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Private Foundation Excess Business Holdings - Second Phase Reduction

The second phase is the 15-year period immediately following the first phase.  During the second phase, the foundation's ownership of business interests that it held on May 26, 1969, must be reduced so that by the end of the phase the combined holdings of the foundation and its disqualified persons are not greater than 35 percent of the voting stock of a corporation (or 35 percent of the value of all outstanding shares of all classes of stock, or 35 percent of comparable interests in an unincorporated enterprise).

If, at any time during the second phase, the holdings of all disqualified persons together are greater than 2 percent of the voting stock, the holdings of the foundation itself may not be more than 25 percent of the voting stock or 25 percent of the value of all outstanding shares of all classes of stock.

Page Last Reviewed or Updated: 20-Oct-2016