported in this partare:● Section 1011, Adjusted basis fordetermining gain or loss.● Section 1012, Basis of property—cost.● Section 1014, Basis of propertyacquired from a decedent.● Section 1015, Basis of propertyacquired by gifts and transfers in trust.● Section 1016, Adjustments to basis.

To figure a loss, basis on the date ofdisposition is determined under normalbasis rules.

See Chapter IV of Pub. 578 forexamples on how to determine gain orloss. The completed Form 990-PF inPackage 990-PF, Returns for PrivateFoundations or Section 4947(a)(1)Nonexempt Charitable Trusts Treated asPrivate Foundations, contains an exampleof a sale of investment property in whichthe gain was computed using the donor'sbasis under the rules of section 1015(a).

Part V—Qualification UnderSection 4940(e) for ReducedTax on Net InvestmentIncomeThis part is used by domestic privatefoundations (exempt and taxable) todetermine whether they qualify for thereduced 1% tax under section 4940(e) onnet investment income rather than the 2%tax on net investment income undersection 4940(a).

Do not complete Part V if this is theorganization's first year. A privatefoundation cannot qualify under section

4940(e) for its first year of existence, norcan a former public charity qualify for thefirst year it is treated as a privatefoundation.

A separate computation must be madefor each year in which the foundationwants to qualify for the reduced tax.Line 1, column (b). Enter the amount ofadjusted qualifying distributions made foreach year shown. The amounts in column(b) are taken from Part XII, line 6 of theForm 990-PF for 1995–99.Line 1, column (c). Enter the net valueof noncharitable-use assets for each year.The amounts in column (c) are taken fromPart X, line 5, for 1995–99.

Part VI—Excise Tax Basedon Investment Income(Section 4940(a), 4940(b),4940(e), or 4948)

General RulesDomestic exempt private foundations.These foundations are subject to a 2% taxon net investment income under section4940(a). However, certain exemptoperating foundations described insection 4940(d)(2) may not owe any tax,and certain private foundations that meetthe requirements of section 4940(e) mayqualify for a reduced tax of 1% (see thePart V instructions).

Exception. The section 4940 tax doesnot apply to an organization making anelection under section 41(e)(6). Enter“N/A” in Part VI.Domestic taxable private foundationsand section 4947(a)(1) nonexemptcharitable trusts. These organizationsare subject to a modified 2% tax on netinvestment income under section 4940(b).(See Part V and its instructions to find outif they meet the requirements of section4940(e) that allows them to use amodified 1% tax on net investmentincome.) However, they must firstcompute the tax under section 4940(a) asif that tax applied to them.Foreign organizations. Under section4948, exempt foreign privatefoundations are subject to a 4% tax ontheir gross investment income derivedfrom U.S. sources.

Taxable foreign private foundations thatfiled Form 1040NR, U.S. NonresidentAlien Income Tax Return, or Form1120-F, U.S. Income Tax Return of aForeign Corporation, enter “N/A” in PartVI.Estimated tax. Domestic exempt andtaxable private foundations and section4947(a)(1) nonexempt charitable trustsmay have to make estimated taxpayments for the excise tax based oninvestment income. See GeneralInstruction O for more information.

Tax Computation

CAUTION!

Line 1a only applies to domesticexempt operating foundations thatare described in section 4940(d)(2)

and that have a ruling letter from the IRSestablishing exempt operating foundationstatus. If your organization does nothave this letter, skip line 1a.Line 1a. A domestic exempt privatefoundation that qualifies as an exemptoperating foundation under section4940(d)(2) is not liable for any tax on netinvestment income on this return.

If your organization qualifies, check thebox and enter the date of the ruling letteron line 1a and enter “N/A” on line 1.Leave the rest of Part Vl blank. For thefirst year, the organization must attach acopy of the ruling letter establishingexempt operating foundation status. Aslong as the organization retains thisstatus, write the date of the ruling letter inthe space on line 1a. If the organizationno longer qualifies under section4940(d)(2), leave the date line blank andcompute the section 4940 tax in thenormal manner.

Qualification. To qualify as an exemptoperating foundation for a tax year, anorganization must meet the followingrequirements of section 4940(d)(2):

1. It is an operating foundationdescribed in section 4942(j)(3),

2. It has been publicly supported forat least 10 tax years or was a privateoperating foundation on January 1, 1983,or for its last tax year ending beforeJanuary 1, 1983,

3. Its governing body, at all timesduring the tax year, consists of individualsless than 25% of whom are disqualifiedindividuals, and is broadly representativeof the general public, and

4. It has no officer who was adisqualified individual at any time duringthe tax year.Line 2—Section 511 tax. Under section4940(b), a domestic section 4947(a)(1)nonexempt charitable trust or taxableprivate foundation must add to the taxfigured under section 4940(a) (on line 1)the tax which would have been imposedunder section 511 for the tax year if it hadbeen exempt from tax under section501(a). If the domestic section 4947(a)(1)nonexempt charitable trust or taxableprivate foundation has unrelated businesstaxable income that would have beensubject to the tax imposed by section 511,the computation of tax must be shown inan attachment. Form 990-T may be usedas the attachment. All other filers, enterzero.Line 4—Subtitle A tax. Domestic section4947(a)(1) nonexempt charitable trustsand taxable private foundations, enter theamount of subtitle A (income) tax for theyear reported on Form 1041 or Form1120. All other filers, enter zero.


Line 5—Tax based on investmentincome. Subtract line 4 from line 3 andenter the difference (but not less thanzero) on line 5. Any overpayment enteredon line 10 that is the result of a negativeamount shown on line 5 will not berefunded. Unless the organization is adomestic section 4947(a)(1) nonexemptcharitable trust or taxable privatefoundation, the amount on line 5 is thesame as on line 1.

Line 6—Credits/Payments

CAUTION!

Line 6a applies only to domesticorganizations.

Line 6a. Enter the amount of 2000estimated tax payments, and any 1999overpayment of taxes that theorganization specified on its 1999 returnto be credited toward payment of 2000estimated taxes.

Trust payments treated asbeneficiary payments. A trust may treatany part of estimated taxes it paid astaxes paid by the beneficiary. If the filingorganization was a beneficiary thatreceived the benefit of such a paymentfrom a trust, include the amount on line6a of Part VI, and write, “Includes section643(g) payment.” See section 643(g) formore information about estimated taxpayments treated as paid by abeneficiary.Line 6b. Exempt foreign foundationsmust enter the amount of tax withheld atthe source.Line 6d. Enter the amount of any backupwithholding erroneously withheld.Recipients of interest or dividendpayments must generally certify theircorrect tax identification number to thebank or other payer on Form W-9,Request for Taxpayer IdentificationNumber and Certification. If the payerdoes not get this information, it mustwithhold part of the payments as “backupwithholding.” If the organization files Form990-PF and was subject to erroneousbackup withholding because the payer didnot realize the payee was an exemptorganization and not subject to thiswithholding, the organization can claimcredit for the amount withheld.

CAUTION!

Do not claim erroneous backupwithholding on line 6d if you claimit on Form 990-T.

Line 8—Penalty. Enter any penalty forunderpayment of estimated tax shown onForm 2220. Form 2220 is used by bothcorporations and trusts.Line 9—Tax due. Domestic foundationsshould see General Instruction P.

All foreign organizations should enclosea check or money order (in U.S. funds),made payable to the United StatesTreasury, with Form 990-PF.

Part VII-A—StatementsRegarding ActivitiesEach question in this section must beanswered “Yes,” “No,” or “N/A” (notapplicable).Line 1. Political purposes include, but arenot limited to: directly or indirectlyaccepting contributions or makingpayments to influence the selection,nomination, election, or appointment ofany individual to any Federal, state, orlocal public office or office in a politicalorganization, or the election ofpresidential or vice presidential electors,whether or not the individual or electorsare actually selected, nominated, elected,or appointed.Line 3. A “conformed” copy of anorganizational document is one thatagrees with the original document and allits amendments. If copies are not signed,attach a written declaration signed by anofficer authorized to sign for theorganization, certifying that they arecomplete and accurate copies of theoriginal documents.Line 6. For a private foundation to beexempt from income tax, its governinginstrument must include provisions thatrequire it to act or refrain from acting soas not to engage in an act of self-dealing(section 4941), or subject the foundationto the taxes imposed by sections 4942(failure to distribute income), 4943(excess business holdings), 4944(investments which jeopardize charitablepurpose), and 4945 (taxableexpenditures). A private foundation maysatisfy these section 508(e) requirementseither by express language in itsgoverning instrument or by application ofstate law that imposes the aboverequirements on the foundation or treatsthese requirements as being contained inthe governing instrument. If anorganization claims it satisfies therequirements of section 508(e) byoperation of state law, the provisions ofstate law must effectively impose thesection 508(e) requirements on theorganization. See Rev. Rul. 75-38, 1975-1C.B.161, for a list of states with legislationthat satisfies the requirements of section508(e).

However, if the state law does not applyto a governing instrument that containsmandatory directions conflicting with anyof its requirements and the organizationhas such mandatory directions in itsgoverning instrument, then theorganization has not satisfied therequirements of section 508(e) by theoperation of that legislation.Line 8a. In the space provided list allstates:

1. To which the organization reportsin any way about its organization, assets,or activities and

2. With which the organization hasregistered (or which it has otherwisenotified in any manner) that it intends tobe, or is, a charitable organization or thatit is, or intends to be, a holder of propertydevoted to a charitable purpose.

Attach a separate list if you need morespace.Line 9. If the organization claims statusas a private operating foundation for 2000and, in fact, meets the private operatingfoundation requirements for that year (asreflected in Part XIV), any excessdistributions carryover from 1999 or prioryears may not be carried over to 2000 orany year after 2000 in which it does notmeet the private operating foundationrequirements. See the instructions forPart XIII.Line 10—Substantial contributors. Ifyou answer “Yes,” attach a schedulelisting the names and addresses of allpersons who became substantialcontributors during the year.

The term substantial contributormeans any person whose contributionsor bequests during the current tax yearand prior tax years total more than $5,000and are more than 2% of the totalcontributions and bequests received bythe foundation from its creation throughthe close of its tax year. In the case of atrust, the term “substantial contributor”also means the creator of the trust(section 507(d)(2)).

The term person includes individuals,trusts, estates, partnerships, associations,corporations, and other exemptorganizations.

Each contribution or bequest must bevalued at fair market value on the date itwas received.

Any person who is a substantialcontributor on any date will remain asubstantial contributor for all later periods.

However, a person will cease to be asubstantial contributor with respect to anyprivate foundation if:

1. The person, and all relatedpersons, made no contributions to thefoundation during the 10-year periodending with the close of the taxable year;

2. The person, or any related person,was never the foundation's managerduring this 10-year period; and

3. The aggregate contributions madeby the person, and related persons, aredetermined by the IRS to be insignificantcompared to the aggregate amount ofcontributions to the foundation by anyother person and the appreciated valueof contributions held by the foundation.

The term related person includes anyother person who would be a disqualifiedperson because of a relationship with thesubstantial contributor (section 4946).When the substantial contributor is acorporation, the term also includes anyofficer or director of a corporation. Theterm “substantial contributor” does not


include public charities (organizationsdescribed in section 509(a)(1), (2), or (3)).Line 11—Public inspectionrequirements. All domestic privatefoundations (including section 4947(a)(1)nonexempt charitable trusts treated asprivate foundations) are subject to thepublic inspection requirements. SeeGeneral Instruction Q for information onmaking the foundation's annual returnsand exemption application available forpublic inspection.Line 13—Section 4947(a)(1) trusts.Section 4947(a)(1) nonexempt charitabletrusts that file Form 990-PF instead ofForm 1041 must complete this line. Thetrust should include exempt-interestdividends received from a mutual fund orother regulated investment company aswell as tax-exempt interest receiveddirectly.

Part VII-B—Activities forWhich Form 4720 May BeRequiredThe purpose of these questions is todetermine if there is any initial excise taxdue under sections 170(f)(10),4941–4945, and section 4955. If theanswer is “Yes” to question 1b, 1c, 2b, 3b,4a, 4b, 5b, or 6b, complete and file Form4720, unless an exception applies.Line 1—Self-dealing. The activities listedin 1a(1)–(6) are considered self-dealingunder section 4941 unless one of theexceptions applies. See Pub. 578.

The terms “disqualified person” and“foundation manager” are defined inGeneral Instruction C.Line 1b. If you answered “Yes” to anyof the questions in 1a, you should answer“Yes” to 1b unless all of the acts engagedin were “excepted” acts. Excepted actsare described in Regulations sections53.4941(d)-3 and 4 or appear in Noticespublished in the Internal RevenueBulletin, relating to disaster assistance.Line 2—Taxes on failure to distributeincome. If you answer “No” to question2b, attach a statement explaining:

1. All the facts regarding the incorrectvaluation of assets and

2. The actions taken (or planned) tocomply with section 4942(a)(2)(B), (C),and (D) and the related regulations.Line 3a. A private foundation is nottreated as having excess businessholdings in any enterprise if, together withrelated foundations, it owns 2% or less ofthe voting stock and 2% or less in valueof all outstanding shares of all classes ofstock. (See “disqualified person” underGeneral Instruction C.) A similarexception applies to a beneficial or profitsinterest in any business enterprise that isa trust or partnership.

For more information about excessbusiness holdings, see Pub. 578 and theinstructions for Form 4720.

Line 4—Taxes on investments thatjeopardize charitable purposes. Ingeneral, an investment that jeopardizesany of the charitable purposes of a privatefoundation is one for which a foundationmanager did not exercise ordinarybusiness care to provide for the long- andshort-term financial needs of thefoundation in carrying out its charitablepurposes. For more details, see Pub. 578and the regulations under section 4944.Line 5—Taxes on taxable expendituresand political expenditures. In general,payments made for the activitiesdescribed on lines 5a(1)–(5) are taxableexpenditures. See Pub. 578 forexceptions.

A grant by a private foundation to apublic charity is not a taxable expenditureif the private foundation does not earmarkthe grant for any of the activitiesdescribed in lines 5a(1)–(5), and there isno oral or written agreement by which thegrantor foundation may cause the granteeto engage in any such prohibited activityor to select the grant recipient.

Grants made to exempt operatingfoundations (as defined in section4940(d)(2) and the instructions to Part VI)are not subject to the expenditureresponsibility provisions of section 4945.

Under section 4955, a section 501(c)(3)organization must pay an excise tax forany amount paid or incurred on behalf ofor opposing any candidate for publicoffice. The organization must pay anadditional excise tax if it does not correctthe expenditure timely.

A manager of a section 501(c)(3)organization who knowingly agrees to apolitical expenditure must pay an excisetax unless the agreement is not willful andthere is reasonable cause. A managerwho does not agree to a correction of thepolitical expenditure may have to pay anadditional excise tax.

A section 501(c)(3) organization willlose its exempt status if it engages inpolitical activity.

A political expenditure that is treatedas an expenditure under section 4955 isnot treated as a taxable expenditureunder section 4945.

For purposes of the section 4955 tax,when an organization promotes acandidate for public office (or is used orcontrolled by a candidate or prospectivecandidate), amounts paid or incurred forthe following purposes are politicalexpenditures:

1. Remuneration to the individual (orcandidate or prospective candidate) forspeeches or other services.

2. Travel expenses of the individual.3. Expenses of conducting polls,

surveys, or other studies, or preparingpapers or other material for use by theindividual.

4. Expenses of advertising, publicity,and fundraising for such individual.

5. Any other expense that has theprimary effect of promoting publicrecognition or otherwise primarilyaccruing to the benefit of the individual.

See the regulations under section 4945for more information.Line 5b. If you answered “Yes” to anyof the questions in 5a, you should answer“Yes” to 5b unless all of the transactionsengaged in were “excepted” transactions.Excepted transactions are described inRegulations section 53.4945 or appear inNotices published in the Internal RevenueBulletin, relating to disaster assistance.Line 6b. Check “Yes” if, in connectionwith any transfer of funds to a privatefoundation, the foundation directly orindirectly pays premiums on any personalbenefit contract, or there is anunderstanding or expectation that anyperson will directly or indirectly pay thesepremiums.

Report the premiums it paid and thepremiums paid by others, but treated aspaid by the private foundation, on Form8870 and pay the excise tax (which isequal to premiums paid) on Form 4720.

For more information, see Form 8870and Notice 2000-24, 2000-17 I.R.B. 952(April 24, 2000).

Part VIII—Information AboutOfficers, Directors, Trustees,Foundation Managers, HighlyPaid Employees, andContractorsLine 1—List of officers, directors,trustees, etc. List the names, addresses,and other information requested for thosewho were officers, directors, and trustees(or any person who had responsibilitiesor powers similar to those of officers,directors, or trustees) of the foundation atany time during the year. Each must belisted whether or not they receive anycompensation from the foundation. Givethe preferred address at which officers,etc., want the Internal Revenue Serviceto contact them.

Also include on this list, any officers ordirectors (or any person who hadresponsibilities or powers similar to thoseof officers or directors) of a disregardedentity owned by the foundation who arenot officers, directors, etc., of thefoundation.

If the foundation (or disregarded entity)pays any other person, such as amanagement services company, for theservices provided by any of thefoundation's officers, directors, or trustees(or any person who had responsibilitiesor powers similar to those of officers,directors, or trustees), report thecompensation and other items on Part VIIIas if you had paid the officers, etc.,directly.


Show all forms of compensation earnedby each listed officer, etc. In addition tocompleting Part VIII, if you want to explainthe compensation of one or more officers,directors, and trustees, you may providean attachment describing the person'sentire 2000 compensation package.

Enter zero in columns (c), (d), and (e)if no compensation was paid. Attach aschedule if more space is needed.

Column (b). A numerical estimate ofthe average hours per week devoted tothe position is required for the answer tobe considered complete.

CAUTION!

Phrases such as “as needed” or“as required” are unacceptableentries for column (b).

Column (c). Enter salary, fees,bonuses, and severance paymentsreceived by each person listed. Includecurrent year payments of amountsreported or reportable as deferredcompensation in any prior year.

Column (d). Include all forms ofdeferred compensation and futureseverance payments (whether or notfunded or vested, and whether or not thedeferred compensation plan is a qualifiedplan under section 401(a)). Includepayments to welfare benefit plans(employee welfare benefit plans coveredby Part I of Title 1 of ERISA, providingbenefits such as medical, dental, lifeinsurance, apprenticeship and training,scholarship funds, severance pay,disability, etc.) on behalf of the officers,etc. Reasonable estimates may be usedif precise cost figures are not readilyavailable.

Unless the amounts are reported incolumn (c), report, as deferredcompensation in column (d), salaries andother compensation earned during theperiod covered by the return, but not yetpaid by the date the foundation files itsreturn.

Column (e). Enter both taxable andnontaxable fringe benefits, expenseaccount and other allowances (other thande minimis fringe benefits described insection 132(e)). See Pub. 525 for moreinformation. Examples of allowancesinclude amounts for which the recipientdid not account to the organization orallowances that were more than thepayee spent on serving the organization.Include payments made in connectionwith indemnification arrangements, thevalue of the personal use of housing,automobiles, or other assets owned orleased by the organization (or provided forthe organization's use without charge).Line 2—Compensation of fivehighest-paid employees. Fill in theinformation requested for the fiveemployees (if any) of the foundation (ordisregarded entity that the foundationowns) who received the greatest amountof annual compensation over $50,000. Donot include employees listed on line 1.

Also enter the total number of otheremployees who received more than$50,000 in annual compensation.

Show each listed employee's entirecompensation package for the periodcovered by the return. Include all formsof compensation that each listedemployee received in return for his or herservices. See the line 1 instructions formore details on includible compensation.Line 3—Five highest-paid independentcontractors for professional services.Fill in the information requested for thefive highest-paid independent contractors(if any), whether individuals orprofessional service corporations orassociations, to whom the organizationpaid more than $50,000 for the year toperform personal services of aprofessional nature for the organization(such as attorneys, accountants, anddoctors). Also show the total number ofall other independent contractors whoreceived more than $50,000 for the yearfor performing professional services.

Part IX-A—Summary ofDirect Charitable ActivitiesList the foundation's four largest programsas measured by the direct and indirectexpenses attributable to each that consistof the direct active conduct of charitableactivities. Whether any expenditure is forthe direct active conduct of a charitableactivity is determined, generally, by thedefinitions and special rules of section4942(j)(3) and the related regulations,which define a private operatingfoundation.

Except for significant involvement grantprograms, described below, do notinclude in Part IX-A any grants orexpenses attributable to administeringgrant programs, such as reviewing grantapplications, interviewing or testingapplicants, selecting grantees, andreviewing reports relating to the use of thegrant funds.

Include scholarships, grants, or otherpayments to individuals as part of anactive program in which the foundationmaintains some significant involvement.Related administrative expenses shouldalso be included. Examples of activeprograms and definitions of the term“significant involvement” are provided inRegulations sections 53.4942(b)-1(b)(2)and 53.4942(b)-1(d).

Do not include any program-relatedinvestments (reportable in Part IX-B) inthe description and expense totals, but besure to include qualified set-asides fordirect charitable activities, reported on line3 of Part XII. Also, include in Part IX-A,amounts paid or set aside to acquireassets used in the direct active conductof charitable activities.

Expenditures for direct charitableactivities include, among others, amountspaid or set aside to:

● Acquire or maintain the operatingassets of a museum, library, or historicsite or to operate the facility.● Provide goods, shelter, or clothing toindigents or disaster victims if thefoundation maintains some significantinvolvement in the activity rather thanmerely making grants to the recipients.● Conduct educational conferences andseminars.● Operate a home for the elderly ordisabled.● Conduct scientific, historic, publicpolicy, or other research with significancebeyond the foundation's grant programthat does not constitute a prohibitedattempt to influence legislation.● Publish and disseminate the results ofsuch research, reports of educationalconferences, or similar educationalmaterial.● Support the service of foundation staffon boards or advisory committees of othercharitable organizations or on publiccommissions or task forces.● Provide technical advice or assistanceto a governmental body, a governmentalcommittee, or subdivision of either, inresponse to a written request by thegovernmental body, committee, orsubdivision.● Conduct performing arts performances.● Provide technical assistance tograntees and other charitableorganizations. This assistance must havesignificance beyond the purposes of thegrants made to the grantees and must notconsist merely of monitoring or advisingthe grantees in their use of the grantfunds. Technical assistance involves thefurnishing of expert advice and relatedassistance regarding, for example:

1. Compliance with governmentalregulations;

2. Reducing operating costs orincreasing program accomplishments;

3. Fundraising methods; and4. Maintaining complete and accurate

financial records.

Report both direct and indirectexpenses in the expense totals. Directexpenses are those that can bespecifically identified as connected with aparticular activity. These include, amongothers, compensation and travelexpenses of employees and officersdirectly engaged in an activity, the costof materials and supplies utilized inconducting the activity, and fees paid tooutside firms and individuals inconnection with a specific activity.

Indirect (overhead) expenses are thosethat are not specifically identified asconnected with a particular activity butthat relate to the direct costs incurred inconducting the activity. Examples ofindirect expenses include: occupancyexpenses; supervisory and clericalcompensation; repair, rental, andmaintenance of equipment; expenses of


other departments or cost centers (suchas accounting, personnel, and payrolldepartments or units) that service thedepartment or function that incurs thedirect expenses of conducting an activity;and other applicable general andadministrative expenses, including thecompensation of top management, to theextent reasonably allocable to a particularactivity.

No specific method of allocation isrequired. The method used, however,must be reasonable and must be usedconsistently.

Examples of acceptable allocationmethods include:● Compensation that is allocated on atime basis.● Employee benefits that are allocated onthe basis of direct salary expenses.● Travel, conference, and meetingexpenses that are charged directly to theactivity that incurred the expense.● Occupancy expenses that are allocatedon a space-utilized basis.● Other indirect expenses that areallocated on the basis of direct salaryexpenses or total direct expenses.

Part IX-B—Summary ofProgram-RelatedInvestmentsProgram-related investment. Section4944(c) and corresponding regulationsdefine a program-related investment asone that is made primarily to accomplisha charitable purpose of the foundation andno substantial purpose of which is toproduce investment income or a capitalgain from the sale of the investment.Examples of program-related investmentsinclude educational loans to individualsand low-interest loans to other section501(c)(3) organizations.General instructions. Include only thoseinvestments that were reported in Part XII,line 1b, for the current year. Do notinclude any investments made in any prioryear even if they were still held by thefoundation at the end of 2000.

Investments consisting of loans toindividuals (such as educational loans)are not required to be listed separately butmay be grouped with otherprogram-related investments of the sametype. Loans to other section 501(c)(3)organizations and all other types ofprogram-related investments must belisted separately on lines 1 through 3 oron an attachment.Lines 1 and 2. List the two largestprogram-related investments made by thefoundation in 2000, whether or not theinvestments were still held by thefoundation at the end of the year.Line 3. Combine all otherprogram-related investments and enterthe total on the line 3 Amount column. Listthe individual investments or groups of

investments included (attach a scheduleif necessary).

TIPThe total of lines 1 through 3 in theAmount column must equal theamount reported on line 1b of

Part XII.

Part X—Minimum InvestmentReturnWho must complete this section? Alldomestic foundations must completePart X.

Foreign foundations that checked boxD2 on page 1 do not have to completePart X unless claiming status as a privateoperating foundation.

Private operating foundations,described in sections 4942(j)(3) or4942(j)(5), must complete Part X in orderto complete Part XIV.Overview. A private foundation that is nota private operating foundation must payout, as qualifying distributions, itsminimum investment return. This isgenerally 5% of the total fair market valueof its noncharitable assets, subject tofurther adjustments as explained in theinstructions for Part XI. The amount of thisminimum investment return is figured inPart X and is used in Part XI to figure theamount that is required to be paid out (thedistributable amount).Minimum investment return. In figuringthe minimum investment return, includeonly those assets that are not actuallyused or held for use by the organizationfor a charitable, educational, or othersimilar function that contributed to thecharitable status of the foundation. Cashon hand and on deposit is consideredused or held for use for charitablepurposes only to the extent of thereasonable cash balances reported inPart X, line 4. See the instructions forlines 1b and 4 below.

Assets that are held for the productionof income or for investment are notconsidered to be used directly forcharitable functions even though theincome from the assets is used for thecharitable functions. It is a factualquestion whether an asset is held for theproduction of income or for investmentrather than used or held for use directlyby the foundation for charitable purposes.

For example, an office building that isused to provide offices for employeesengaged in managing endowment fundsfor the foundation is not considered anasset used for charitable purposes.

Dual-use property. When property isused both for charitable and otherpurposes, the property is considered usedentirely for charitable purposes if 95% ormore of its total use is for that purpose.If less than 95% of its total use is forcharitable purposes, a reasonableallocation must be made betweencharitable and noncharitable use.

Excluded property. Certain assetsare excluded entirely from thecomputation of the minimum investmentreturn. These include pledges of grantsand contributions to be received in thefuture and future interests in estates andtrusts. See Pub. 578, chapter VII, for moredetails.Line 1a—Average monthly fair marketvalue of securities. If market quotationsare readily available, a foundation mayuse any reasonable method to determinethe average monthly fair market value ofsecurities such as common and preferredstock, bonds, and mutual fund shares, aslong as that method is consistently used.For example, a value for a particularmonth might be determined by the closingprice on the first or last trading days of themonth or an average of the closing priceson the first and last trading days of themonth. Market quotations are consideredreadily available if a security is any of thefollowing:● Listed on the New York or Americanstock exchange or any city or regionalexchange in which quotations appear ona daily basis, including foreign securitieslisted on a recognized foreign national orregional exchange.● Regularly traded in the national orregional over-the-counter market forwhich published quotations are available.● Locally traded, for which quotations canbe readily obtained from establishedbrokerage firms.

If securities are held in trust for, or onbehalf of, a foundation by a bank or otherfinancial institution that values thosesecurities periodically using a computerpricing system, a foundation may use thatsystem to determine the value of thesecurities. The system must beacceptable to the IRS for Federal estatetax purposes.

The foundation may reduce the fairmarket value of securities only to theextent that it can establish that thesecurities could only be liquidated in areasonable period of time at a price lessthan the fair market value because of:● The size of the block of the securities;● The fact that the securities held aresecurities in a closely held corporation;or● The fact that the sale of the securitieswould result in a forced or distress sale.

Any reduction in value allowed underthese provisions may not be more than10% of the fair market value (determinedwithout regard to any reduction in value).

Also, see Regulations sections53.4942(a)-2(c)(4)(i)(b), (c), and (iv)(a).Line 1b—Average of monthly cashbalances. Compute cash balances on amonthly basis by averaging the amountof cash on hand on the first and last daysof each month. Include all cash balancesand amounts that may be used forcharitable purposes (see line 4 on


this page) or set aside and taken as aqualifying distribution (see Part XII).Line 1c—Fair market value of all otherassets. The fair market value of assetsother than securities is determinedannually except as described below. Thevaluation may be made by privatefoundation employees or by any otherperson even if that person is a disqualifiedperson. If the IRS accepts the valuation,it is valid only for the tax year for which itis made. A new valuation is required forthe next tax year.

5-year valuation. A written, certified,and independent appraisal of the fairmarket value of any real estate, includingany improvements, may be determinedon a 5-year basis by a qualified person.

The qualified person may not be adisqualified person (see GeneralInstruction C) with respect to the privatefoundation or an employee of thefoundation.

Commonly accepted valuation methodsmust be used in making the appraisal. Avaluation based on acceptable methodsof valuing property for Federal estate taxpurposes will be considered acceptable.

The appraisal must include a closingstatement that, in the appraiser's opinion,the appraised assets were valuedaccording to valuation principles regularlyemployed in making appraisals of suchproperty, using all reasonable valuationmethods. The foundation must keep acopy of the independent appraisal for itsrecords. If a valuation is reasonable, thefoundation may use it for the tax year forwhich the valuation is made and for eachof the 4 following tax years.

Any valuation of real estate by acertified independent appraisal may bereplaced during the 5-year period by asubsequent 5-year certified independentappraisal or by an annual valuation asdescribed above. The most recentvaluation should be used to compute thefoundation's minimum investment return.

If the valuation is made according to theabove rules, the IRS will continue toaccept it during the 5-year period forwhich it applies even if the actual fairmarket value of the property changesduring the period.

Valuation date. An asset required tobe valued annually may be valued as ofany day in the private foundation's taxyear, provided the foundation values theasset as of that date in all tax years.However, a valuation of real estatedetermined on a 5-year basis by acertified, independent appraisal may bemade as of any day in the first tax yearof the foundation to which the valuationapplies.

Assets held for less than a tax year.To determine the value of an asset heldless than 1 tax year, divide the numberof days the foundation held the asset bythe number of days in the tax year.

Multiply the result by the fair market valueof the asset.Line 1e—Reduction claimed forblockage or other factors. If the fairmarket value of any securities, real estateholdings, or other assets reported on lines1a and 1c reflects a blockage discount,marketability discount, or other reductionfrom full fair market value because of thesize of the asset holding or any otherfactor, enter on line 1e the aggregateamount of the discounts claimed. Attachan explanation that includes the followinginformation for each asset or group ofassets involved:

1. A description of the asset or assetgroup (e.g., 20,000 shares of XYZ, Inc.,common stock);

2. For securities, the percentage ofthe total issued and outstanding securitiesof the same class that is represented bythe foundation's holding;

3. The fair market value of the assetor asset group before any claimedblockage discount or other reduction;

4. The amount of the discountclaimed; and

5. A statement that explains why theclaimed discount is appropriate in valuingthe asset or group of assets for section4942 purposes.

In the case of securities, there arecertain limitations on the size of thereduction in value that can be claimed.See the instructions for Part X, line 1a.Line 2—Acquisition indebtedness.Enter the total acquisition indebtednessthat applies to assets included on line 1.For details, see section 514(c)(1).Line 4—Cash deemed held forcharitable activities. Foundations mayexclude from the assets used in theminimum investment return computationthe reasonable cash balances necessaryto cover current administrative expensesand other normal and currentdisbursements directly connected with thecharitable, educational, or other similaractivities. The amount of cash that maybe excluded is generally 11/2% of the fairmarket value of all assets (minus anyacquisition indebtedness) as computed inPart X, line 3. However, if under the factsand circumstances an amount larger thanthe deemed amount is necessary to payexpenses and disbursements, then youmay enter the larger amount instead of11 / 2% of the fair market value on line 4. Ifyou use a larger amount, attach anexplanation.Line 6—Short tax periods. If thefoundation's tax period is less than 12months, determine the applicablepercentage by dividing the number ofdays in the short tax period by 365 (or 366in a leap year). Multiply the result by 5%.Then multiply the modified percentage bythe amount on line 5 and enter the resulton line 6.

Part XI—DistributableAmountIf the organization is claiming status as aprivate operating foundation described insection 4942(j)(3) or (j)(5) or if it is aforeign foundation that checked box D2on page 1, check the box in the headingfor Part XI. You do not need to completethis part. See the Part XIV instructions formore details on private operatingfoundations.

Section 4942(j)(5) organizations areclassified as private operating foundationsfor purposes of section 4942 only if theymeet the requirements of Regulationssection 53.4942(b)-1(a)(2).

The distributable amount for 2000 is theamount that the foundation must distributeby the end of 2001 as qualifyingdistributions to avoid the 15% tax on theundistributed portion.Line 4a. Enter the total of recoveries ofamounts treated as qualifying distributionsfor any year under section 4942(g).Include recoveries of part or all (asapplicable) of grants previously made;proceeds from the sale or otherdisposition of property whose cost wastreated as a qualifying distribution whenthe property was acquired; and anyamount set aside under section 4942(g)to the extent it is determined that thisamount is not necessary for the purposesof the set-aside.Line 4b—Income distributions fromsection 4947(a)(2) trusts. The incomeportion of distributions from split-interesttrusts on amounts placed in trust afterMay 26, 1969, must be added to thedistributable amount, subject to thelimitation of Regulations section53.4942(a)-2(b)(2)(iii).

A “split-interest trust” is defined insection 4947(a)(2) as a trust that is notexempt from tax under section 501(a), notall of the unexpired interests of which aredevoted to charitable, religious,educational, and like purposes, and thathas amounts in trust for which a charitablecontributions deduction has been allowed.

If the foundation receives distributionsthat include amounts placed in trustbefore May 27, 1969, and amounts placedin trust after May 26, 1969, thesedistributions must be allocated betweenthose amounts to determine the extent towhich the distributions are included in thefoundation's distributable amount.Line 6—Deduction from distributableamount. If the foundation was organizedbefore May 27, 1969, and its governinginstrument or any other instrumentcontinues to require the accumulation ofincome after a judicial proceeding toreform the instrument has terminated,then the amount of the income requiredto be accumulated must be subtractedfrom the distributable amount beginningwith the first tax year after the tax year in


which the judicial proceeding wasterminated. (See the instructions for PartVII-A, line 6.)

Part XII—QualifyingDistributions“Qualifying distributions” are amountsspent or set aside for religious,educational, or similar charitablepurposes. The total amount of qualifyingdistributions for any year is used toreduce the distributable amount forspecified years to arrive at theundistributed income (if any) for thoseyears.Line 1a—Expenses, contributions,gifts, etc. Enter the amount from Part I,column (d), line 26. However, if theborrowed funds election applies, add thetotal of the repayments during the year tothe amount from Part I, column (d), line26, and enter it on line 1a.

Borrowed funds. If the foundationborrowed money in a tax year beginningbefore January 1, 1970, or later borrowsmoney under a written commitmentbinding on December 31, 1969, thefoundation may elect to treat anyrepayments of the loan principal afterDecember 31, 1969, as qualifyingdistributions at the time of repayment,rather than at the earlier time that theborrowed funds were actually distributed,only if:

1. The money is used to makeexpenditures for a charitable or similarpurpose and

2. Repayment on the loan did not startuntil a year beginning after 1969.

On these loans, deduct any interestpayment from gross income to computeadjusted net income in the year paid.

Election. To make this election, attacha statement to Form 990-PF for the firsttax year beginning after 1969 in which arepayment of loan principal is made andfor each tax year after that in which anyrepayment of loan principal is made. Thestatement should show:● The lender's name and address.● The amount borrowed.● The specific use of the borrowed funds.● The private foundation's election totreat repayments of loan principal asqualifying distributions.Line 1b—Program-related investments.Enter the total of the “Amount” columnfrom Part IX-B. See the Part IX-Binstructions for the definition ofprogram-related investments.Line 3—Amounts set aside. Amountsset aside may be treated as qualifyingdistributions only if the private foundationestablishes to the satisfaction of the IRSthat the amount will be paid for thespecific project within 60 months from thedate of the first set-aside and meets 1 or2 below.

1. The project can be betteraccomplished by a set-aside than by theimmediate payment of funds (suitabilitytest) or

2. The private foundation meets therequirements of section 4942(g)(2)(B)(ii)(cash distribution test).

Set-aside under item 1. For anyset-aside under 1 above, the privatefoundation must apply for IRS approvalby the end of the tax year in which theamount is set aside. Send the applicationfor approval to the Internal RevenueService, P.O. Box 27720, McPhersonStation, Washington, DC 20038.

The application for approval must giveall of the following information:● The nature and purposes of the specificproject and the amount of the set-asidefor which approval is requested;● The amounts and approximate datesof any planned additions to the set-asideafter its initial establishment;● The reasons why the project can bebetter accomplished by the set-aside thanby the immediate payment of funds;● A detailed description of the project,including estimated costs, sources of anyfuture funds expected to be used forcompletion of the project, and thelocation(s) (general or specific) of anyphysical facilities to be acquired orconstructed as part of the project; and● A statement of an appropriatefoundation manager that the amounts setaside will actually be paid for the specificproject within a specified period of timeending within 60 months after the date ofthe first set-aside; or a statementexplaining why the period for paying theamount set aside should be extended andindicating the extension of timerequested. (Include in this statement thereason why the proposed project couldnot be divided into two or more projectscovering periods of no more than 60months each.)

Set-aside under item 2. For anyset-aside under 2 above, the privatefoundation must attach a schedule to itsannual information return showing howthe requirements are met. A schedule isrequired for the year of the set-aside andfor each subsequent year until theset-aside amount has been distributed.See Regulations section53.4942(a)-3(b)(7)(ii) for specificrequirements.Line 5—Reduced tax on investmentincome under section 4940(e). If theorganization does not qualify for the 1%tax under section 4940(e), enter zero. SeeParts V and VI of the instructions.

Part XIII—UndistributedIncomeIf you checked box D2 on page 1, do notfill in this part.

If the organization is a private operatingfoundation for any of the years shown inPart XIII, do not complete the portions ofPart XIII that apply to those years. If thereare excess qualifying distributions for anytax year, do not carry them over to a yearin which the organization is a privateoperating foundation or to any later year.For example, if a foundation made excessqualifying distributions in 1998 andbecame a private operating foundation in2000, the excess qualifying distributionsfrom 1998 could be applied against thedistributable amount for 1999 but not toany year after 1999.

The purpose of this part is to enable thefoundation to comply with the rules forapplying its qualifying distributions for theyear 2000. In applying the qualifyingdistributions, there are three basic steps.

1. Reduce any undistributed incomefor 1999 (but not less than zero).

2. The organization may use any partor all remaining qualifying distributions for2000 to satisfy elections. For example, ifundistributed income remained for anyyear before 1999, it could be reduced tozero or, if the foundation wished, thedistributions could be treated asdistributions out of corpus.

3. If no elections are involved, applyremaining qualifying distributions to the2000 distributable amount on line 4d. Ifthe remaining qualifying distributions aregreater than the 2000 distributableamount, the excess is treated as adistribution out of corpus on line 4e.

If for any reason the 2000 qualifyingdistributions do not reduce any 1999undistributed income to zero, the amountnot distributed is subject to a 15% tax. Ifthe 1999 income remains undistributed atthe end of 2001, it could be subject againto the 15% tax. Also, see section 4942(b)for the circumstances under which asecond-tier tax could be imposed.Line 1—Distributable amount. Enterthe distributable amount for 2000 fromPart XI, line 7.Line 2—Undistributed income. Enterthe distributable amount for 1999 andamounts for earlier years that remainedundistributed at the beginning of the 2000tax year.Line 2b. Enter the amount ofundistributed income for years before1999.Line 3—Excess distributions carryoverto 2000. If the foundation has madeexcess distributions out of corpus in prioryears, which have not been applied in anyyear, enter the amount for each year. Donot enter an amount for a particular yearif the organization was a private operatingfoundation for any later year.Lines 3a through 3e. Enter the amountof any excess distribution made on theline for each year listed. Do not includeany amount that was applied against thedistributable amount of an earlier year orthat was already used to meet


pass-through distribution requirements.(See the instructions for line 7.)Line 3f. This amount can be applied in2000.Line 4—Qualifying distributions. Enterthe total amount of qualifying distributionsmade in 2000 from Part XII, line 4. Thetotal of the amounts applied on lines 4athrough 4e is equal to the qualifyingdistributions made in 2000.Line 4a. The qualifying distributions for2000 are first used to reduce anyundistributed income remaining from1999. Enter only enough of the 2000qualifying distributions to reduce the 1999undistributed income to zero.Lines 4b and 4c. If there are any 2000qualifying distributions remaining afterreducing the 1999 undistributed incometo zero, one or more elections can bemade under Regulations section53.4942(a)-3(d)(2) to apply all or part ofthe remaining qualifying distributions toany undistributed income remaining fromyears before 1999 or to apply to corpus.

Elections. To make these elections,the organization must file a statement withthe IRS or attach a statement, asdescribed in the above regulationssection, to Form 990-PF. An electionmade by filing a separate statement withthe IRS must be made within the year forwhich the election is made. Otherwise,attach a statement to the Form 990-PFfiled for the year the election was made.

Where to enter. If the organizationelected to apply all or part of theremaining amount to the undistributedincome remaining from years before1999, enter the amount on line 4b.

If the organization elected to treat thosequalifying distributions as a distributionout of corpus, enter the amount online 4c.

CAUTION!

Entering an amount on line 4b or4c without submitting the requiredstatement is not considered a valid

election.Line 4d. Treat as a distribution of thedistributable amount for 2000 anyqualifying distributions for 2000 thatremain after reducing the 1999undistributed income to zero and afterelecting to treat any part of the remainingdistributions as a distribution out of corpusor as a distribution of a prior year'sundistributed income. Enter only enoughof the remaining 2000 qualifyingdistributions to reduce the 2000distributable amount to zero.Line 4e. Any 2000 qualifying distributionsremaining after reducing the 2000distributable amount to zero should betreated as an excess distribution out ofcorpus. This amount may be carried overand applied to later years.Line 5—Excess qualifying distributionscarryover applied to 2000. Enter anyexcess qualifying distributions from line3, which were applied to 2000, in both the

Corpus column and the 2000 column.Apply the oldest excess qualifyingdistributions first. Thus, the organizationwill apply any excess qualifyingdistributions carried forward from 1995before those from later years.Line 6a. Add lines 3f, 4c, and 4e.Subtract line 5 from the total. Enter thenet total in the Corpus column.Line 6c. Enter only the undistributedincome from 1998 and prior years forwhich either a notice of deficiency undersection 6212(a) has been mailed for thesection 4942(a) first-tier tax, or on whichthe first-tier tax has been assessedbecause the organization filed a Form4720 for a tax year that began before1999.Lines 6d and 6e. These amounts aretaxable under the provisions of section4942(a), except for any part that is duesolely to misvaluation of assets to whichthe provisions of section 4942(a)(2) arebeing applied (see Part VII-B, line 2b).Report the taxable amount on Form 4720.If the exception applies, attach anexplanation.Line 6f. In the 2000 column, enter theamount by which line 1 is more than thetotal of lines 4d and 5. This is theundistributed income for 2000. Theorganization must distribute the amountshown by the end of its 2001 tax year sothat it will not be liable for the tax onundistributed income.Line 7—Distributions out of corpus for2000 pass-through distributions.

1. If the foundation is the donee andreceives a contribution from anotherprivate foundation, the donor foundationmay treat the contribution as a qualifyingdistribution only if the donee foundationmakes a distribution equal to the fullamount of the contribution and thedistribution is a qualifying distribution thatis treated as a distribution of corpus. Thedonee foundation must, no later than theclose of the first tax year after the tax yearin which it receives the contributions,distribute an amount equal in value to thecontributions received in the prior tax yearand have no remaining undistributedincome for the prior year. For example, ifprivate foundation X received $1,000 intax year 1999 from foundation Y,foundation X would have to distribute the$1,000 as a qualifying distribution out ofcorpus by the end of 2000 and have noremaining undistributed income for 1999.

2. If a private foundation receives acontribution from an individual or acorporation and the individual is seekingthe 50% contribution base limit ondeductions for the tax year (or theindividual or corporation is not applyingthe limit imposed on deductions forcontributions to the foundation of capitalgain property), the foundation mustcomply with certain distributionrequirements.

By the 15th day of the 3rd month afterthe end of the tax year in which thefoundation received the contributions, thedonee foundation must distribute asqualifying distributions out of corpus:

a. An amount equal to 100% of allcontributions received during the year inorder for the individual contributor toreceive the benefit of the 50% limit ondeductions, and

b. Distribute all contributions ofproperty only so that the individual orcorporation making the contribution is notsubject to the section 170(e)(1)(B)(ii)limitations.

If the organization is applying excessdistributions from prior years (i.e., any partof the amount in Part XIII, line 3f) tosatisfy the distribution requirements ofsection 170(b)(1)(E) or 4942(g)(3), it mustmake the election under Regulationssection 53.4942(a)-3(c)(2). Also, seeRegulations section 1.170A-9(g)(2).

Enter on line 7 the total distributions outof corpus made to satisfy the restrictionson amounts received from donorsdescribed above.Line 8—Outdated excess distributionscarryover. Because of the 5-yearcarryover limitation under section4942(i)(2), the organization must reduceany excess distributions carryover by anyamounts from 1995 that were not appliedin 2000.Line 9—Excess distributions carryoverto 2001. Enter the amount by which line6a is more than the total of lines 7 and 8.This is the amount the organization mayapply to 2001 and following years. Line 9can never be less than zero.Line 10—Analysis of line 9. In thespace provided for each year, enter theamount of excess distributions carryoverfrom that year that has not been appliedas of the end of the 2000 tax year. If thereis an amount on the line for 1996, it mustbe applied by the end of the 2001 tax yearsince the 5-year carryover period for 1996ends in 2001.

Part XIV—Private OperatingFoundationsAll organizations that claim status asprivate operating foundations undersection 4942(j)(3) or (5) for 2000 mustcomplete Part XIV.Certain elderly care facilities (section4942(j)(5)). For purposes of section 4942only, certain elderly care facilities may beclassified as private operatingfoundations. To be so classified, theymust be operated and maintained for theprincipal purpose explained in section4942(j)(5) and also meet the endowmenttest described below.

If the foundation is a section 4942(j)(5)organization, complete only lines 1a, 1b,2c, 2d, 2e, and 3b. Enter “N/A” on allother lines in the Total column for PartXIV.


Private operating foundation (section4942(j)(3)). The term “private operatingfoundation” means any private foundationthat spends at least 85% of the smallerof its adjusted net income or its minimuminvestment return directly for the activeconduct of the exempt purpose orfunctions for which the foundation isorganized and operated (the IncomeTest ) and that also meets one of the threetests below.

1. Assets test. 65% or more of thefoundation's assets are devoted directlyto those activities or functionally relatedbusinesses, or both. Or 65% or more ofthe foundation's assets are stock of acorporation that is controlled by thefoundation, and substantially all of theassets of the corporation are devoted tothose activities or functionally relatedbusinesses.

2. Endowment test. The foundationnormally makes qualifying distributionsdirectly for the active conduct of theexempt purpose or functions for which itis organized and operated in an amountthat is two-thirds or more of its minimuminvestment return.

3. Support test. The foundationnormally receives 85% or more of itssupport (other than gross investmentincome as defined in section 509(e)) fromthe public and from five or more exemptorganizations that are not described insection 4946(a)(1)(H) with respect to eachother or the recipient foundation. Notmore than 25% of the support (other thangross investment income) normally maybe received from any one of the exemptorganizations and not more than one-halfof the support normally may be receivedfrom gross investment income.

See regulations under section 4942 forthe meaning of “directly for the activeconduct” of exempt activities for purposesof these tests.

Complying with these tests. Afoundation may meet the income testand either the assets, endowment, orsupport test by satisfying the tests forany 3 years during a 4-year periodconsisting of the tax year in question andthe 3 immediately preceding tax years. Itmay also meet the tests based on thetotal of all related amounts of income orassets held, received, or distributedduring that 4-year period. A foundationmay not use one method for satisfying theincome test and another for satisfying oneof the three alternative tests. Thus, if afoundation meets the income test on the3-out-of-4-year basis for a particular taxyear, it may not use the 4-yearaggregation method for meeting one ofthe three alternative tests for that sameyear.

In completing line 3c(3) of Part XIVunder the aggregation method, the largestamount of support from an exemptorganization will be based on the total

amount received for the 4-year periodfrom any one exempt organization.

A new private foundation must use theaggregation method to satisfy the tests forits first tax year in order to be treated asa private operating foundation from thebeginning of that year. It must continue touse the aggregation method for its 2ndand 3rd tax years to maintain its status forthose years.

Part XV—SupplementaryInformation● Complete this part only if the foundationhad assets of $5,000 or more at any timeduring the year.● This part does not apply to a foreignfoundation that during its entire period ofexistence received substantially all (85%or more) of its support (other than grossinvestment income) from sources outsidethe United States.Line 2. In the space provided (or in anattachment, if necessary), furnish therequired information about theorganization's grant, scholarship,fellowship, loan, etc., programs. Inaddition to restrictions or limitations onawards by geographical areas, charitablefields, and kinds of recipients, indicate anyspecific dollar limitations or otherrestrictions applicable to each type ofaward the organization makes. Thisinformation benefits the grant seeker andthe foundation. The grant seekers will beaware of the grant eligibility requirementsand the foundation should receive onlyapplications that adhere to these grantapplication requirements.

If the foundation only makescontributions to preselected charitableorganizations and does not acceptunsolicited applications for funds, checkthe box on line 2.Line 3. If necessary, attach a schedulefor lines 3a and 3b that lists separatelyamounts given to individuals and amountsgiven to organizations.Line 3a—Paid during year. List allcontributions, grants, etc., actually paidduring the year, including grants orcontributions that are not qualifyingdistributions under section 4942(g).Include current year payments ofset-asides treated as qualifyingdistributions in the current tax year or anyprior year.Line 3b—Approved for future payment.List all contributions, grants, etc.,approved during the year but not paid bythe end of the year, including the unpaidportion of any current year set-aside.

CAUTION!

Entries such as “grant” or“contribution” under the columntitled Purpose of grant or

contribution are unacceptable. SeeCompleted Example of Form 990-PFfound in Package 990-PF, Returns forPrivate Foundations, for examples that

describe the purpose of a grant orcontribution.

Part XVI-A—Analysis ofIncome-Producing ActivitiesIn Part XVI-A, analyze revenue items thatare also entered in Part I, column (a),lines 3–11, and on line 5b. Contributionsreported on lines 1 and 2 of Part I are notentered in Part XVI-A. For information onunrelated business income, see theInstructions for Form 990-T and Pub. 598.Columns (a) and (c). In column (a),enter a 6-digit business code, from the listin the Instructions for Form 990-T, toidentify any income reported in column(b). In column (c), enter an exclusioncode, from the list on page 29, to identifyany income reported in column (d). Ifmore than one exclusion code isapplicable to a particular revenue item,select the lowest numbered exclusioncode that applies. Also, if nontaxablerevenues from several sources arereportable on the same line in column (d),use the exclusion code that applies to thelargest revenue source.Columns (b), (d), and (e). For amountsreported in Part XVI-A on lines 1–11,enter in column (b) any income earnedthat is unrelated business income (seesection 512). In column (d), enter anyincome earned that is excluded from thecomputation of unrelated businesstaxable income by Code section 512, 513,or 514. In column (e), enter any relatedor exempt function income; that is, anyincome earned that is related to theorganization's purpose or function whichconstitutes the basis for the organization'sexemption.

Also enter in column (e) any incomespecifically excluded from gross incomeother than by Code section 512, 513, or514, such as interest on state and localbonds that is excluded from tax by section103. You must explain in Part XVI-B anyamount shown in column (e).Comparing Part XVI-A with Part I. Thesum of the amounts entered on each lineof lines 1–11 of columns (b), (d), and (e)of Part XVI-A should equal correspondingamounts entered on lines 3–11 of Part I,column (a), and on line 5b as shownbelow:

Amounts inPart XVI-Aon line . . .

Correspond toAmounts in Part I,column (a), line . . .

1a–g ...................................... 112 ............................................ 113 ............................................ 34 ............................................ 45 and 6.................................. 5b (description

column)7 ............................................ 118 ............................................ 69 ............................................ 11 minus any special

event expensesincluded on lines 13through 23 of Part I,column (a)

10 .......................................... 10c11a–e .................................... 11


Line 1—Program service revenue. Onlines 1a–g, list each revenue-producingprogram service activity of theorganization. For each program serviceactivity listed, enter the gross revenueearned for each activity, as well asidentifying business and exclusion codes,in the appropriate columns. For line 1g,enter amounts that are payments forservices rendered to governmental units.Do not include governmental grants thatare reportable on line 1 of Part I. Reportthe total of lines 1a–g on line 11 of PartI, along with any other income reportableon line 11.

Program services are mainly thoseactivities that the reporting organizationwas created to conduct and that, alongwith any activities begun later, form thebasis of the organization's currentexemption from tax.

Program services can also include theorganization's unrelated trade or businessactivities. Program service revenue alsoincludes income from program-relatedinvestments (such as interest earned onscholarship loans) as defined in theinstructions for Part IX-B.Line 11. On lines 11a–e, list each “Otherrevenue” activity not reported on lines 1through 10. Report the sum of theamounts entered for lines 11a–e, columns(b), (d), and (e), on line 11, Part I.Line 13. On line 13, enter the total ofcolumns (b), (d), and (e) of line 12.

You may use the following worksheetto verify your calculations.

Part XVI-B—Relationship ofActivities to theAccomplishment of ExemptPurposesTo explain how each amount in column(e) of Part XVI-A was related or exemptfunction income, show the line number ofthe amount in column (e) and give a briefdescription of how each activity reportedin column (e) contributed importantly tothe accomplishment of the organization'sexempt purposes (other than by providingfunds for such purposes). Activities thatgenerate exempt-function income areactivities that form the basis of theorganization's exemption from tax.

Also, explain any income entered incolumn (e) that is specifically excludedfrom gross income other than by Codesection 512, 513, or 514. If no amount isentered in column (e), do not completePart XVI-B.

Example. M, a performing artsassociation, is primarily supported byendowment funds. It raises revenue bycharging admissions to its performances.These performances are the primarymeans by which the organizationaccomplishes its cultural and educationalpurposes.

M reported admissions income incolumn (e) of Part XVI-A and explained inPart XVI-B that these performances arethe primary means by which itaccomplishes its cultural and educationalpurposes.

Because M also reported interest fromstate bonds in column (e) of Part XVI-A,M explained in Part XVI-B that suchinterest was excluded from gross incomeby Code section 103.

Part XVII—InformationRegarding Transfers To andTransactions andRelationships WithNoncharitable ExemptOrganizationsPart XVII is used to report direct andindirect transfers to (line 1a) and directand indirect transactions with (line 1b) andrelationships with (line 2) any othernoncharitable exempt organization. A“noncharitable exempt organization” isan organization exempt under section501(c) (that is not exempt under section501(c)(3)), or a political organizationdescribed in section 527.

For purposes of these instructions, thesection 501(c)(3) organization completingPart XVII is referred to as the “reportingorganization.”

A noncharitable exempt organization is“related to or affiliated with” the reportingorganization if either:

1. The two organizations share someelement of common control or

2. A historic and continuingrelationship exists between the twoorganizations.

A noncharitable exempt organization isunrelated to the reporting organization if:

1. The two organizations share noelement of common control and

2. A historic and continuingrelationship does not exist between thetwo organizations.

An “element of common control” ispresent when one or more of the officers,directors, or trustees of one organizationare elected or appointed by the officers,directors, trustees, or members of theother. An element of common control isalso present when more than 25% of the

officers, directors, or trustees of oneorganization serve as officers, directors,or trustees of the other organization.

A “historic and continuing relationship”exists when two organizations participatein a joint effort to achieve one or morecommon purposes on a continuous orrecurring basis rather than on the basisof one or more isolated transactions oractivities. Such a relationship also existswhen two organizations share facilities,equipment, or paid personnel during theyear, regardless of the length of time thearrangement is in effect.Line 1—Reporting of certain transfersand transactions. Generally, report online 1 any transfer to or transaction witha noncharitable exempt organization evenif the transfer or transaction constitutesthe only connection with the noncharitableexempt organization.

Related organizations. If thenoncharitable exempt organization isrelated to or affiliated with the reportingorganization, report all direct and indirecttransfers and transactions except forcontributions and grants it received.

Unrelated organizations. All transfersto an unrelated noncharitable exemptorganization must be reported on line 1a.All transactions between the reportingorganization and an unrelatednoncharitable exempt organization mustbe shown on line 1b unless they meet theexception in the specific instructions forline 1b.Line 1a—Transfers. Answer “Yes” tolines 1a(1) and 1a(2) if the reportingorganization made any direct or indirecttransfers of any value to a noncharitableexempt organization.

A “transfer” is any transaction orarrangement whereby one organizationtransfers something of value (cash, otherassets, services, use of property, etc.) toanother organization without receivingsomething of more than nominal value inreturn. Contributions, gifts, and grants areexamples of transfers.

If the only transfers between the twoorganizations were contributions andgrants made by the noncharitable exemptorganization to the reporting organization,answer “No.”Line 1b—Other transactions. Answer“Yes” for any transaction described on line1b(1)–(6), regardless of its amount, if it iswith a related or affiliated organization.

Unrelated organizations. Answer“Yes” for any transaction between thereporting organization and an unrelatednoncharitable exempt organization,regardless of its amount, if the reportingorganization received less than adequateconsideration. There is adequateconsideration when the fair market valueof the goods and other assets or servicesfurnished by the reporting organization isnot more than the fair market value of thegoods and other assets or servicesreceived from the unrelated noncharitable

Line 13, Part XVI-A.............................

Minus: Line 5b, Part I .......................Note: If line 5b, Part I,reflects a loss, add thatamount here instead ofsubtracting.

Plus: Line 1, Part I .........................

Plus: Line 5a, Part I .......................

Plus: Expenses of special eventsdeducted in computing line 9of Part XVI-A.........................

Equal: Line 12, column (a), of Part I.


exempt organization. The exceptiondescribed below does not apply totransactions for less than adequateconsideration.

Answer “Yes” for any transactionbetween the reporting organization andan unrelated noncharitable exemptorganization if the “amount involved” ismore than $500. The “amount involved”is the fair market value of the goods,services, or other assets furnished by thereporting organization.

Exception. If a transaction with anunrelated noncharitable exemptorganization was for adequateconsideration and the amount involvedwas $500 or less, answer “No” for thattransaction.Line 1b(3). Answer “Yes” for transactionsin which the reporting organization waseither the lessor or the lessee.Line 1b(4). Answer “Yes” if eitherorganization reimbursed expensesincurred by the other.Line 1b(5). Answer “Yes” if eitherorganization made loans to the other or ifthe reporting organization guaranteed theother's loans.Line 1b(6). Answer “Yes” if eitherorganization performed services ormembership or fundraising solicitationsfor the other.Line 1c. Complete line 1c regardless ofwhether the noncharitable exemptorganization is related to or closelyaffiliated with the reporting organization.For purposes of this line, “facilities”includes office space and any other land,building, or structure whether owned orleased by, or provided free of charge to,the reporting organization or thenoncharitable exempt organization.Line 1d. Use this schedule to describethe transfers and transactions for which“Yes” was entered on lines 1a–c above.You must describe each transfer ortransaction for which the answer was“Yes.” You may combine all of the cashtransfers (line 1a(1)) to each organizationinto a single entry. Otherwise, make aseparate entry for each transfer ortransaction.

Column (a). For each entry, enter theline number from line 1a–c. For example,if the answer was “Yes” to line 1b(3),enter “b(3)” in column (a).

Column (d). If you need more space,write “see attached” in column (d) and usean attached sheet for the description. Ifmaking more than one entry on line 1d,

specify on the attached sheet whichtransfer or transaction you are describing.Line 2—Reporting of certainrelationships. Enter on line 2 eachnoncharitable exempt organization thatthe reporting organization is related to oraffiliated with, as defined above. If thecontrol factor or the historic andcontinuing relationship factor (or both) ispresent at any time during the year,identify the organization on line 2 even ifneither factor is present at the end of theyear.

Do not enter unrelated noncharitableexempt organizations on line 2 even iftransfers to or transactions with thoseorganizations were entered on line 1. Forexample, if a one-time transfer to anunrelated noncharitable exemptorganization was entered on line 1a(2),do not enter the organization on line 2.

Column (b). Enter the exemptcategory of the organization; for example,“501(c)(4).”

Column (c). In most cases, a simpledescription, such as “common directors”or “auxiliary of reporting organization” willbe sufficient. If you need more space,write “see attached” in column (c) and usean attached sheet to describe therelationship. If you are entering more thanone organization on line 2, identify whichorganization you are describing on theattached sheet.

SignatureThe return must be signed by thepresident, vice president, treasurer,assistant treasurer, chief accountingofficer, or other corporate officer (such astax officer) who is authorized to sign. Areceiver, trustee, or assignee must signany return that he or she is required to filefor a corporation. If the return is filed fora trust, it must be signed by theauthorized trustee or trustees. Sign anddate the form and fill in the signer's title.

If an officer or employee of theorganization prepares the return, the PaidPreparer's space should remain blank. Ifsomeone prepares the return withoutcharge, that person should not sign thereturn.

Generally, anyone who is paid toprepare the organization's tax return mustsign the return and fill in the PaidPreparer's Use Only area.

If you have questions about whether apreparer is required to sign the return,please contact an IRS office.

The paid preparer must complete therequired preparer information and:● Sign it, by hand, in the space providedfor the preparer's signature. (Signaturestamps and labels are not acceptable.)● Give the organization a copy of thereturn in addition to the copy to be filedwith the IRS.

If the box for question 13 of Part VII-Ais checked (section 4947(a)(1) nonexemptcharitable trust filing Form 990-PF insteadof Form 1041), the paid preparer mustalso enter his or her social securitynumber or, if applicable, employeridentification number in the spacesprovided. Otherwise, do not enter thepreparer's social security or employeridentification number.

Paperwork Reduction Act NoticeWe ask for the information on this form tocarry out the Internal Revenue laws of theUnited States. You are required to giveus the information. We need it to ensurethat you are complying with these lawsand to allow us to figure and collect theright amount of tax.

You are not required to provide theinformation requested on a form that issubject to the Paperwork Reduction Actunless the form displays a valid OMBcontrol number. Books or records relatingto a form or its instructions must beretained as long as their contents maybecome material in the administration ofany Internal Revenue law.

The time needed to complete and filethis form will vary depending on individualcircumstances. The estimated averagetime is:

If you have comments concerning theaccuracy of these time estimates orsuggestions for making this form simpler,we would be happy to hear from you. Youcan write to the Tax Forms Committee,Western Area Distribution Center, RanchoCordova, CA 95743-0001. Do not sendthe tax form to this address. Instead, seeWhen and Where To File on page 5.

Recordkeeping ................ 140 hr., 37 min.

Learning about the lawor the form ...................... 27 hr., 40 min.

Preparing the form ......... 32 hr., 7 min.

Copying, assembling,and sending the form tothe IRS ............................. 16 min.


Exclusion Codes

Real property rental income that does notdepend on the income or profits derivedby the person leasing the property and isexcluded by section 512 (b)(3)

16—

General Exceptions Debt-Financed IncomeIncome exempt from debt-financed(section 514) provisions because at least85% of the use of the property is for theorganization’s exempt purposes. (Note:This code is only for income from the15% or less non-exempt purpose use.)(section 514(b)(1)(A))

Income from an activity that is notregularly carried on (section 512(a)(1))

01— 30—

Income from an activity in which labor isa material income-producing factor andsubstantially all (at least 85%) of the workis performed with unpaid labor (section513(a)(1))

02—

17— Rent from personal property leased withreal property and incidental (10% or less)in relation to the combined income fromthe real and personal property (section512(b)(3))

Gross income from mortgaged propertyused in research activities described insection 512(b)(7), (8), or (9) (section514(b)(1)(C))

31—Section 501(c)(3) organization— Incomefrom an activity carried on primarily forthe convenience of the organization’smembers, students, patients, visitors,officers, or employees (hospital parkinglot or museum cafeteria, for example)(section 513(a)(2))

03—

18— Gain or loss from the sale of investmentsand other non-inventory property andfrom certain property acquired fromfinancial institutions that are inconservatorship or receivership (sections512(b)(5) and (16)(A))

19— Gain or loss from the lapse or terminationof options to buy or sell securities or realproperty, and on options and from theforfeiture of good-faith deposits for thepurchase, sale, or lease of investmentreal estate (section 512(b)(5))

Gross income from mortgaged propertyused in any activity described in section513(a)(1), (2), or (3) (section 514(b)(1)(D))

32—

20— Income from research for the UnitedStates; its agencies or instrumentalities;or any state or political subdivision(section 512(b)(7))

Section 501(c)(4) local association ofemployees organized before May 27,1969— Income from the sale ofwork-related clothes or equipment anditems normally sold through vendingmachines; food dispensing facilities; orsnack bars for the convenience ofassociation members at their usual placesof employment (section 513(a)(2))

04— Income from mortgaged property(neighborhood land) acquired for exemptpurpose use within 10 years (section514(b)(3))

33—

21— Income from research conducted by acollege, university, or hospital (section512(b)(8))

Income from mortgaged propertyacquired by bequest or devise (applies toincome received within 10 years from thedate of acquisition) (section 514(c)(2)(B))

34—

22— Income from research conducted by anorganization whose primary activity isconducting fundamental research, theresults of which are freely available to thegeneral public (section 512(b)(9))

Income from the sale of merchandise,substantially all of which (at least 85%)was donated to the organization (section513(a)(3))

05— Income from mortgaged propertyacquired by gift where the mortgage wasplaced on the property more than 5 yearspreviously and the property was held bythe donor for more than 5 years (appliesto income received within 10 years fromthe date of gift (section 514(c)(2)(B))

35—

23— Income from services provided underlicense issued by a federal regulatoryagency and conducted by a religiousorder or school operated by a religiousorder, but only if the trade or businesshas been carried on by the organizationsince before May 27, 1959 (section 512(b)(15))

Specific ExceptionsSection 501(c)(3), (4), or (5) organizationconducting an agricultural or educationalfair or exposition— Qualified publicentertainment activity income (section513(d)(2))

06— Income from property received in returnfor the obligation to pay an annuitydescribed in section 514(c)(5)

36—

Income from mortgaged property thatprovides housing to low and moderateincome persons, to the extent themortgage is insured by the FederalHousing Administration (section 514(c)(6)).(Note: In many cases, this would beexempt function income reportable incolumn (e). It would not be so in the caseof a section 501(c)(5) or (6) organization,for example, that acquired the housing asan investment or as a charitable activity.)

37—

Foreign Organizations

Section 501(c)(3), (4), (5), or (6)organization—Qualified convention andtrade show activity income (section513(d)(3))

07—

Foreign organizations only—Income froma trade or business NOT conducted in theUnited States and NOT derived fromUnited States sources (patrons) (section512(a)(2))

24—Income from hospital services describedin section 513(e)

08—

Income from noncommercial bingo gamesthat do not violate state or local law(section 513(f))

09—

Social Clubs and VEBAsSection 501(c)(7), (9), or (17)organization—Non-exempt functionincome set aside for a charitable, etc.,purpose specified in section 170(c)(4)(section 512(a)(3)(B)(i))

25—

Income from games of chance conductedby an organization in North Dakota(section 311 of the Deficit Reduction Actof 1984, as amended)

10— Income from mortgaged real propertyowned by: a school described in section170(b)(1)(A)(ii); a section 509(a)(3) affiliatedsupport organization of such a school; asection 501(c)(25) organization; or by apartnership in which any of the aboveorganizations owns an interest if therequirements of section 514(c)(9)(B)(vi) aremet (section 514(c)(9))

38—

Section 501(c)(7), (9), or (17)organization—Proceeds from the sale ofexempt function property that was or willbe timely reinvested in similar property(section 512(a)(3)(D))

26—

Section 501(c)(12) organization—Qualified pole rental income (section513(g))

11—

Income from the distribution of low-costarticles in connection with the solicitationof charitable contributions (section 513(h))

12—

Section 501(c)(9) or (17) organization—Non-exempt function income set aside forthe payment of life, sick, accident, orother benefits (section 512(a)(3)(B)(ii))

27—

Special RulesIncome from the exchange or rental ofmembership or donor list with anorganization eligible to receive charitablecontributions by a section 501(c)(3)organization; by a war veterans’organization; or an auxiliary unit or societyof, or trust or foundation for, a warveterans’ post or organization (section513(h))

13—Section 501(c)(5) organization—Farmincome used to finance the operation andmaintenance of a retirement home,hospital, or similar facility operated by theorganization for its members on propertyadjacent to the farm land (section1951(b)(8)(B) of Public Law 94-455)

39—

Veterans’ OrganizationsSection 501(c)(19) organization—Payments for life, sick, accident, or healthinsurance for members or theirdependents that are set aside for thepayment of such insurance benefits or fora charitable, etc., purpose specified insection 170(c)(4) (section 512(a)(4))

28—

Trade or Business41— Gross income from an unrelated activity

that is regularly carried on but, in light ofcontinuous losses sustained over anumber of tax periods, cannot beregarded as being conducted with themotive to make a profit (not a trade orbusiness)

Modifications and ExclusionsDividends, interest, payments withrespect to securities loans, annuities,income from notional principal contracts,other substantially similar income fromordinary and routine investments, andloan commitment fees, excluded bysection 512(b)(1)

14—

Section 501(c)(19) organization— Incomefrom an insurance set-aside (see code 28above) that is set aside for payment ofinsurance benefits or for a charitable,etc., purpose specified in section170(c)(4) (Regs. 1.512(a)–4(b)(2))

29—

Royalty income excluded by section512(b)(2)

15—

Annual dues, not exceeding $112 (subjectto inflation), paid to a section 501(c)(5)agricultural or horticultural organization(section 512(d))

40—


Index

A Accounting methods ........................... 5 Accounting period ............................... 5

Adjusted net income ......................... 11 Amended return .................................. 5

Amended returns, state ...................... 4Annual return .......................... 2, 4, 5, 9

Amended ........................................ 5Copies to state officials .................. 4Extension for filing .......................... 5Failure to file timely or completely . 5Purpose of form .............................. 2State reporting requirements .......... 4

Termination ..................................... 9When to file .................................... 5Where to file ................................... 5Which parts to complete ................ 2 Assets test ........................................ 26 Attachments ...................................... 10

B Business meals ................................ 14

CCapital gains and losses ............ 17, 18

Basis ............................................. 18 Gains ............................................ 17 Losses .......................................... 18

Charitable donation: Substantiation of ........................... 12

Contributions .................................... 14Copy of old return .............................. 5

Currency ........................................... 10

D Definitions:

Disqualified person ......................... 3 Distributable amount .................... 23 Foundation manager ...................... 3

Gross investment income ............. 11Net investment income ................. 11Noncharitable exempt organization 27Nonexempt charitable trust ............ 2Nonoperating private foundation .... 3

Private foundation .......................... 2Private operating foundation .......... 2

Program-related investment ......... 22 Qualifying distributions ................. 24 Significant disposition ..................... 9 Substantial contraction ................... 9

Taxable private foundation ............. 2 Depository methods ........................... 6

Electronic deposit ........................... 6Tax deposit coupon ........................ 6 Depreciation ..................................... 14 Disqualified person ............................. 3 Disregarded entity ........................ 2, 20 Dissolution .......................................... 9

Distributable amount ........................ 23

E EFTPS ................................................ 6

Elections ............................... 18, 24, 25 Electronic deposit ............................... 6 Endowment test ................................ 26 Estimated tax ...................................... 6

Penalty ............................................ 6Estimated tax penalty ......................... 6Excise tax based on investment

income .......................................... 18Domestic exempt private

foundations ............................... 18Domestic taxable private

foundations and section4947(a)(1) nonexempt charitabletrusts ......................................... 18 Foreign organizations ................... 18

Exempt operating foundationqualification ................................... 18

Extension for filing .............................. 5

FFailure to file timely or completely ..... 5Failure to pay tax when due .............. 5Federal tax deposit coupon ................ 6

Filing extension .................................. 5Foreign organizations ............. 9, 10, 18

Foundation manager .......................... 3

G Gifts .................................................. 14 Grants ............................................... 14

Gross investment income ................. 11 Gross profit ....................................... 13 Gross receipts .................................... 5

I Income test ....................................... 26 Incomplete return:How to avoid .................................. 2

Penalties ......................................... 5 Inventory ........................................... 13

L Large organization .............................. 5 Liquidation .......................................... 9

MMinimum investment return ........ 22, 23

Short tax year ............................... 23

NNet investment income ......... 11, 14, 15

Business meals ............................ 14Noncharitable exempt organization .. 27

Nonexempt charitable trust ...... 2, 6, 20 Nonoperating privatefoundation ........................... 3, 11, 13

O Other expenses ................................ 14

P Penalties:Against responsible person ............ 5

Estimated tax .................................. 6Failure to disclose quid pro quo

contributions ............................. 12Failure to file timely or completely . 5Failure to pay timely ....................... 5 Private foundation .............................. 2

Private operating foundation .. 2, 11, 26 Program services ............................. 27

Program-related investment . 18, 22, 24 Public inspection .......................... 9, 20

Relief .............................................. 9

QQualifying distributions ......... 12, 13, 24

Amounts set aside ........................ 24

R Rounding .......................................... 10

S Self-dealing ....................................... 20

SFAS 116 ......................... 5, 12, 15, 17 SFAS 117 ......................................... 17 Signature .......................................... 28 Significant disposition ......................... 9 Significant involvement ..................... 21

Special payment option ...................... 6State reporting requirements .............. 4

Amended returns ............................ 4 Substantial contraction ....................... 9 Support test ...................................... 26

TTax payment methods:

Depository method ......................... 6Special payment option .................. 6

Taxable private foundation ............. 2, 6 Termination ................................... 9, 10

Annual return .................................. 9 Special rules ................................. 10

Travel ................................................ 14

WWhen to file ........................................ 5

Extension ........................................ 5Where to file ....................................... 5Which parts to complete .................... 2Who must file ..................................... 2


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