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Fair market value of private foundation assets

The combined fair market value of all foundation assets includes:

  1. The average of the fair market values on a monthly basis of securities for which market quotations are readily available,
  2. The average of the foundation's monthly cash balances (minus cash balances excluded as cash held for charitable and related activities), and
  3. The fair market value of all other assets (except assets excluded from the computation of minimum investment return (below) or assets used for exempt purposes) for the period of time during the tax year those assets are held by the foundation.  For the determination of the fair market value of the asset, see Valuation of assets.

Certain assets are not included in determining minimum investment return.  These include:

  1. Any future interest (such as a vested or contingent remainder, whether legal or equitable) of a foundation in the principal or income of any real or personal property (other than a future interest created by the foundation after 1969) until all intervening interests in, and rights to the actual possession or enjoyment of, that property have expired, or until the future interest has been constructively received by the foundation even though the future interest has not been actually reduced to possession by the foundation.  An example of a constructively received future interest is a future interest that has been credited to the foundation's account, set apart for the foundation, or otherwise made available so that the foundation may acquire it at any time, or could have acquired the interest had the foundation given notice of its intention to acquire,
  2. The assets of an estate until those assets are distributed to the foundation or, due to a prolonged period of administration, the estate is considered terminated for federal income tax purposes,
  3. Any present foundation interest in any trust created and funded by another person,
  4. Any pledge of money or property to the foundation, whether or not the pledge is legally enforceable, and

 


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Page Last Reviewed or Updated: 29-Jul-2016