Tax on Private Foundation Failure to Distribute Income: "Distributable amount"


Distributable amount is equal to the minimum investment return of a private foundation reduced by the sum of any income taxes and the tax on investment income, and increased by--

  1. Amounts received or accrued as repayments of amounts taken into account as qualifying distributions for any tax year,
  2. 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, and
  3. Any amount set aside for a specific project to the extent the amount was not necessary for the purposes for which it was set aside.

If a private foundation has income from distributions from a split-interest trust attributable to the income portion of amounts placed in trust after May 26, 1969, this income is included in the distributable amount.

If a split-interest trust distributes income from amounts placed in trust both on or before and after May 26, 1969, these distributions must be allocated between those amounts placed in trust during these periods to determine the extent to which the distributions are included in the foundation's distributable amount.

Additional information

Limits on distributable amount

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