Instructions for Form 990-PF (2007)

IRS Resources

Specific Instructions

Table of Contents

Completing the Heading

The following instructions are keyed to items in the Form 990-PF heading.

Name and Address

If the organization operates under a name different from its legal name, give the legal name of the organization but identify its alternate name, after the legal name, by writing “aka”(also known as) and the alternate name of the organization. The address used must be that of the principal office of the foundation.

Include the suite, room, or other unit number after the street address. If the post office does not deliver mail to the street address and the organization has a P.O. box, show the box number instead of the street address.

A—Employer Identification Number

The organization should have only one employer identification number. If it has more than one number, notify the Internal Revenue Service Center at the address shown under General Instruction J. Explain what numbers the organization has, the name and address to which each number was assigned, and the address of the organization's principal office. The IRS will then advise which number to use.

B—Telephone Number

Enter a foundation telephone number (including the area code) that the public and government regulators may use to obtain information about the foundation's finances and activities. This information should be available at this telephone number during normal business hours. If the foundation does not have a telephone, enter a telephone number of a foundation official who can provide this information during normal business hours.

D2—Foreign Organizations

If the foreign organization meets the 85% test of Regulations section 53.4948-1(b), then:

Check the box in D2 on page 1 of Form 990-PF,
Check the box at the top of Part XI,
Do not fill in Parts XI and XIII,
Do not fill in Part X unless it is claiming status as a private operating foundation, and
Attach the computation of the 85% test to Form 990-PF.

E—Section 507(b)(1)(A) Terminations

A private foundation that has terminated its status as such under section 507(b)(1)(A), by distributing all its net assets to one or more public charities without keeping any right, title, or interest in those assets, should check the box in E on page 1 of Form 990-PF. See General Instructions Q and T.

F—60-Month Termination Under Section 507(b)(1)(B)

Check the box in F on page 1 of Form 990-PF if the organization is terminating its private foundation status under the 60-month provisions of section 507(b)(1)(B) during the period covered by this return. To begin such a termination, a private foundation must have given advance notice to TE/GE at the Cincinnati address given on page 10 and provided the information outlined in Regulations section 1.507-2(b)(3). See General Instruction U for information regarding filing requirements during a section 507(b)(1)(B) termination.

See General Instruction V for information regarding payment of the tax based on investment income (computed in Part VI) during a section 507(b)(1)(B) termination.

H—Type of Organization

Check the box for “Section 501(c)(3) exempt private foundation” if the foundation has a ruling or determination letter from the IRS in effect that recognizes its exemption from federal income tax as an organization described in section 501(c)(3) or if the organization's exemption application is pending with the IRS.

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

I—Fair Market Value of All Assets

In block I on page 1 of Form 990-PF, enter the fair market value of all assets the foundation held at the end of the tax year.

This amount should be the same as the figure reported in Part II, column (c), line 16.

Part I—Analysis of Revenue and Expenses

Column Instructions

The total of amounts in columns (b), (c), and (d) may not necessarily equal the amounts in column (a).

The amounts entered in column (a) and on line 5b must be analyzed in Part XVI-A.

Column (a)—Revenue and Expenses per Books

Enter in column (a) all items of revenue and expense shown in the books and records that increased or decreased the net assets of the organization. However, do not include the value of services donated to the foundation, or items such as the free use of equipment or facilities, in contributions received. Also, do not include any expenses used to compute capital gains and losses on lines 6, 7, and 8 or expenses included in cost of goods sold on line 10b.

Column (b)— Net Investment Income

All domestic private foundations (including section 4947(a)(1) nonexempt charitable trusts) are required to pay an excise tax each tax year on net investment income.

Exempt foreign foundations are subject to an excise tax on gross investment income from U.S. sources. These foreign organizations should complete lines 3, 4, 5, 11, 12, and 27b of column (b) and report only income derived from U.S. sources. No other income should be included. No expenses are allowed as deductions.

Definitions

Gross investment income. Gross investment income is the total amount of investment income that was received by a private foundation from all sources. However, it does not include any income subject to the unrelated business income tax. It includes interest, dividends, rents, payments with respect to securities loans (as defined in section 512(a)(5)), royalties received from assets devoted to charitable activities, income from notional principal contracts (as defined in Regulations section 1.863-7), annuities, substantially similar income from ordinary and routine investments, and income from similar sources. Therefore, interest received on a student loan is includible in the gross investment income of a private foundation making the loan.

Net investment income. Net investment income is the amount by which the sum of gross investment income and the capital gain net income exceeds the allowable deductions discussed later. Tax-exempt interest on governmental obligations and related expenses 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) any income and related expenses reported on Form 990-T.

For example, investment income from debt-financed property unrelated to the organization's charitable purpose and certain rents (and related expenses) treated as unrelated trade or business income should be reported on Form 990-T. Income from debt-financed property that is not taxed under section 511 is taxed under section 4940. Thus, if the debt/basis percentage of a debt-financed property is 80%, only 80% of the gross income (and expenses) for that property is used to figure the section 511 tax on Form 990-T. The remaining 20% of the gross income (and expenses) of that property is used to figure the section 4940 tax on net investment income on Form 990-PF. (See Form 990-T and its instructions for more information.)

Investment expenses. Include in column (b) all ordinary and necessary expenses paid or incurred to produce or collect investment income from: interest, dividends, rents, amounts received from payments on securities loans (as defined in section 512(a)(5)), royalties, income from notional principal contracts, annuities, substantially similar income from ordinary and routine investments, and income from similar sources; or for the management, conservation, or maintenance of property held for the production of income that is taxable under section 4940.

If any of the expenses listed in column (a) are paid or incurred for both investment and charitable purposes, they must be allocated on a reasonable basis between the investment activities and the charitable activities so that only expenses from investment activities appear in column (b). Examples of allocation methods are given in the instructions for Part IX-A.

Limitation. The deduction for expenses paid or incurred in any tax year for producing gross investment income earned incident to a charitable function cannot be more than the amount of income earned from the function that is includible as gross investment income for the year.

For example, if rental income is incidentally realized in 2007 from historic buildings held open to the public, deductions for amounts paid or incurred in 2007 for the production of this income may not be more than the amount of rental income includible as gross investment income in column (b) for 2007.

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

Column (c)—Adjusted Net Income

Nonoperating private foundations should see item 1 under Nonoperating private foundations, later, to find out if they need to complete column (c).

Private operating foundations. All organizations that claim status as private operating foundations under section 4942(j)(3) or (5) must complete all lines of column (c) that apply, according to the general rules for income and expenses that apply to this column, the specific line instructions for lines 3-27c, the Special rule, and Examples 1 and 2 below.

General rules. In general, adjusted net income is the amount of a private foundation's gross income that is more than the expenses of earning the income. The modifications and exclusions explained below are applied to gross income and expenses in figuring adjusted net income.

For income and expenses, include on each line of column (c) only that portion of the amount from column (a) that is applicable to the adjusted net income computation.

Income. For column (c), include income from charitable functions, investment activities, short-term capital gains from investments, amounts set aside, and unrelated trade or business activities. Do not include gifts, grants, or contributions, or long-term capital gains or losses.

Expenses. Deductible expenses include the part of a private foundation's operating expenses that is paid or incurred to produce or collect gross income reported on lines 3-11 of column (c). If only part of the property produces income includible in column (c), deductions such as interest, taxes, and rent must be divided between the charitable and noncharitable uses of the property. If the deductions for property used for a charitable, educational, or other similar purpose are more than the income from the property, the excess will not be allowed as a deduction but may be treated as a qualifying distribution in Part I, column (d). See Examples 1 and 2 below.

Special rule. The expenses attributable to each specific charitable activity, limited by the amount of income from the activity, must be reported in column (c) on lines 13-26. If the expenses of any charitable activity exceed the income generated by that activity, only the excess of these expenses over the income should be reported in column (d).

Examples.

A charitable activity generated $5,000 of income and $4,000 of expenses. Report all of the income and expenses in column (c) and none in column (d).
A charitable activity generated $5,000 of income and $6,000 of expenses. Report $5,000 of income and $5,000 of expenses in column (c) and the excess expenses of $1,000 in column (d).

Nonoperating private foundations. The following rules apply to nonoperating private foundations.

If a nonoperating private foundation has no income from charitable activities that would be reportable on line 10 or line 11 of Part I, it does not have to make any entries in column (c).
If a nonoperating private foundation has income from charitable activities, it must report that income only on lines 10 and/or 11 in column (c). These foundations do not need to report other kinds of income and expenses (such as investment income and expenses) in column (c).
If a nonoperating private foundation has income that it reports on lines 10 and/or 11, report any expenses relating to this income following the general rules and the special rule. See Examples 1 and 2 above.

Column (d)—Disbursements for Charitable Purposes

Expenses entered in column (d) relate to activities that constitute the charitable purpose of the foundation.

For amounts entered in column (d):

Use the cash receipts and disbursements method of accounting no matter what accounting method is used in keeping the books of the foundation;
Do not include any amount or part of an amount that is included in column (b) or (c);
Include on lines 13-25 all expenses, including necessary and reasonable administrative expenses, paid by the foundation for religious, charitable, scientific, literary, educational, or other public purposes, or for the prevention of cruelty to children or animals;
Include a distribution of property at the fair market value on the date the distribution was made; and
Include only the part entered in column (a) that is allocable to the charitable purposes of the foundation.

Example. An educational seminar produced $1,000 in income that was reportable in columns (a) and (c). Expenses attributable to this charitable activity were $1,900. Only $1,000 of expense should be reported in column (c) and the remaining $900 in expense should be reported in column (d).

Qualifying distributions. Generally, gifts and grants to organizations described in section 501(c)(3), that have been determined to be publicly supported charities (for example, organizations that are not private foundations as defined in section 509(a)), are qualifying distributions only if the granting foundation does not control the public charity.

The total of the expenses and disbursements on line 26 is also entered on line 1a in Part XII to figure qualifying distributions.

Alternative to completing lines 13-25. If you want to provide an analysis of disbursements that is more detailed than column (d), you may attach a schedule instead of completing lines 13-25. The schedule must include all the specific items of lines 13-25, and the total from the schedule must be entered in column (d), line 26.

Line Instructions

Line 1—Contributions, gifts, grants, etc., received. Enter the total of gross contributions, gifts, grants, and similar amounts received.

Schedule B (Form 990, 990-EZ, or 990-PF). If money, securities, or other property valued at $5,000 or more was received directly or indirectly from any one person during the year, complete Schedule B and attach it to the return. If the foundation is not required to complete Schedule B (no person contributed $5,000 or more), be sure to check the box on line 2.

To determine whether a person has contributed $5,000 or more, total only gifts of $1,000 or more from each person. Separate and independent gifts need not be totaled if less than $1,000. If a contribution is in the form of property, describe the property and include its fair market value.

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

Split-interest trusts. Distributions from split-interest trusts should be entered on line 1 of column (a). They are a part of the amount on line 1.

Substantiation requirements. An organization must keep records, required by the regulations under section 170, for all its charitable contributions.

Generally, a donor making a charitable contribution of $250 or more will not be allowed a federal income tax deduction unless the donor obtains a written acknowledgment from the donee organization by the earlier of the date on which the donor files a tax return for the tax year in which the contribution was made or the due date, including extensions, for filing that return. However, see section 170(f)(8)(D) and Regulations section 1.170A-13(f) for exceptions to this rule.

The written acknowledgment the foundation provides to the donor must show:

The amount of cash contributed,
A description of any property contributed,
Whether the foundation provided any goods or services to the donor, and
A description and a good-faith estimate of the value of any goods or services the foundation gave in return for the contribution, unless:
1. The goods and services have insubstantial value, or
2. A statement is included that these goods and services consist solely of intangible religious benefits.

Generally, if a charitable organization solicits or receives a contribution of more than $75 for which it gives the donor something in return (a quid pro quo contribution), the organization must inform the donor, by written statement, that the amount of the contribution deductible for federal income tax purposes is limited to the amount by which the contribution exceeds the value of the goods or services received by the donor. The written statement must also provide the donor with a good-faith estimate of the value of goods or services given in return for the contribution.

Penalties. An organization that does not make the required disclosure for each quid pro quo contribution will incur a penalty of $10 for each failure, not to exceed $5,000 for a particular fundraising event or mailing, unless it can show reasonable cause for not providing the disclosure.

For more information. See Regulations section 1.170A-13 for more information on charitable recordkeeping and substantiation requirements.

Line 2. Check this box if the foundation is not required to attach Schedule B.

Line 3—Interest on savings and temporary cash investments.

In column (a). Enter the total amount of interest income from investments of the type reportable in Balance Sheets, Part II, line 2. These include savings or other interest-bearing accounts and temporary cash investments, such as money market funds, commercial paper, certificates of deposit, and U.S. Treasury bills or other government obligations that mature in less than 1 year.

In column (b). Enter the amount of interest income shown in column (a). Do not include interest on tax-exempt government obligations.

In column (c). Enter the amount of interest income shown in column (a). Include interest on tax-exempt government obligations.

Line 4—Dividends and interest from securities.

In column (a). Enter the amount of dividend and interest income from securities (stocks and bonds) of the type reportable in Balance Sheets, Part II, line 10. Include amounts received from payments on securities loans, as defined in section 512(a)(5). Do not include any capital gain dividends reportable on line 6. Report income from program-related investments on line 11. For debt instruments with an original issue discount, report the original issue discount ratably over the life of the bond on line 4. See section 1272 for more information.

In column (b). Enter the amount of dividend and interest income, and payments on securities loans from column (a). Do not include interest on tax-exempt government obligations.

In column (c). Enter the amount of dividends and interest income, and payments on securities loans from column (a). Include interest on tax-exempt government obligations.

Line 5a—Gross rents.

In column (a). Enter the gross rental income for the year from investment property reportable on line 11 of Part II.

In columns (b) and (c). Enter the gross rental income from column (a).

Line 5b—Net rental income or (loss). Figure the net rental income or (loss) for the year and enter that amount on the entry line to the left of column (a).

Report rents from other sources on line 11, Other income. Enter any expenses attributable to the rental income reported on line 5, such as interest and depreciation, on lines 13-23.

Line 6a—Net gain or (loss) from sale of assets. Enter the net gain or (loss) per books from all asset sales not included on line 10.

For assets sold and not included in Part IV, attach a schedule showing:

Date acquired,
Manner of acquisition,
Gross sales price,
Cost, other basis, or value at time of acquisition (if donated) and which of these methods was used,
Date sold,
To whom sold,
Expense of sale and cost of improvements made subsequent to acquisition, and
Depreciation since acquisition (if depreciable property).

Line 6b—Gross sales price for all assets on line 6a. Enter the gross sales price from all asset sales whose net gain or loss was reported on line 6a.

Line 7—Capital gain net income. Enter the capital gain net income from Part IV, line 2. SeePart IV instructions.

Line 8—Net short-term capital gain.

Only private operating foundations report their short-term capital gains on line 8.

Include only net short-term capital gain for the year (assets sold or exchanged that were held not more than 1 year). Do not include a net long-term capital gain or a net loss in column (c).

Do not include on line 8 a net gain from the sale or exchange of depreciable property, or land used in a trade or business (section 1231) and held for more than 1 year. However, include a net loss from such property on line 23 as an Other expense.

In general, foundations may carry to line 8 the net short-term capital gain reported on Part IV, line 3. However, if the foundation had any short-term capital gain from sales of debt-financed property, add it to the amount reported on Part IV, line 3, to figure the amount to include on line 8. For the definition of “debt-financed property,” see the Instructions for Form 990-T.

Line 9—Income modifications. Include on this line:

Amounts received or accrued as repayments of amounts taken into account as qualifying distributions;
Amounts received or accrued from the sale or other disposition of property to the extent that the acquisition of the property was considered a qualifying distribution for any tax year;
Any amount set aside for a specific project (see explanation in the instructions for Part XII) that was not necessary for the purposes for which it was set aside;
Income received from an estate, but only if the estate was considered terminated for income tax purposes due to a prolonged administration period; and
Amounts treated in an earlier tax year as qualifying distributions to:

A nonoperating private foundation, if the amounts were not redistributed by the grantee organization by the close of its tax year following the year in which it received the funds, or
An organization controlled by the distributing foundation or a disqualified person if the amounts were not redistributed by the grantee organization by the close of its tax year following the year in which it received the funds.

Lines 10a, b, c— Gross profit from sales of inventory. Enter the gross sales (less returns and allowances), cost of goods sold, and gross profit or (loss) from the sale of all inventory items, including those sold in the course of special events and activities. These inventory items are the ones the organization either makes to sell to others or buys for resale.

Do not report any sales or exchanges of investments on line 10.

Do not include any profit or (loss) from the sale of capital items such as securities, land, buildings, or equipment on line 10. Enter these amounts on
line 6a.

Do not include any business expenses such as salaries, taxes, rent, etc., on line 10. Include them on lines 13-23.

Attach a schedule showing the following items: Gross sales, Cost of goods sold, Gross profit or (loss). These items should be classified according to type of inventory sold (such as books, tapes, other educational or religious material, etc.). The totals from the schedule should agree with the entries on lines 10a-10c.

In column (c), enter the gross profit or (loss) from sales of inventory shown in column (a), line 10c.

Line 11—Other income. Enter the total of all the foundation's other income for the year. Attach a schedule that gives a description and the amount of the income. Include all income not reported on lines 1 through 10c. Also, see the instructions for Part XVI-A, line 11.

Include imputed interest on certain deferred payments figured under section 483 and any investment income not reportable on lines 3 through 5, including income from program-related investments (defined in the instructions for Part IX-B).

Do not include unrealized gains and losses on investments carried at market value. Report those as fund balance or net asset adjustments in Part III.

In column (b). Enter the amount of investment income included in line 11, column (a). Include dividends, interest, rents, and royalties derived from assets devoted to charitable activities, such as interest on student loans.

In column (c). Include all other items includible in adjusted net income not covered elsewhere in column (c).

Line 12—Total. In column (b). Domestic organizations should enter the total of lines 3-11. 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 total compensation for the year of all officers, directors, and trustees. If none was paid, enter zero. Complete line 1 of Part VIII to show the compensation of officers, directors, trustees, and foundation managers.

In columns (b), (c), and (d). Enter the portion of the compensation included in column (a) that is applicable to the column. For example, in column (c) enter the portion of the compensation included in column (a) that was paid or incurred to produce or collect income included in column (c).

Line 14—Other employee salaries and wages. Enter the salaries and wages of all employees other than those included on line 13.

Line 15—Contributions to employee pension plans and other benefits. Enter the employer's share of the contributions the organization paid to qualified and nonqualified pension plans and the employer's share of contributions to employee benefit programs (such as insurance, health, and welfare programs) that are not an incidental part of a pension plan. Complete the return/report of the Form 5500 series appropriate for the organization's plan. (See the Instructions for Form 5500 for information about employee welfare benefit plans required to file that form.)

Also include the amount of federal, state, and local payroll taxes for the year, but only those that are imposed on the organization as an employer. This includes the employer's share of social security and Medicare taxes, FUTA tax, state unemployment compensation tax, and other state and local payroll taxes. Do not include taxes withheld from employees' salaries and paid over to the various governmental units (such as federal and state income taxes and the employee's share of social security and Medicare taxes).

Lines 16a, b, and c—Legal, accounting, and other professional fees. On the appropriate line(s), enter the amount of legal, accounting, auditing, and other professional fees (such as fees for fundraising or investment services) charged by outside firms and individuals who are not employees of the foundation.

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

Report any fines, penalties, or judgments imposed against the foundation as a result of legal proceedings on line 23, Other expenses.

Line 18—Taxes. Attach a schedule listing the type and amount of each tax reported on line 18. Do not enter any taxes included on line 15.

In column (a). Enter the taxes paid (or accrued) during the year. Include all types of taxes recorded on the books, including real estate tax not reported on line 20; the tax on investment income; and any income tax.

In column (b). Enter only those taxes included in column (a) that are related to investment income taxable under section 4940. Do not include the section 4940 tax paid or incurred on net investment income or the section 511 tax on unrelated business income. Sales taxes may not be deducted separately, but must be treated as a part of the cost of acquired property, or as a reduction of the amount realized on disposition of the property.

In column (c). Enter only those taxes included in column (a) that relate to income included in column (c). Do not include any excise tax paid or incurred on the net investment income (as shown in Part VI), or any tax reported on Form 990-T.

In column (d). Do not include any excise tax paid on investment income (as reported in Part VI of this return or the equivalent part of a return for prior years) unless the organization is claiming status as a private operating foundation and completes Part XIV.

Line 19—Depreciation and depletion.

In column (a). Enter the expense recorded in the books for the year.

For depreciation, attach a schedule showing:

A description of the property,
The date acquired,
The cost or other basis (exclude any land),
The depreciation allowed or allowable in prior years,
The method of computation,
The rate (%) or life (years), and
The depreciation this year.

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

In columns (b) and (c). A deduction for depreciation is allowed only for property used in the production of income reported in the column, and only using the straight line method of computing depreciation. A deduction for depletion is allowed but must be figured only using the cost depletion method.

The basis used in figuring depreciation and depletion is the basis determined under normal basis rules, without regard to the special rules for using the fair market value on December 31, 1969, that relate only to gain or loss on dispositions for purposes of the tax on net investment income.

Line 20—Occupancy. Enter the amount paid or incurred for the use of office space or other facilities. If the space is rented or leased, enter the amount of rent. If the space is owned, enter the amount of mortgage interest, real estate taxes, and similar expenses, but not depreciation (reportable on line 19). In either case, include the amount for utilities and related expenses (for example, heat, lights, water, power, telephone, sewer, trash removal, outside janitorial services, and similar services). Do not include any salaries of the organization's own employees that are reportable on line 15.

Line 21—Travel, conferences, and meetings. Enter the expenses for officers, employees, or others during the year for travel, attending conferences, meetings, etc. Include transportation (including fares, mileage allowance, or automobile expenses), meals and lodging, and related costs whether paid on the basis of a per diem allowance or actual expenses incurred. Do not include any compensation paid to those who participate.

In column (b). Only 50% of the expense for business meals, etc., paid or incurred in connection with travel, meetings, etc., relating to the production of investment income may be deducted in figuring net investment income (section 274(n)).

In column (c). Enter the total amount of expenses paid or incurred by officers, employees, or others for travel, conferences, meetings, etc., related to income included in column (c).

Line 22—Printing and publications. Enter the expenses for printing or publishing and distributing any newsletters, magazines, etc. Also include the cost of subscriptions to, or purchases of, magazines, newspapers, etc.

Line 23—Other expenses. Enter all other expenses for the year. Include all expenses not reported on lines 13-22. Attach a schedule showing the type and amount of each expense.

If a deduction is claimed for amortization, attach a schedule showing:

Description of the amortized expenses;
Date acquired, completed, or expended;
Amount amortized;
Deduction for prior years;
Amortization period (number of months);
Current-year amortization; and
Total amount of amortization.

In column (c). In addition to the applicable portion of expenses from column (a), include any net loss from the sale or exchange of land or depreciable property that was held for more than
1 year and used in a trade or business.

A deduction for amortization is allowed but only for assets used for the production of income reported in column (c).

Line 25—Contributions, gifts, grants paid.

In column (a). Enter the total of all contributions, gifts, grants, and similar amounts paid (or accrued) for the year. List each contribution, gift, grant, etc., in Part XV, or attach a schedule of the items included on line 25 and list:

Each class of activity,
A separate total for each activity,
Name and address of donee,
Relationship of donee if related by:
1. Blood,
2. Marriage,
3. Adoption, or
4. Employment (including children of employees) to any disqualified person (see General Instruction C for definitions), and
The organizational status of donee (for instance, public charity—an organization described in section 509(a)(1), (2), or (3)).

You do not have to give the name of any indigent person who received one or more gifts or grants from the foundation unless that individual is a disqualified person or one who received a total of more than $1,000 from the foundation during the year.

Activities should be classified according to purpose and in greater detail than merely classifying them as charitable, educational, religious, or scientific activities. For example, use identification such as: payments for nursing service, for fellowships, or for assistance to indigent families.

Foundations may include, as a single entry on the schedule, the total of amounts paid as grants for which the foundation exercised expenditure responsibility. Attach a separate report for each grant.

When the fair market value of the property at the time of disbursement is the measure of a contribution, the schedule must also show:

A description of the contributed property,
The book value of the contributed property,
The method used to determine the book value,
The method used to determine the fair market value, and
The date of the gift.

The difference between fair market value and book value should be shown 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 the foundation paid during the year.

Do not include contributions to organizations controlled by the foundation or by a disqualified person (see General Instruction C for definitions). Do not include contributions to nonoperating private foundations unless the donees are exempt from tax under section 501(c)(3), they redistribute the contributions, and they maintain sufficient evidence of redistributions according to the regulations under section 4942(g).
Do not include contributions paid from a nonoperating private foundation to a Type III supporting organization (as defined under section 4943(f)(5)) that is not a functionally integrated Type III supporting organization (as defined under section 4943(f)(5)(B)). See Notice 2006-109, 2006-51 I.R.B. 1121, available at www.irs.gov/irb/2006-51_IRB/index.html.
Do not include contributions paid from a nonoperating private foundation to any supporting organization if a disqualified person of the private foundation controls the supporting organization or any of its supported organizations. See Notice 2006-109.
Do not reduce the amount of grants paid in the current year by the amount of grants paid in a prior year that was returned or recovered in the current year. Report those repayments in column (c), line 9, and in Part XI, line 4.
Do not include any payments of set-asides (see instructions for Part XII, line 3) taken into account as qualifying distributions in the current year or any prior year. All set-asides are included in qualifying distributions (Part XII, line 3) in the year of the set-aside, regardless of when paid.
Do not include current year write-offs of prior years' program-related investments. All program-related investments are included in qualifying distributions (Part XII, line 1b) in the year the investment is made.
Do not include any payments that are not qualifying distributions as defined in section 4942(g)(1).

Net Amounts

Line 27a—Excess of revenue over expenses. 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 by which net assets (or fund balances) have increased or decreased for the year. See the instructions for Part III, Analysis of Changes in Net Assets or Fund Balances.

Line 27b—Net investment income. Domestic organizations, subtract line 26 from line 12. Enter the result. Exempt foreign organizations, enter the amount shown on line 12. However, if the organization is a domestic organization and line 26 is more than line 12 (such as expenses exceed income), enter zero (not a negative amount).

Line 27c—Adjusted net income. Subtract line 26, column (c) from line 12, column (c) and enter the result.

Part II—Balance Sheets

For column (b), show the book value at the end of the year. For column (c), show the fair market value at the end of the year. Attached schedules must show the end-of-year value for each asset listed in columns (b) and (c).

Foundations whose books of account included total assets of $5,000 or more at any time during the year must complete all of columns (a), (b), and (c).
Foundations with less than $5,000 of total assets per books at all times during the year must complete all of columns (a) and (b), and only line 16 of column (c).

Line 1—Cash—Non-interest-bearing. Enter the amount of cash on deposit in checking accounts, deposits in transit, change funds, petty cash funds, or any other non-interest-bearing account. Do not include advances to employees or officers or refundable deposits paid to suppliers or others.

Line 2—Savings and temporary cash investments. Enter the total of cash in savings or other interest-bearing accounts and temporary cash investments, such as money market funds, commercial paper, certificates of deposit, and U.S. Treasury bills or other governmental obligations that mature in less than 1 year.

Line 3—Accounts receivable. On the dashed lines to the left of column (a), enter the year-end figures for total accounts receivable and allowance for doubtful accounts from the sale of goods and/or the performance of services. In columns (a), (b), and (c), enter net amounts (total accounts receivable reduced by the corresponding allowance for doubtful accounts). Claims against vendors or refundable deposits with suppliers or others may be reported here if not significant in amount. (Otherwise, report them on line 15, Other assets.) Any receivables due from officers, directors, trustees, foundation managers, or other disqualified persons must be reported on line 6. Report receivables (including loans and advances) due from other employees on line 15.

Line 4—Pledges receivable. On the dashed lines to the left of column (a), enter the year-end figures for total pledges receivable and allowance for doubtful accounts (pledges estimated to be uncollectible). In columns (a), (b), and (c), enter net amounts (total pledges receivable reduced by the corresponding allowance for doubtful accounts).

Line 5—Grants receivable. Enter the total grants receivable from governmental agencies, foundations, and other organizations as of the beginning and end of the year.

Line 6—Receivables due from officers, directors, trustees, and other disqualified persons. Enter here (and on an attached schedule described below) all receivables due from officers, directors, trustees, foundation managers, and other disqualified persons and all secured and unsecured loans (including advances) to such persons. Disqualified person is defined in General
Instruction C.

Attached schedules. (a) On the required schedule, report each loan separately, even if more than one loan was made to the same person, or the same terms apply to all loans made.

Salary advances and other advances for the personal use and benefit of the recipient and receivables subject to special terms or arising from transactions not functionally related to the foundation's charitable purposes must be reported as separate loans for each officer, director, etc.

(b) Receivables that are subject to the same terms and conditions (including credit limits and rate of interest) as receivables due from the general public from an activity functionally related to the foundation's charitable purposes may be reported as a single total for all the officers, directors, etc. Travel advances made for official business of the organization may also be reported as a single total.

For each outstanding loan or other receivable that must be reported separately, the attached schedule should show the following information (preferably in columnar form):

Borrower's name and title,
Original amount,
Balance due,
Date of note,
Maturity date,
Repayment terms,
Interest rate,
Security provided by the borrower,
Purpose of the loan, and
Description and fair market value of the consideration furnished by the lender (for example, cash—$1,000; or 100 shares of XYZ, Inc., common stock— $9,000).

The above detail is not required for receivables or travel advances that may be reported as a single total (see (b) above); however, report and identify those totals separately on the attachment.

Line 7—Other notes and loans receivable. On the dashed lines to the left of column (a), enter the combined total year-end figures for notes receivable and loans receivable and the allowance for doubtful accounts.

Notes receivable. In columns (a), (b), and (c), enter the amount of all notes receivable not listed on line 6 and not acquired as investments. Attach a schedule similar to the one for line 6. The schedule should also identify the relationship of the borrower to any officer, director, trustee, foundation manager, or other disqualified person.

For a note receivable from any section 501(c)(3) organization, list only the name of the borrower and the balance due on the required schedule.

Loans receivable. In columns (a), (b), and (c), enter the gross amount of loans receivable, minus the allowance for doubtful accounts, from the normal activities of the filing organization (such as scholarship loans). An itemized list of these loans is not required, but attach a schedule showing the total amount of each type of outstanding loan. Report loans to officers, directors, trustees, foundation managers, or other disqualified persons on line 6 and loans to other employees on line 15.

Line 8—Inventories for sale or use. Enter the amount of materials, goods, and supplies purchased or manufactured by the organization and held for sale or use in some future period.

Line 9—Prepaid expenses and deferred charges. Enter the amount of short-term and long-term prepayments of expenses attributable to one or more future accounting periods. Examples include prepayments of rent, insurance, and pension costs, and expenses incurred in connection with a solicitation campaign to be conducted in a future accounting period.

Lines 10a, b, and c—Investments— government obligations, corporate stocks and bonds. Enter the book value (which may be market value) of these investments.

Attach a schedule that lists each security held at the end of the year and shows whether the security is listed at cost (including the value recorded at the time of receipt in the case of donated securities) or end-of-year market value. Do not include amounts shown on line 2. Governmental obligations reported on line 10a are those that mature in 1 year or more. Debt securities of the U.S. Government may be reported as a single total rather than itemized. Obligations of state and municipal governments may also be reported as a lump-sum total. Do not combine U.S. Government obligations with state and municipal obligations on this schedule.

Line 11—Investments—land, buildings, and equipment. On the dashed lines to the left of column (a), enter the year-end book value (cost or other basis) and accumulated depreciation of all land, buildings, and equipment held for investment purposes, such as rental properties. In columns (a) and (b), enter the book value of all land, buildings, and equipment held for investment less accumulated depreciation. In column (c), enter the fair market value of these assets. Attach a schedule listing these investment fixed assets held at the end of the year and showing, for each item or category listed, the cost or other basis, accumulated depreciation, and book value.

Line 12—Investments—mortgage loans. Enter the amount of mortgage loans receivable held as investments but do not include program-related investments (see instructions for line 15).

Line 13—Investments—other. Enter the amount of all other investment holdings not reported on lines 10 through 12. Attach a schedule listing and describing each of these investments held at the end of the year. Show the book value for each and indicate whether the investment is listed at cost or end-of-year market value. Do not include program-related investments (see instructions for line 15).

Line 14—Land, buildings, and equipment. On the dashed lines to the left of column (a), enter the year-end book value (cost or other basis) and accumulated depreciation of all land, buildings, and equipment owned by the organization and not held for investment. In columns (a) and (b), enter the book value of all land, buildings, and equipment not held for investment less accumulated depreciation. In column (c), enter the fair market value of these assets. Include any property, plant, and equipment owned and used by the organization to conduct its charitable activities. Attach a schedule listing these fixed assets held at the end of the year and showing the cost or other basis, accumulated depreciation, and book value of each item or category listed.

Line 15—Other assets. List and show the book value of each category of assets not reportable on lines 1 through 14. Attach a separate schedule if more space is needed.

One type of asset reportable on line 15 is program-related investments. These are investments made primarily to accomplish a charitable purpose of the filing organization rather than to produce income.

Line 16—Total assets. All filers must complete line 16 of columns (a), (b), and (c). These entries represent the totals of lines 1 through 15 of each column. However, foundations that have assets of less than $5,000 per books at all times during the year need not complete lines 1 through 15 of column (c).

The column (c) amount is also entered on the entry space for I on page 1.

Line 17—Accounts payable and accrued expenses. Enter the total of accounts payable to suppliers and others and accrued expenses, such as salaries payable, accrued payroll taxes, and interest payable.

Line 18—Grants payable. Enter the unpaid portion of grants and awards that the organization has made a commitment to pay other organizations or individuals, whether or not the commitments have been communicated to the grantees.

Line 19—Deferred revenue. Include revenue that the organization has received but not yet earned as of the balance sheet date under its method of accounting.