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Disqualified Persons

For the rules relating to private foundation excise taxes, the following persons are considered disqualified persons with respect to a private foundation:

  1. All substantial contributors to the founda­tion,
  2. All foundation managers of the foundation,
  3. An owner of more than 20 percent of--
    a. The total combined voting power of a corporation,
    b. The profits interest of a partnership, or
    c. The beneficial interest of a trust or unin­corporated enterprise, which is, during the ownership) a substantial contributor to the foundation,
  4. A member of the family of any of the individuals described in (1), (2), or (3),
  5. A corporation of which more than 35 percent of the total combined voting power is owned by persons described in (1), (2), (3), or (4),
  6. A partnership of which more than 35 percent of the profits interest is owned by persons described in( 1), (2), (3), or (4),
  7. A trust, estate, or unincorporated enter­prise of which more than 35 percent of the bene­ficial interest is owned by persons described in (1), (2), (3), or (4),
  8. For purposes of the tax on excess business holdings only, another
    private foundation that either--
    a. is effectively controlled, directly or indi­rectly, by the same person or persons who control the private foundation in question, or
    b. receives substantially all of its contribu­tions, directly or indirectly, from the same persons described in (1), (2), or (3), or members of their families, who made, directly or indirectly, substantially all the contributions to the private foun­dation in question, and
  9. For purposes of the tax on self-dealing only, a government offi­cial.

Indirect owner­ship of stock in a corporation, profits interest in a partnership, or beneficial interest in a trust, es­tate, or unincorporated enterprise is taken into account for determining whether:

  1. The stockholdings, or profits or beneficial interest, amount to more than 20 percent of the total combined voting power of the corpo­ration or more than 20 percent of the profits or beneficial interests, or
  2. More than 35 percent of the total combined vot­ing power of the corporation or more than 35 percent of the profits or beneficial interests are owned by persons described in cate­gories (1), (2), (3), or (4).

See Attribution of ownership for more information on indirect ownership rules.


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Page Last Reviewed or Updated: 29-Apr-2013