A charitable trust described in Internal Revenue Code section 4947(a)(1) is a trust that is not tax exempt, all of the unexpired interests of which are devoted to one or more charitable purposes, and for which a charitable contribution deduction was allowed under a specific section of the Internal Revenue Code. A charitable trust is treated as a private foundation unless it meets the requirements for one of the exclusions that classifies it as a public charity. Thus, it is subject to the private foundation excise tax provisions and the other provisions that apply to exempt private foundations, including termination requirements and governing instrument requirements. However, a charitable trust is not treated as a charitable organization for purposes of exemption from tax. Accordingly, the trust is subject to the excise tax on its investment income under the rules that apply to taxable foundations rather than those that apply to tax-exempt foundations. For purposes of the organizational test, when a charitable trust seeks exemption from tax as a charitable organization, the trust is considered organized on the day it first becomes subject to section 4947(a)(1). Generally, for purposes of the special and transitional rules for excise taxes discussed in this publication, a charitable trust will be considered organized on the first day it has amounts in trust for which a deduction was allowed under the Internal Revenue Code. Under this rule, a trust may be treated as a private foundation in existence on a date governing one of the applicable special and transitional rules even though the trust did not otherwise become subject to the provisions that apply to private foundations until a later date. Scope of provisions regarding charitable trusts. These provisions apply to nonexempt trusts in which all unexpired interests are charitable. An estate from which the executor or administrator is required to distribute all of the net assets in trust to charitable beneficiaries will not be considered a charitable trust during the period of estate administration or settlement except for the conditions discussed in the next paragraph. A charitable trust created by a will is considered a charitable trust as of the date of death of the decedent-grantor. However, a revocable trust that becomes irrevocable upon the death of the decedent-grantor, or a trust created by will from which the trustee is required to distribute all of the net assets for, or free of trust to, charitable beneficiaries, is not considered a charitable trust for a reasonable period of settlement after becoming irrevocable. After that period, the trust is considered a charitable trust. Return to Life Cycle of a Private Foundation