By Akilah Massey, Exponent Philanthropy
Tax season will be here before we know it, and regulators estimate that at least 25% of all IRS Form 990-PFs have errors. Is your private foundation’s annual tax return among them?
Below are tips for private foundations from our primer Filing the Form 990-PF.
Part I
- Column c—Most foundations should leave this column blank. Only private operating foundations and foundations with income from charitable activities use this column.
- Line 2—If the foundation is not required to attach Schedule B, be sure to check the box.
- Line 18—Reflect the foundation’s share of payroll taxes (e.g., Social Security, Medicare) here. Allocate any portion paid for the production of income to column b, and include only the charitable portion in column d.
Part IV
- Column b—Be sure to indicate whether each security sold was purchased or donated.
- Line 2—Make the best use of capital losses by using them to offset gains and decrease the excise tax on net investment income. Since losses cannot be carried backward or forward to other years, consider whether to strategically sell appreciated assets in the same year you will have losses.
