If a transaction is determined to be self-dealing, there is generally only one act of self-dealing. If the transaction involves leasing property, lending money or other extension of credit, other use of money or property, or payment of compensation, the transaction will be treated as an act of self-dealing on the day the transaction occurs and as an act of self-dealing on the first day of each tax year or part of a year within the taxable period that begins after the year in which the transaction occurs.
If a transaction involves joint participation by two or more disqualified persons, the transaction will be treated as a separate act of self-dealing for each individual.
For purposes of terminating tax-exempt status and for determining a foundation manager's liability for penalties for repeated, willful or flagrant disregard of self-dealing prohibitions, however, the transaction will be treated as only one act of self-dealing. An individual and one or more members of the individual's family will be treated as one person regardless of whether a member of the family is a disqualified person. The liability imposed on a disqualified person and one or more members of the individual's family for joint participation in an act of self-dealing is joint and several.
Fair market value of a specific asset is determined under the rules discussed in Valuation of Assets.