IRS Logo
Print - Click this link to Print this page

Application of Rules Relating to Termination of Private Foundation Status

The termination rules do not apply to a charitable or split-interest trust that either (1) pays a beneficiary an amount that is directed by the terms of the governing instrument of the trust and is not discretionary with the trustee or, (2) for a discretionary payment, because of, or after, the last remaining charitable interest in the trust expires.

Example. H creates a nonexempt charitable trust under which the income will be paid for 15 years to R, a section 501(c)(3) organization.  After 15 years, the trust will terminate and distribute all its assets to S, another section 501(c)(3) organization.  Distribution of the corpus of the trust to S will not be subject to the rules governing termination of private foundation status.


  Return to Life Cycle of a Private Foundation
Page Last Reviewed or Updated: 30-Apr-2013