IRS Logo
Print - Click this link to Print this page

Removal from Jeopardy

The foundation removes an investment from jeopardy when it sells or otherwise disposes of it, and the proceeds of the sale or other disposition are not themselves jeopardizing investments.

A change by a foundation in the form or terms of a jeopardizing investment results in the removal of the investment from jeopardy if, after the change, the investment no longer jeopardizes the carrying out of the foundation's exempt purposes.  Making one jeopardizing investment and later exchanging this investment for another jeopardizing investment will be treated as only one jeopardizing investment.  A jeopardizing investment is not removed from jeopardy by a transfer to another private foundation related to the transferor foundation unless the investment is a program-related investment in the hands of the transferee foundation.

Return to Life Cycle of a Private Foundation

Page Last Reviewed or Updated: 14-Oct-2016