US Internal Revenue Service: i990pf--1999

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1999Department of the TreasuryInternal Revenue Service

Instructions for Form990-PFReturn of Private Foundation or Section 4947(a)(1)Nonexempt Charitable Trust Treated as a PrivateFoundationSection references are to the Internal Revenue Code unless otherwise noted.

Contents Page

A Change To NoteThe Tax and Trade Relief Extension Actof 1998 changed the public inspectionrules. Once these rules take effect, theywill eliminate the newspaper noticerequirement and change the time periodand manner in which an annual return orexemption application is made availablefor public inspection. See GeneralInstruction Q for more information.

Contents Page Photographs of MissingChildrenThe Internal Revenue Service is a proudpartner with the National Center forMissing and Exploited Children.Photographs of missing children selectedby the Center may appear in instructionson pages that would otherwise be blank.You can help bring these children homeby looking at the photographs and calling1-800-THE-LOST (1-800-843-5678) if yourecognize a child.

Phone HelpIf you have questions and/or need helpcompleting this form, please call1-877-829-5500. This toll-free telephoneservice is available Monday throughFriday from 8:00 a.m. to 9:30 p.m.Eastern time.

How To Get Forms andPublications

Personal Computer

You can access the IRS's Internet WebSite 24 hours a day, 7 days a week atwww.irs.gov to:q Download forms, instructions, andpublications.q See answers to frequently asked taxquestions.q Search publications on-line by topic orkeyword.q Send us comments or request help viae-mail.q Sign up to receive local and national taxnews by e-mail.

You can also reach us using filetransfer protocol at ftp.irs.gov.

CD-ROM

Order Pub. 1796, Federal Tax Productson CD-ROM, and get:q Current year forms, instructions, andpublications.q Prior year forms, instructions, andpublications.q Popular tax forms that may be filled inelectronically, printed out for submission,and saved for recordkeeping.

Part V—Qualification Under Section4940(e) for Reduced Tax on NetInvestment Income . . . . . . . . 16

General Instructions

A. Who Must File . . . . . . . . . . 2

B. Which Parts To Complete . . . . 2Part VI—Excise Tax Based on

Investment Income . . . . . . . . 16C. Definitions . . . . . . . . . . . . 2

D. Other Forms You May Need To File 3 Part VII-A—Statements RegardingActivities . . . . . . . . . . . . . 17E. Useful Publications . . . . . . . . 4

Part VII-B—Activities for Which Form4720 May Be Required . . . . . . 18F. Use of Form 990-PF To SatisfyState Reporting Requirements . . 4

Part VIII—Information About Officers,Directors, Trustees, etc. . . . . . 19

G. Furnishing Copies of Form 990-PFto State Officials . . . . . . . . . 4

Part IX-A—Summary of DirectCharitable Activities . . . . . . . . 19

H. Accounting Period . . . . . . . . 4

I. Accounting Methods . . . . . . . 4Part IX-B—Summary of

Program-Related Investments . . 20J. When and Where To File . . . . 4

K. Extension of Time To File . . . . 5Part X—Minimum Investment Return 20

L. Amended Return . . . . . . . . . 5Part XI—Distributable Amount . . . 21

M. Penalty for Failure To FileTimely, Completely, or Correctly . 5 Part XII—Qualifying Distributions . . 22

Part XIII—Undistributed Income . . 22N. Penalties for Not Paying Taxon Time . . . . . . . . . . . . . 5 Part XIV—Private Operating

Foundations . . . . . . . . . . . . 24O. Figuring and Paying Estimated Tax 5Part XV—Supplementary Information 24P. Tax Payment Methods for Domestic

Private Foundations . . . . . . . 5 Part XVI-A—Analysis ofIncome-Producing Activities . . . . 24Q. Public Inspection Requirements . 6

Part XVI-B—Relationship of Activitiesto the Accomplishment of ExemptPurposes . . . . . . . . . . . . . 25

R. Disclosures Regarding CertainInformation and Services Furnished 7

S. Organizations Organized orCreated in a Foreign Country orU.S. Possession . . . . . . . . . 7

Part XVII—Information RegardingTransfers To and Transactions andRelationships With NoncharitableExempt Organizations . . . . . . 25T. Liquidation, Dissolution, Termination,

or Substantial Contraction . . . . 8Part XVIII—Public Inspection . . . . 26

U. Filing Requirements DuringSection 507(b)(1)(B) Termination 8 Signature . . . . . . . . . . . . . . 26

Paperwork Reduction Act Notice . . 26V. Special Rules for Section507(b)(1)(B) Terminations . . . . 8 Exclusion Codes . . . . . . . . . . 27

Index . . . . . . . . . . . . . . . . 28W. Rounding, Currency, andAttachments . . . . . . . . . . . 8

Specific Instructions

Completing the Heading . . . . . . 9

Part I—Analysis of Revenue andExpenses . . . . . . . . . . . . . 9

Part II—Balance Sheets . . . . . . 14

Part III—Analysis of Changes in NetAssets or Fund Balances . . . . . 16

Part IV—Capital Gains and Losses forTax on Investment Income . . . . 16

Cat. No. 11290Y



q The Internal Revenue Bulletin.Buy the CD-ROM on the Internet atwww.irs.gov/cdorders from the NationalTechnical Information Service (NTIS) for$16 (plus a $5 handling fee) and save30%, or call 1-877-CDFORMS(1-877-233-6767) toll free to buy theCD-ROM for $23 (plus a $5 handling fee).

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1-800-TAX-FORM (1-800-829-3676). Youcan also get most forms and publicationsat your local IRS office.

General InstructionsPurpose of form. Form 990-PF is used:q To figure the tax based on investmentincome, andq To report charitable distributions andactivities.

Also, Form 990-PF serves as asubstitute for the section 4947(a)(1)nonexempt charitable trust's income taxreturn, Form 1041, U.S. Income TaxReturn for Estates and Trusts, when the

trust has no taxable income.

A. Who Must FileForm 990-PF is an annual informationreturn that must be filed by:q Exempt private foundations (section6033(a), (b), and (c)).q Taxable private foundations (section6033(d)).q Organizations that agree to privatefoundation status and whose applicationsfor exempt status are pending on the duedate for filing Form 990-PF.q Organizations that made an electionunder section 41(e)(6).q Organizations that are making a section507 termination.q Section 4947(a)(1) nonexemptcharitable trusts that are treated asprivate foundations (section 6033(d)).Note: Include on the foundation's return the financial and other information of any disregarded entity owned by the foundation. See Regulations sections 301.7701-1 through 3 for information on the classification of certain business organizations including an eligible entity that is disregarded as an entity separate from its owner (disregarded entity).

Other section 4947(a)(1) nonexemptcharitable trusts. Section 4947(a)(1)nonexempt charitable trusts that are nottreated as private foundations do not fileForm 990-PF. However, they may needto file Form 990, Return of OrganizationExempt From Income Tax, or Form990-EZ, Short Form Return ofOrganization Exempt From Income Tax.With either of these forms, the trust mustalso file Schedule A (Form 990),Organization Exempt Under Section501(c)(3) (Except Private Foundation),and Section 501(e), 501(f), 501(k),501(n), or Section 4947(a)(1) Nonexempt

Charitable Trust SupplementaryInformation. (See Form 990 and Form990-EZ instructions.)

B. Which Parts To CompleteThe parts of the form listed below do notapply to all filers. If an entire part or amajor portion of a part does not apply,enter “N/A” where appropriate.q Part I, column (c), applies only toprivate operating foundations and to

nonoperating private foundations thathave income from charitable activities.q Part II, column (c), with the exceptionof line 16, applies only to organizationshaving at least $5,000 in assets per booksat some time during the year. Line 16,column (c), applies to all filers.q Part IV does not apply to foreignorganizations.q Parts V and VI do not apply toorganizations making an election undersection 41(e).q Part X does not apply to foreignfoundations that check box D2 on page 1of Form 990-PF unless they claim statusas a private operating foundation.q Parts XI and XIII do not apply to foreignfoundations that check box D2 on page 1of Form 990-PF. However, check the boxat the top of Part XI. Part XI does notapply to private operating foundations.Also, if the organization is a privateoperating foundation for any of the yearsshown in Part XIII, do not complete theportions that apply to those years.q Part XIV applies only to privateoperating foundations.q Part XV applies only to organizationshaving assets of $5,000 or more duringthe year. This part does not apply tocertain foreign organizations.

Sequencing Chart To Complete theForm

You may find the following chart helpful.It limits jumping from one part of the formto another to compute an amount neededto complete an earlier part. If youcomplete the parts in the listed order, anyinformation you may need from anotherpart will already be entered.

C. Definitionsq A private foundation is a domestic orforeign organization exempt from incometax under section 501(a); described insection 501(c)(3); and is other than anorganization described in sections509(a)(1) through (4).

In general, churches, hospitals,schools, and broadly publicly supportedorganizations are excluded from privatefoundation status by these sections.These organizations may be required to

file Form 990 (or Form 990-EZ) insteadof Form 990-PF.q A nonexempt charitable trust treatedas a private foundation is a trust that isnot exempt from tax under section 501(a)and all of the unexpired interests of whichare devoted to religious, charitable, orother purposes described in section170(c)(2)(B), and for which a deductionwas allowed under a section of the Codelisted in section 4947(a)(1).q A taxable private foundation is an

organization that is no longer exemptunder section 501(a) as an organizationdescribed in section 501(c)(3). Though itmay operate as a taxable entity, it willcontinue to be treated as a privatefoundation until that status is terminatedunder section 507.q A private operating foundation is anorganization that is described undersection 4942(j)(3) or (5). It means anyprivate foundation that spends at least85% of the smaller of its adjusted netincome (figured in Part I) or its minimuminvestment return (figured in Part X)directly for the active conduct of theexempt purpose or functions for which the

foundation is organized and operated andthat also meets the assets test, theendowment test, or the support test(discussed in Part XIV).q A nonoperating private foundation isa private foundation that is not a privateoperating foundation.q A foundation manager is an officer,director, or trustee of a foundation, or anindividual who has powers similar to thoseof officers, directors, or trustees. In thecase of any act or failure to act, the term“foundation manager” may also includeemployees of the foundation who havethe authority to act.q A disqualified person is:

1. A substantial contributor (seeinstructions for Part VII-A, line 10, onpage 18);

2. A foundation manager;3. A person who owns more than 20%

of a corporation, partnership, trust, orunincorporated enterprise that is itself asubstantial contributor;

4. A family member of an individualdescribed in 1, 2, or 3 above; or

5. A corporation, partnership, trust, orestate in which persons described in 1,2, 3, or 4 above own a total beneficialinterest of more than 35%.

6. For purposes of section 4941

(self-dealing), a disqualified person alsoincludes certain government officials.(See section 4946(c) and the relatedregulations.)

7. For purposes of section 4943(excess business holdings), a disqualifiedperson also includes:

a. A private foundation that iseffectively controlled (directly or indirectly)by the same persons who control theprivate foundation in question, or

b. A private foundation to whichsubstantially all of the contributions were

Step Part Step Part

1.................... IV 8 .................. XII, lines 1–42.................... I & II 9 .................. V & VI3.................... Heading 10.................. XII, lines 5–64.................... III 11.................. XI5.................... VII-A 12.................. XIII6.................... VIII 13.................. VII-B7.................... IX-A – X 14.................. XIV – XVIII

Page 2 Form 990-PF Instructions



made (directly or indirectly) by one ormore of the persons described in 1, 2, and3 above, or members of their families,within the meaning of section 4946(d).q An organization is controlled by afoundation or by one or more disqualifiedpersons with respect to the foundation ifany of these persons may, by combiningtheir votes or positions of authority,require the organization to make anexpenditure or prevent the organizationfrom making an expenditure, regardless

of the method of control. “Control” isdetermined regardless of how thefoundation requires the contribution to beused.

D. Other Forms You MayNeed To FileForm W-2, Wage and Tax Statement.Form W-3, Transmittal of Wage and TaxStatements.Form 941, Employer's Quarterly FederalTax Return. Used to report social security,Medicare, and income taxes withheld byan employer and social security andMedicare taxes paid by an employer.

If income, social security, and Medicaretaxes that must be withheld are notwithheld or are not paid to the IRS, aTrust Fund Recovery Penalty may apply.The penalty is 100% of such unpaidtaxes.

This penalty may be imposed on allpersons (including volunteers, see below)whom the IRS determines to beresponsible for collecting, accounting for,and paying over these taxes, and whowillfully did not do so.

This penalty does not apply to anyvolunteer, unpaid member of any boardof trustees or directors of a tax-exemptorganization, if this member:

1. Is solely serving in an honorarycapacity,

2. Does not participate in theday-to-day or financial activities of theorganization, and

3. Does not have actual knowledgeof the failure to collect, account for, andpay over these taxes.

However, this exception does not applyif it results in no person being liable for thepenalty.Form 990-T, Exempt OrganizationBusiness Income Tax Return. Everyorganization exempt from income taxunder section 501(a) that has total gross

income of $1,000 or more from all tradesor businesses that are unrelated to theorganization's exempt purpose must filea return on Form 990-T. The form is alsoused by tax-exempt organizations toreport other additional taxes including theadditional tax figured in Part IV of Form8621, Return by a Shareholder of aPassive Foreign Investment Company orQualified Electing Fund.Form 990-W, Estimated Tax on UnrelatedBusiness Taxable Income for Tax-ExemptOrganizations (and on Investment Incomefor Private Foundations).

Form 1041, U.S. Income Tax Return forEstates and Trusts. Required of section4947(a)(1) nonexempt charitable truststhat also file Form 990-PF. However, if thetrust does not have any taxable incomeunder the income tax provisions (subtitleA of the Code), it may use the filing ofForm 990-PF to satisfy its Form 1041filing requirement under section 6012. Ifthis condition is met, check the box forquestion 13, Part VII-A, of Form 990-PFand do not file Form 1041.

Form 1041-ES, Estimated Income Tax forEstates and Trusts.Form 1096, Annual Summary andTransmittal of U.S. Information Returns.Forms 1099-INT, MISC, OID, and R,Information returns for reporting certaininterest; miscellaneous income (e.g.,payments to providers of health andmedical services, miscellaneous incomepayments, and nonemployeecompensation); original issue discount;and distributions from retirement orprofit-sharing plans, IRAs, SEPs orSIMPLEs, and insurance contracts.Form 1120, U.S. Corporation Income TaxReturn. Filed by nonexempt taxableprivate foundations that have taxableincome under the income tax provisions(subtitle A of the Code). The Form 990-PFannual information return is also filed bythese taxable foundations.Form 1120-POL, U.S. Income Tax Returnfor Certain Political Organizations.Section 501(c) organizations must fileForm 1120-POL if their politicalexpenditures and their net investmentincome both exceed $100 for the year.Form 1128, Application To Adopt,Change, or Retain a Tax Year.Form 2758, Application for Extension ofTime To File Certain Excise, Income,

Information, and Other Returns.Form 2220, Underpayment of EstimatedTax by Corporations, is used bycorporations and trusts filing Form 990-PFto see if the foundation owes a penaltyand to figure the amount of the penalty.Generally, the foundation is not requiredto file this form because the IRS canfigure the amount of any penalty and billthe foundation for it. However, completeand attach Form 2220 even if thefoundation does not owe the penalty if:q The annualized income or the adjustedseasonal installment method is used, orq The foundation is a “largeorganization,” (see General Instruction O)

computing its first required installmentbased on the prior year's tax.If Form 2220 is attached, check the box

on line 8, Part VI, on page 4 of Form990-PF and enter the amount of anypenalty on this line.Form 4506-A, Request for PublicInspection or Copy of ExemptOrganization Tax Form.Form 4720, Return of Certain ExciseTaxes on Charities and Other PersonsUnder Chapters 41 and 42 of the Internal

Revenue Code, is primarily used todetermine the excise taxes imposed on:acts of self-dealing between privatefoundations and disqualified persons;failure to distribute income; excessbusiness holdings; investments that

jeopardize the foundation's charitablepurposes; and making political or othernoncharitable expenditures. Certainexcise taxes and penalties also apply tofoundation managers, substantialcontributors, and certain related persons

and are reported on this form.Form 5500, Annual Return/Report ofEmployee Benefit Plan is used to reportinformation concerning employee benefitplans, Direct Filing Entities and fringebenefit plans.Form 8109, Federal Tax Deposit Coupon.Form 8282, Donee Information Return.Required of the donee of “charitablededuction property” that sells, exchanges,or otherwise disposes of the propertywithin 2 years after the date it receivedthe property.

Also required of any successor doneethat disposes of charitable deductionproperty within 2 years after the date thatthe donor gave the property to the originaldonee. (It does not matter who gave theproperty to the successor donee. It mayhave been the original donee or anothersuccessor donee.) For successor donees,the form must be filed only for anyproperty that was transferred by theoriginal donee after July 5, 1988.Form 8275, Disclosure Statement.Taxpayers and tax return preparersshould attach this form to Form 990-PF todisclose items or positions (except thosecontrary to a regulation—see Form8275-R below) that are not otherwiseadequately disclosed on the tax return.The disclosure is made to avoid parts ofthe accuracy-related penalty imposed fordisregard of rules or substantialunderstatement of tax. Form 8275 is alsoused for disclosures relating to preparerpenalties for understatements due tounrealistic positions or for willful orreckless conduct.Form 8275-R, Regulation DisclosureStatement. Use this form to disclose anyitem on a tax return for which a positionhas been taken that is contrary toTreasury regulations.Form 8300, Report of Cash PaymentsOver $10,000 Received in a Trade orBusiness. Used to report cash amounts inexcess of $10,000 that were received ina single transaction (or in two or morerelated transactions) in the course of atrade or business (as defined insection 162).Form 8718, User Fee for ExemptOrganization Determination LetterRequest. Used by a private foundationthat has completed a section 507termination and seeks a determinationletter that it is now a public charity.Form 8822, Change of Address.

Form 990-PF Instructions Page 3



E. Useful PublicationsThe following publications may be helpfulin preparing Form 990-PF:Publication 525, Taxable andNontaxable Income.Publication 578, Tax Information forPrivate Foundations and FoundationManagers.Publication 583, Starting a Business andKeeping Records.Publication 598, Tax on UnrelatedBusiness Income of ExemptOrganizations.Publication 910, Guide to Free TaxServices.Publication 1391, Deductibility ofPayments Made to Charities ConductingFund-Raising Events.

Publications and forms are available atno charge through IRS offices or bycalling 1-800-TAX-FORM(1-800-829-3676).

F. Use of Form 990-PF ToSatisfy State Reporting

RequirementsSome states and local government unitswill accept a copy of Form 990-PF andrequired attachments instead of all or partof their own financial report forms.

If the organization plans to use Form990-PF to satisfy state or local filingrequirements, such as those from statecharitable solicitation acts, note thefollowing:Determine state filing requirements.Consult the appropriate officials of allstates and other jurisdictions in which theorganization does business to determinetheir specific filing requirements. “Doingbusiness” in a jurisdiction may include any

of the following:q Soliciting contributions or grants by mailor otherwise from individuals, businesses,or other charitable organizations,q Conducting programs,q Having employees within that

jurisdiction, orq Maintaining a checking account orowning or renting property there.Monetary tests may differ. Some or allof the dollar limitations that apply to Form990-PF when filed with the IRS may notapply when using Form 990-PF insteadof state or local report forms. IRS dollarlimitations that may not meet some state

requirements are the $5,000 total assetsminimum that requires completion of PartII, column (c), and Part XV; and the$50,000 minimum for listing the highestpaid employees and for listingprofessional fees in Part VIII.Additional information may berequired. State and local filingrequirements may require attaching toForm 990-PF one or more of thefollowing:q Additional financial statements, suchas a complete analysis of functional

expenses or a statement of changes innet assets,q Notes to financial statements,q Additional financial schedules,q A report on the financial statements byan independent accountant, andq Answers to additional questions andother information.

Each jurisdiction may require theadditional material to be presented onforms they provide. The additional

information does not have to be submittedwith the Form 990-PF filed with the IRS.If required information is not provided

to a state, the organization may be askedby the state to provide it or to submit anamended return, even if the Form 990-PFis accepted by the IRS as complete.Amended returns. If the organizationsubmits supplemental information or filesan amended Form 990-PF with the IRS,it must also include a copy of theinformation or amended return to anystate with which it filed a copy of Form990-PF.Method of accounting. Many statesrequire that all amounts be reported

based on the accrual method ofaccounting.Time for filing may differ. The time forfiling Form 990-PF with the IRS may differfrom the time for filing state reports.

G. Furnishing Copies ofForm 990-PF to StateOfficialsThe foundation managers must furnish acopy of the annual return Form 990-PF(and Form 4720 (if applicable)) to theattorney general of:

1. Each state required to be listed inPart VII-A, line 8a,

2. The state in which the foundation'sprincipal office is located, and

3. The state in which the foundationwas incorporated or created.

A copy of the annual return must besent to the attorney general at the sametime the annual return is filed with theIRS.Other requirements. If the attorneygeneral or other appropriate state officialof any state requests a copy of the annualreturn, the foundation managers mustgive them a copy of the annual return.Exceptions. These rules do not apply toany foreign foundation which, from the

date of its creation, has received at least85% of its support (excluding grossinvestment income) from sources outsidethe United States. (See Exceptions inGeneral Instruction Q for other exceptionsthat affect this type of organization.)Coordination with state reportingrequirements. If the foundationmanagers submit a copy of Form 990-PFand Form 4720 (if applicable) to a stateattorney general to satisfy a statereporting requirement, they do not haveto furnish a second copy to that attorneygeneral to comply with the Internal

Revenue Code requirements discussed inthis section.

If there is a state reporting requirementto file a copy of Form 990-PF with a stateofficial other than the attorney general(such as the secretary of state), then thefoundation managers must also send acopy of the Form 990-PF and Form 4720(if applicable) to the attorney general ofthat state.

H. Accounting Period

1. File the 1999 return for the calendaryear 1999 or fiscal year beginning in1999. If the return is for a fiscal year, fillin the tax year space at the top of thereturn.

2. The return must be filed on thebasis of the established annualaccounting period of the organization. Ifthe organization has no establishedaccounting period, the return should beon the calendar-year basis.

3. For initial or final returns or achange in accounting period, the 1999form may also be used as the return fora short period (less than 12 months)

ending November 30, 2000, or earlier.In general, to change its accounting

period the organization must file Form990-PF by the due date for the shortperiod resulting from the change. At thetop of this short period return, write“Change of Accounting Period.”

If the organization changed itsaccounting period within the10-calendar-year period that includes thebeginning of the short period, and it hada Form 990-PF filing requirement at anytime during that 10-year period, it mustalso attach a Form 1128 to theshort-period return. See Rev. Proc. 85-58,1985-2 C.B. 740.

I. Accounting MethodsGenerally, you should report the financialinformation requested on the basis of theaccounting method the foundationregularly uses to keep its books andrecords.Exception. Complete Part I, column (d)on the cash receipts and disbursementsmethod of accounting.Change required by Statement ofFinancial Accounting Standards(SFAS) No. 116. Foundations that arechanging their methods of accounting forFederal income tax purposes to comply

with SFAS No.116 are not required to fileForm 3115, Application for Change inAccounting Method. Foundations maychange to the methods described in SFASNo. 116 for Federal income tax purposesfor any tax year beginning after December15, 1994, by reflecting the change in themanner described in Notice 96-30, 1996-1C.B. 378.

J. When and Where To FileThis return must be filed by the 15th dayof the 5th month following the close of the




foundation's accounting period. If theregular due date falls on a Saturday,Sunday, or legal holiday, file on the nextbusiness day. If the return is filed late, seeGeneral Instruction M.

In case of a complete liquidation,dissolution, or termination, file the returnby the 15th day of the 5th month followingcomplete liquidation, dissolution, ortermination.

To file the return, mail or deliver it to:Internal Revenue Service CenterOgden, UT 84201–0027

K. Extension of Time To FileA foundation uses Form 2758 to requestan extension of time to file its return.

Requests for extension of time to fileare not automatically granted. If a requestis granted, generally, the extension oftime to file will not be for more than 90days. The total time granted to anydomestic organization for all extensionrequests will not exceed 6 months. SeeForm 2758 for more information.

L. Amended ReturnTo change the organization's return forany year, file an amended return,including attachments, with the correctinformation. The amended return mustprovide all the information required by theform and instructions, not just the new orcorrected information. Write “AmendedReturn” at the top of the return.

If the organization files an amendedreturn to claim a refund of tax paid undersection 4940 or 4948, it must file theamended return within 3 years after thedate the original return was due or filed,or within 2 years from the date the taxwas paid, whichever date is later.

State reporting requirements. SeeAmended returns under GeneralInstruction F.Need a copy of an old return or form?Use Form 4506-A to obtain a copy of apreviously filed return. You can obtainblank forms for prior years by calling1-800-TAX-FORM (1-800-829-3676).

M. Penalty for Failure To FileTimely, Completely, orCorrectlyAgainst the organization. If anorganization does not file timely andcompletely, or does not furnish the correctinformation, it must pay $20 for each daythe failure continues ($100 a day if it is alarge organization), unless it can showthat the failure was due to reasonablecause. Those filing late (after the duedate, including extensions) must attachan explanation to the return. Themaximum penalty for each return will notexceed the smaller of $10,000 ($50,000for a large organization) or 5% of thegross receipts of the organization for theyear.

Large organization. A largeorganization is one that has gross receiptsexceeding $1 million for the tax year.Against the responsible person. TheIRS will make written demand that thedelinquent return be filed or theinformation furnished within a reasonabletime after the mailing of the notice of thedemand. The person failing to comply withthe demand on or before the datespecified will have to pay $10 for eachday the failure continues, unless there is

reasonable cause. The maximum penaltyimposed on all persons for any one returnis $5,000. If more than one person isliable for any failures, all such persons are

jointly and severally liable for such failures(see section 6652(c)).

To avoid filing an incomplete return orhaving to respond to requests for missinginformation, complete all applicable lineitems; answer “Yes,” “No,” or “N/A” (notapplicable) to each question on the return;make an entry (including a zero whenappropriate) on all total lines; and enter“None” or “N/A” if an entire part does notapply.

Because this return also satisfies the

filing requirements of a tax return undersection 6011 for the tax on investmentincome imposed by section 4940 (or 4948if an exempt foreign organization), thepenalties imposed by section 6651 for notfiling a return (without reasonable cause)also apply.

There are also penalties for willfulfailure to file and for filing fraudulentreturns and statements. See sections7203, 7206, and 7207.

N. Penalties for Not PayingTax on TimeThere is a penalty for not paying tax when

due (section 6651). The penalty generallyis 1 / 2 of 1% of the unpaid tax for eachmonth or part of a month the tax remainsunpaid, not to exceed 25% of the unpaidtax. If there was reasonable cause for notpaying the tax on time, the penalty canbe waived. However, interest is chargedon any tax not paid on time, at the rateprovided by section 6621.Estimated tax penalty. The section 6655penalty for failure to pay estimated taxapplies to the tax on net investmentincome of domestic private foundationsand section 4947(a)(1) nonexemptcharitable trusts. The penalty also appliesto any tax on unrelated business income

of a private foundation. Generally, if aprivate foundation's tax liability is $500 ormore and it did not make the requiredpayments on time, then it is subject to thepenalty.

For more details, see the discussionof Form 2220 in General Instruction D.

O. Figuring and PayingEstimated TaxA domestic exempt private foundation, adomestic taxable private foundation, or a

nonexempt charitable trust treated as aprivate foundation must make estimatedtax payments for the excise tax based oninvestment income if it can expect itsestimated tax (section 4940 tax minusallowable credits) to be $500 or more. Thenumber of installment payments it mustmake under the depository method isdetermined at the time during the yearthat it first meets this requirement. Forcalendar-year taxpayers, the first depositof estimated taxes for a year generally

should be made by May 15 of the year.Although Form 990-W is used primarily

to compute the installment payments ofunrelated business income tax, it is alsoused to determine the timing and amountsof installment payments of the section4940 tax based on investment income.Compute separately any requireddeposits of excise tax based oninvestment income and unrelatedbusiness income tax.

To figure the estimated tax for theexcise tax based on investment income,apply the rules of Part VI to your tax year2000 estimated amounts for that part.Enter the tax you figured on line 9a of

Form 990-W.The Form 990-W line items and

instructions for large organizations alsoapply to private foundations. For purposesof paying the estimated tax on netinvestment income, a “large organization”is one that had net investment income of$1 million or more for any of the 3 taxyears immediately preceding the tax yearinvolved.Penalty. A foundation that does not paythe proper estimated tax when due maybe subject to the estimated tax penalty forthe period of the underpayment. (Seesections 6655(b) and (d) and the Form2220 instructions.)

Special Rules

Section 4947(a)(1) nonexemptcharitable trusts should use Form1041-ES for paying any estimated tax onincome subject to tax under section 1.Form 1041-ES also contains theestimated tax rules for paying the tax onthat income.Taxable private foundations should useForm 1120-W for figuring any estimatedtax on income subject to tax under section11. Form 1120-W contains the estimatedtax rules for paying the tax on thatincome.

P. Tax Payment Methods forDomestic PrivateFoundationsWhether the foundation uses thedepository method of tax payment or thespecial option for small foundations, itmust pay the tax due (see Part VI) in fullby 15th day of the 5th month after the endof its tax year.




Depository Method of Tax Payment

Some foundations (described below) arerequired to electronically deposit alldepository taxes, including their taxpayments for the excise tax based oninvestment income.

Electronic Deposit Requirement

The foundation must make electronicdeposits of all depository tax liabilities thatoccured after 1999 if it deposited, in 1998,more than $200,000 in all Federaldepositary taxes (such as employment taxor the excise tax based on investmentincome). If the foundation is alreadydepositing electronically but its depositsdid not exceed $200,000 in 1998, thefoundation may continue to do so or itmay make deposits with Form 8109,Federal Tax Deposit Coupon.Foundations that exceed the new$200,000 threshold in 1998 must continueto deposit electronically in all later years.

The Electronic Federal Tax PaymentSystem (EFTPS) must be used to makeelectronic deposits. If the foundation isrequired to make electronic deposits andfails to do so, it may be subject to a 10%penalty.

A foundation that is not required tomake electronic deposits may voluntarilyparticipate in EFTPS. To enroll in EFTPS,call 1-800-555-4477 or 1-800-945-8400.For general information about EFTPS, call1-800-829-1040.

Deposits With Form 8109

If the foundation does not use EFTPS,deposit estimated tax payments and anybalance due for the excise tax based oninvestment income with Form 8109. Donot send deposits directly to an IRS office.Mail or deliver the completed Form 8109with the payment to a qualified depositaryfor Federal taxes or to the FederalReserve bank (FRB) servicing thefoundation's geographic area. Makechecks or money orders payable to thatdepositary or FRB. To help ensure propercrediting, write the foundation's employeridentification number (EIN), the tax periodto which the deposit applies, and “Form990-PF” on the check or money order. Besure to darken the “990-PF” box on thecoupon. Records of these deposits will besent to the IRS.

A penalty may be imposed if thedeposits are mailed or delivered to an IRSoffice rather than to an authorizeddepositary or FRB. For more informationon deposits, see the instructions in thecoupon booklet (Form 8109) and Pub.583, Starting a Business and KeepingRecords.

Special Payment Option for SmallFoundations

A private foundation may enclose a checkor money order, payable to the UnitedStates Treasury, with the Form 990-PF

or Form 2758, if it meets all of thefollowing requirements.

1. The foundation must not berequired to use EFTPS.

2. The tax based on investmentincome shown on line 5, Part VI of Form990-PF is less than $500.

3. If Form 2758 is used, the amountentered on line 5a must be less than $500and it must be the full balance due.

Be sure to write “1999 Form 990-PF”and the foundation's name, address, andEIN on its check or money order.

CAUTION

!Foreign organizations should see the instructions for Part VI, line 9.

Q. Public InspectionRequirements

Requirements Placed on theOrganization

Information reported on Form 990-PF,including all attachments, is available forpublic inspection under section 6104(b).This applies both to information required

by the form and to voluntary information.Therefore, the return and anyattachments should be reproducible.

Annual Returns

CAUTION

!These rules will not apply to any return for which the due date is after the effective date of the new

rules. See Annual Returns (New Rules).

Foundation managers must make theannual return available for inspectionduring regular business hours at theprincipal office of the foundation, or maygive a free copy to any person requestinginspection, if the request is made at thetime and in the manner prescribed insection 6104(d) and the relatedregulations.Notice requirements. A notice that theprivate foundation's return is available forinspection must be published. The noticemust:q Be published by the due date (includingextensions) for filing the return,q Be published in a newspaper withgeneral circulation in the county in whichthe private foundation's principal office islocated,q State that the private foundation'sreturn is available for inspection at itsprincipal office during regular business

hours by any citizen who requestsinspection within 180 days after the noticeis published,q Show the address and telephonenumber of the private foundation'sprincipal office, andq Show the name of the privatefoundation's principal manager.

A private foundation may designate, inaddition to its principal office, any otherlocation where its return will be available.

If the foundation has no principal officeor none other than the residence of afoundation manager or substantialcontributor, then another appropriatelocation may be designated. Also, thefoundation may furnish a copy free of anycharges to the person requesting aninspection in the manner and at the timeprescribed instead of providing a place toinspect the return.

Attachment. A copy of the newspapernotice must be attached to the Form

990-PF that the foundation files with theInternal Revenue Service.

Newspaper with general circulation.A newspaper or journal that publishes realestate title transfers or other similar legalnotices to satisfy state law requirementsis considered to have general circulation.

180-day inspection period. Toensure that the return is available forpublic inspection for the full 180-dayperiod, do not publish the notice until thereturn has been completed and isavailable for inspection upon request.Penalties. If a foundation does not attacha copy of the notice to a timely filedreturn, it may be subject to the penaltydiscussed in “Against the organization”under section M. Also, the responsibleperson may be subject to the penaltydiscussed in “Against the responsibleperson” under section M.

A penalty may be imposed on anyperson who does not make the return(including all required attachments)available for public inspection accordingto the section 6104(d) provisionsdiscussed above under Annual Returns.If more than one person fails to comply,each person is jointly and severally liablefor the full amount of the penalty. Thepenalty amount is $20 for each day duringwhich a failure continues. The maximumpenalty that may be imposed on allpersons for any 1 return is $10,000.

Any person who willfully fails to complywith the section 6104(d) public inspectionrequirements is subject to an additionalpenalty of $1,000 (section 6685).Exceptions. A private foundation thathas terminated its status as such undersection 507(b)(1)(A), by distributing all itsnet assets to one or more public charitieswithout keeping any right, title, or interestin those assets, does not have to publishnotice of availability of its annual returnor furnish the return to the public for thetax year in which it terminates(Regulations section 1.507-2(a)(6)).

The notice and public inspectionprovisions discussed above do not applyto any foreign foundation that, from thedate of its creation, has received at least85% of its support (excluding grossinvestment income) from sources outsidethe United States. The requirement tofurnish copies of annual returns to stateofficials also does not apply to suchforeign foundations (see GeneralInstruction G).




Annual Returns (New Rules)

CAUTION

!See Effective date to find out when these rules take effect.

A private foundation must make itsannual return available for publicinspection. Once these rules take effect,the newspaper notice requirement will beeliminated.How to make the annual returnavailable. Public inspection must be

made available in 2 ways:1. Office visitation, and2. Providing copies.

Office visitation. A copy of the annualreturn must be available for immediateinspection at the private foundation'sprincipal office. Also, immediateinspection must be available at certainregional or district offices having 3 ormore employees.

Providing copies. A copy of theannual return can be asked for in writingor in person at the private foundation'sprincipal office (or regional or district officehaving 3 or more employees). Theprivate foundation must provide a copyimmediately if the request is made inperson. If the request is made in writing,the private foundation must provide acopy within 30 days. No charge can bemade other than a reasonable fee forreproduction costs and actual postage.Limitations

On inspections. Public inspection ofannual returns only applies to annualreturns for a 3-year period. The periodbegins on the due date of the return(including extensions).

On providing copies. A privatefoundation does not have to providecopies if it follows certain rules to be

issued by Treasury. These rules willrelieve the private foundation fromproviding copies if it:q Makes the requested documents widelyavailable, orq Applies and receives relief fromproviding copies because the request forcopies is part of a harassment campaignand complying with the request is not inthe public interest.Exceptions. A private foundation thathas terminated its status as such undersection 507(b)(1)(A), by distributing all itsnet assets to one or more public charitieswithout keeping any right, title, or interestin those assets, does not have to follow

the public inspection rules for the tax yearin which it terminates (Regulations section1.507-2(a)(6)).

The public inspection provisionsdiscussed above do not apply to anyforeign foundation that, from the date ofits creation, has received at least 85% ofits support (excluding gross investmentincome) from sources outside the UnitedStates. The requirement to furnish copiesof annual returns to state officials alsodoes not apply to such foreignfoundations (see General Instruction G).

Penalties. A penalty may be imposed onany person who does not make the return(including all required attachments)available for public inspection accordingto the section 6104(d) rules discussedabove. If more than one person fails tocomply, each person is jointly andseverally liable for the full amount of thepenalty. The penalty amount is $20 foreach day during which a failure continues.The maximum penalty that may beimposed on all persons for any 1 return is

$10,000.Any person who willfully fails to comply

with the section 6104(d) public inspectionrequirements is subject to an additionalpenalty of $5,000 (section 6685).Effective date. These rules take effectthe 60th day after Treasury issues theregulations referred to in section6104(d)(4).

Exemption Applications

CAUTION

!The New rules (and not the rules in the following paragraph) apply to requests made after the 60th day

after Treasury issues regulations referred to in section 6104(d)(4).

Any section 501(c) organization thatfiled an application for recognition ofexemption to the Internal RevenueService after July 15, 1987, must makeavailable for public inspection a copy of itsapplication (and any papers submitted insupport of its application) and any letteror other document issued by the IRS inresponse to the application. Anorganization that filed its exemptionapplication on or before July 15, 1987,must comply with this requirement if it hada copy of its application on July 15, 1987.The copy of the application and relateddocuments must be made available forinspection during regular business hoursat the organization's principal office andat each of its regional or district officeshaving at least three employees.Penalties. Any person who does notcomply with the requirement for publicinspection of applications will be chargeda penalty for each day that inspection wasnot permitted. There is no limitation. Nopenalty will be imposed if the failure is dueto reasonable cause. If more than oneperson is responsible for failure to complywith this requirement, each person is

jointly and severally liable for the fullamount of the penalty.

Any person who willfully fails to complyis subject to an additional penalty of$1,000.New rules. The rules discussed underHow to make the annual returnavailable and On providing copies alsoapplies to the exempt status applicationmaterials. When reading these rules,substitute “exempt status applicationmaterials” for “annual returns.”

Exempt status application materialsmeans:

1. The application for recognition ofexemption,

2. Any papers sent in support of theapplication, and

3. Any letter or document issued bythe IRS that relates to the application.

The same penalties discussed abovealso apply to these rules. However, theadditional penalty for willfully failing tocomply is $5,000 (not $1,000).

Requirements Placed on the IRS

Both exempt organization returns andapproved exemption applications may be

inspected by the public at IRS districtoffices and at the IRS National Office inWashington, DC.

A request for inspection must be inwriting and must include the name andaddress (city and state) of theorganization that filed the return orapplication. A request to inspect a returnshould indicate the type (number) of thereturn and the year(s) involved. Therequest should be sent to the DistrictDirector (Attention: Disclosure Officer) ofthe district in which the requester wantsto inspect the return or application. If therequester wants the inspection at the IRSNational Office, the request should be

sent to the following address.Commissioner of Internal RevenueAttention: Freedom of Information

Reading Room1111 Constitution Ave., NWWashington, DC 20224

Form 4506-A can be used to request acopy or to inspect an exempt organizationreturn at an IRS office. There is a chargefor photocopying.

R. Disclosures RegardingCertain Information andServices Furnished

A section 501(c) organization that offersto sell or solicits money for specificinformation or a routine service to anyindividual that could be obtained by theindividual from a Federal Governmentagency free or for a nominal charge mustdisclose that fact conspicuously whenmaking such offer or solicitation.

Any organization that intentionallydisregards this requirement will be subjectto a penalty for each day the offers orsolicitations are made. The penalty is thegreater of $1,000 or 50% of the total costof the offers and solicitations made onthat day.

S. Organizations Organizedor Created in a ForeignCountry or U.S. PossessionIf you apply any provision of any U.S. taxtreaty to compute the foundation's taxableincome, tax liability, or tax credits in amanner different from the 990-PFinstructions, attach an explanation.

Regulations section 53.4948-1(b)states that sections 507, 508, andChapter 42 (other than section 4948) donot apply to a foreign private foundation




that from the date of its creation hasreceived at least 85% of its support (asdefined in section 509(d), other thansection 509(d)(4)) from sources outsidethe United States.

Section 4948(a) imposes a 4% tax onthe gross investment income from U.S.sources (i.e., income from dividends,interest, rents, payments received onsecurities loans (as defined in section512(a)(5)), and royalties not reported onForm 990-T of an exempt foreign private

foundation. This tax replaces the section4940 tax on the net investment incomeof a domestic private foundation. To payany tax due, see the instructions for PartVI, line 9.

Taxable foreign private foundations andforeign section 4947(a)(1) nonexemptcharitable trusts are not subject to theexcise taxes under sections 4948(a) and4940, but are subject to income tax undersubtitle A of the Code.

Certain foreign foundations are notrequired to send copies of annual returnsto state officials, or comply with the publicinspection and notice requirements ofannual returns. (See General Instructions

G and Q.)

T. Liquidation, Dissolution,Termination, or SubstantialContractionIf there is a liquidation, dissolution,termination, or substantial contraction(defined below) of the organization,attach:

1. A statement to the returnexplaining it,

2. A certified copy of the liquidationplan, resolution, etc. (if any) and allamendments or supplements that were

not previously filed,3. A schedule that lists the names andaddresses of all recipients of assets, and

4. An explanation of the nature andfair market value of the assets distributedto each recipient.Additional requirements. For acomplete corporate liquidation or trusttermination, attach a statement as towhether a final distribution of assets wasmade and the date it was made (ifapplicable).

Also, if the organization:q Has ceased to exist, write “FinalReturn” at the top of page 1 of the return.q Is terminating its private foundationstatus under section 507(b)(1)(B), seeGeneral Instructions U and V.Relief from public inspectionrequirements. If the organization hasterminated its private foundation statusunder section 507(b)(1)(A), it does nothave to comply with the notice and publicinspection requirements of their return forthe termination year (see Exceptions inGeneral Instruction Q).

Filing date. See General Instruction J forthe filing date.Definitions. The term substantialcontraction includes any partialliquidation or any other significant disposition of assets. However, this doesnot include transfers for full and adequateconsideration or distributions of currentincome.

A significant disposition of assetsdoes not include any disposition for a taxyear if:

1. The total of the dispositions for thetax year is less than 25% of the fairmarket value of the net assets of theorganization at the beginning of the taxyear, and

2. The total of the related dispositionsmade during prior tax years (if adisposition is part of a series of relateddispositions made during these prior taxyears) is less than 25% of the fair marketvalue of the net assets of the organizationat the beginning of the tax year in whichany of the series of related dispositionswas made.

The facts and circumstances of theparticular case will determine whether asignificant disposition has occurredthrough a series of related dispositions.Ordinarily, a distribution described insection 170(b)(1)(E)(ii) (relating to privatefoundations making qualifyingdistributions out of corpus equal to 100%of contributions received during thefoundation's tax year) will not be takeninto account as a significant dispositionof assets. See Regulations section1.170A-9(g)(2).

U. Filing RequirementsDuring Section 507(b)(1)(B)TerminationAlthough an organization terminating itsprivate foundation status under section507(b)(1)(B) may be regarded as a publiccharity for certain purposes, it isconsidered a private foundation for filingrequirement purposes and it must file anannual return on Form 990-PF. The returnmust be filed for each year in the60-month termination period, if that periodhas not expired before the due date of thereturn.

Regulations under section 507(b)(1)(B)(iii) specify that within 90 days after theend of the termination period theorganization must supply information to its

key district director establishing that it hasterminated its private foundation statusand, therefore, qualifies as a publiccharity. If information is furnishedestablishing a successful termination,then, for the final year of the terminationperiod, the organization should complywith the filing requirements for the typeof public charity it has become. See theInstructions for Form 990 and ScheduleA (Form 990) for details on filingrequirements. This applies even if the key

district has not confirmed that theorganization has terminated its privatefoundation status by the time the returnfor the final year of the termination is due(or would be due if a return wererequired).

The organization will be allowed areasonable period of time to file anyprivate foundation returns required (forthe last year of the termination period) butnot previously filed if it is later determinedthat the organization did not terminate its

private foundation status. Interest on anytax due will be charged from the originaldue date of the Form 990-PF, butpenalties under sections 6651 and 6652will not be assessed if the Form 990-PFis filed within the period allowed by thekey district.

V. Special Rules for Section507(b)(1)(B) TerminationsIf the organization is terminating its privatefoundation status under the 60-monthprovisions of section 507(b)(1)(B), specialrules apply. (See General Instructions Tand U.) Under these rules, the

organization may file Form 990-PFwithout paying the tax based oninvestment income if it filed a consentunder section 6501(c)(4) with itsnotification to the district director of itsintention to begin a section 507(b)(1)(B)termination. The consent provides that theperiod of limitation on the assessment ofexcise tax under section 4940 or 4948based on investment income for any taxyear in the 60-month period will not expireuntil at least 1 year after the period forassessing a deficiency for the last taxyear in which the 60-month period wouldnormally expire. Any foundation notpaying the tax when it files Form 990-PF

must attach a copy of the signed consent.If the foundation did not file theconsent, the tax must be paid in thenormal manner as explained in GeneralInstructions O and P. The organizationmay file a claim for refund aftercompleting termination or during thetermination period. The claim for refundmust be filed on time and the organizationmust supply information establishing thatit qualified as a public charity for theperiod for which it paid the tax.

W. Rounding, Currency, andAttachments

Rounding off to whole-dollar amounts.You may show the money items on thereturn and accompanying schedules aswhole-dollar amounts. To do so, drop anyamount less than 50 cents and increaseany amount from 50 cents through 99cents to the next higher dollar.Currency and language requirements.Report all amounts in U.S. dollars (stateconversion rate used). Report all items intotal, including amounts from both U.S.and non-U.S. sources. All informationmust be in English.




Attachments. Use the schedules onForm 990-PF. If you need more spaceuse attachments that are the same sizeas the printed forms.

On each attachment, write:q “Form 990-PF,”q The tax year,q The corresponding schedule numberor letter,q The organization's name and EIN, andq The information requested using the

format and line sequence of the printedform.Also, show totals on the printed forms.

Specific Instructions

Completing the HeadingThe following instructions are keyed toitems in the Form 990-PF heading.

Name and Address

If the organization received a Form990-PF package from the IRS with apeel-off label, please use it. If the name

or address on the label is wrong, makecorrections on the label. The addressused must be that of the principal officeof the foundation.

Include the suite, room, or other unitnumber after the street address. If thePost Office does not deliver mail to thestreet address and the organization hasa P.O. box, show the box number insteadof the street address.

A—Employer IdentificationNumber

The organization should have only oneemployer identification number. If it hasmore than one number, notify the InternalRevenue Service Center at theappropriate address shown underGeneral Instruction J. Explain whatnumbers the organization has, the nameand address to which each number wasassigned, and the address of theorganization's principal office. The IRSwill then advise which number to use.

B—Telephone Number

Enter a foundation telephone number(including the area code) that the publicand government regulators may use toobtain information about the foundation'sfinances and activities. This informationshould be available at this telephonenumber during normal business hours. Ifthe foundation does not have a telephone,enter a telephone number of a foundationofficial who can provide this informationduring normal business hours.

D2—Foreign Organizations

If the foreign organization meets the 85%test of Regulations section 53.4948-1(b),then:

1. Check the box in D2 on page 1 ofForm 990-PF,

2. Check the box at the top of Part XI,

3. Do not fill in Parts XI and XIII,4. Do not fill in Part X unless it is

claiming status as a private operatingfoundation, and

5. Attach the computation of the 85%test to Form 990-PF.

E—Section 507(b)(1)(A)Terminations

A private foundation that has terminatedits status as such under section507(b)(1)(A), by distributing all its netassets to one or more public charitieswithout keeping any right, title, or interestin those assets, should check the box inE on page 1 of Form 990-PF. SeeGeneral Instructions T and Q.

F—60-Month Termination UnderSection 507(b)(1)(B)

Check the box in F on page 1 of Form990-PF if the organization is terminatingits private foundation status under the60-month provisions of section507(b)(1)(B) during the period covered bythis return. To begin such a termination,a private foundation must have givenadvance notice to its key district directorand provided the information outlined inRegulations section 1.507-2(b)(3). SeeGeneral Instruction U for informationregarding filing requirements during asection 507(b)(1)(B) termination.

See General Instruction V forinformation regarding payment of the taxbased on investment income (computedin Part VI) during a section 507(b)(1)(B)termination.

H—Type of Organization

Check the box for “Section 501(c)(3)exempt private foundation” if thefoundation has a ruling or determination

letter from the IRS in effect thatrecognizes its exemption from Federalincome tax as an organization describedin section 501(c)(3) or if the organization'sexemption application is pending with theIRS.

Check the “Section 4947(a)(1)nonexempt charitable trust” box if the trustis a nonexempt charitable trust treated asa private foundation. All others, check the“Other taxable private foundation” box.

I—Fair Market Value of All Assets

In block I on page 1 of Form 990-PF,enter the fair market value of all assetsthe foundation held at the end of the tax

year.

TIP

This amount should be the same as the figure reported in Part II,column (c), line 16.

Part I—Analysis of Revenueand Expenses

Column Instructions

The total of amounts in columns (b), (c),and (d) may not necessarily equal theamounts in column (a).

The amounts entered in column (a) andon line 5b must be analyzed in PartXVI-A.

Column (a)—Revenue and Expensesper Books

Enter in column (a) all items of revenueand expense shown in the books andrecords that increased or decreased thenet assets of the organization. However,do not include the value of servicesdonated to the foundation, or items such

as the free use of equipment or facilities,in contributions received. Also, do notinclude any expenses used to computecapital gains and losses on lines 6, 7, and8 or expenses included in cost of goodssold on line 10b.

Column (b)—Net Investment Income

All domestic private foundations (includingsection 4947(a)(1) nonexempt charitabletrusts) are required to pay an excise taxeach tax year on net investment income.

Exempt foreign foundations are subjectto an excise tax on gross investmentincome from U.S. sources. These foreignorganizations should complete lines 3, 4,

5, 11, 12, and 27b of column (b) andreport only income derived from U.S.sources. No other income should beincluded. No expenses are allowed asdeductions.Definitions

Gross investment income means thetotal amount of investment income thatwas received by a private foundation fromall sources. However, it does not includeany income subject to the unrelatedbusiness income tax. It includes interest,dividends, rents, payments with respectto securities loans (as defined in section512(a)(5)), royalties received from assetsdevoted to charitable activities, income

from notional principal contracts (asdefined in Regulations section 1.863-7),and other substantially similar incomefrom ordinary and routine investmentsexcluded by section 512(b)(1). Therefore,interest received on a student loan isincludible in the gross investment incomeof a private foundation making the loan.

Net investment income is the amountby which the sum of gross investmentincome and the capital gain net incomeexceeds the allowable deductionsdiscussed later. Tax-exempt interest ongovernmental obligations and relatedexpenses are excluded.Investment income. Include in column

(b) all or part of any amount from column(a) that applies to investment income.However, do not include in column (b) anyinterest, dividends, rents or royalties (andrelated expenses) that were reported onForm 990-T.

For example, investment income fromdebt-financed property unrelated to theorganization's charitable purpose andcertain rents (and related expenses)treated as unrelated trade or businessincome should be reported on Form990-T. Income from debt-financedproperty that is not taxed under section




511 is taxed under section 4940. Thus, ifthe debt/basis percentage of adebt-financed property is 80%, only 80%of the gross income (and expenses) forthat property is used to figure the section511 tax on Form 990-T. The remaining20% of the gross income (and expenses)of that property is used to figure thesection 4940 tax on net investmentincome on Form 990-PF. (See Form990-T and its instructions for moreinformation.)

Investment expenses. Include incolumn (b) all ordinary and necessaryexpenses paid or incurred to produce orcollect investment income from: interest,dividends, rents, amounts received frompayments on securities loans (as definedin section 512(a)(5)), royalties, incomefrom notional principal contracts, andother substantially similar income fromordinary and routine investmentsexcluded by section 512(b)(1); or for themanagement, conservation, ormaintenance of property held for theproduction of income that is taxable undersection 4940.

If any of the expenses listed in column

(a) are paid or incurred for bothinvestment and charitable purposes, theymust be allocated on a reasonable basisbetween the investment activities and thecharitable activities so that only expensesfrom investment activities appear incolumn (b). Examples of allocationmethods are given in the instructions forPart IX-A.

Limitation. The deduction forexpenses paid or incurred in any tax yearfor producing gross investment incomeearned incident to a charitable functioncannot be more than the amount ofincome earned from the function that isincludible as gross investment income for

the year.For example, if rental income is

incidentally realized in 1999 from historicbuildings held open to the public,deductions for amounts paid or incurredin 1999 for the production of this incomemay not be more than the amount ofrental income includible as grossinvestment income in column (b) for 1999.

Expenses related to tax-exempt interest. Do not include on lines 13–23of column (b) any expenses paid orincurred that are allocable to tax-exemptinterest that is excluded from lines 3and 4.

Column (c)—Adjusted Net Income

TIP

Nonoperating private foundations should see item 1 under Nonoperating private

foundations on page 10 to find out if they need to complete column (c).

Private operating foundations. Allorganizations that claim status as privateoperating foundations under section4942(j)(3) or (5) must complete all linesof column (c) that apply, according to the

general rules for income and expensesthat apply to this column, the specific lineinstructions for lines 3–27c, the Specialrule, and Examples 1 and 2 below.General rules. In general, adjusted netincome is the amount of a privatefoundation's gross income that is morethan the expenses of earning the income.The modifications and exclusionsexplained below are applied to grossincome and expenses in figuring adjustednet income.

For income and expenses, include oneach line of column (c) only that portionof the amount from column (a) that isapplicable to the adjusted net incomecomputation.

Income. For column (c), includeincome from charitable functions,investment activities, short-term capitalgains from investments, amounts setaside, and unrelated trade or businessactivities. Do not include gifts, grants, orcontributions, or long-term capital gainsor losses.

Expenses. Deductible expensesinclude the part of a private foundation'soperating expenses that is paid orincurred to produce or collect grossincome reported on lines 3–11 of column(c). If only part of the property producesincome includible in column (c),deductions such as interest, taxes, andrent must be divided between thecharitable and noncharitable uses of theproperty. If the deductions for propertyused for a charitable, educational, or othersimilar purpose are more than the incomefrom the property, the excess will not beallowed as a deduction but may betreated as a qualifying distribution in PartI, column (d). See Examples 1 and 2below.Special rule. The expenses attributableto each specific charitable activity, limitedby the amount of income from the activity,must be reported in column (c) on lines13–26. If the expenses of any charitableactivity exceed the income generated bythat activity, only the excess of theseexpenses over the income should bereported in column (d).

Examples.

1. A charitable activity generated$5,000 of income and $4,000 ofexpenses. Report all of the income andexpenses in column (c) and none incolumn (d).

2. A charitable activity generated

$5,000 of income and $6,000 ofexpenses. Report $5,000 of income and$5,000 of expenses in column (c) and theexcess expenses of $1,000 in column (d).Nonoperating private foundations. Thefollowing rules apply to nonoperatingprivate foundations.

1. If a nonoperating private foundationhas no income from charitable activitiesthat would be reportable on line 10 or line11 of Part I, it does not have to make anyentries in column (c).

2. If a nonoperating private foundationhas income from charitable activities, itmust report that income only on lines 10and/or 11 in column (c). Thesefoundations do not need to report otherkinds of income and expenses (such asinvestment income and expenses) incolumn (c).

3. If a nonoperating private foundationhas income that it reports on lines 10and/or 11, report any expenses relating tothis income following the general rules

and the special rule. See Examples 1 and2 above.

Column (d)—Disbursements forCharitable Purposes

Expenses entered in column (d) relate toactivities that constitute the charitablepurpose of the foundation.

For amounts entered in column (d):q Use the cash receipts anddisbursements method of accounting nomatter what accounting method is used inkeeping the books of the foundation.q Do not include any amount or part ofan amount that is included in column (b)or (c).q Include on lines 13–25 all expenses,including necessary and reasonableadministrative expenses, paid by thefoundation for religious, charitable,scientific, literary, educational, or otherpublic purposes, or for the prevention ofcruelty to children or animals.q Include a distribution of property at thefair market value on the date thedistribution was made.q Include only the part entered in column(a) that is allocable to the charitablepurposes of the foundation.

Example. An educational seminarproduced $1,000 in income that was

reportable in columns (a) and (c).Expenses attributable to this charitableactivity were $1,900. Only $1,000 ofexpense should be reported in column (c)and the remaining $900 in expenseshould be reported in column (d).Qualifying distributions. Generally, giftsand grants to organizations described insection 501(c)(3), that have beendetermined to be publicly supportedcharities (i.e., organizations that are notprivate foundations as defined in section509(a)), are qualifying distributions only ifthe granting foundation does not controlthe public charity.

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The total of the expenses and disbursements on line 26 is also entered on line 1a in Part XII to

figure qualifying distributions.

Alternative to completing lines 13–25.If you want to provide an analysis ofdisbursements that is more detailed thancolumn (d), you may attach a scheduleinstead of completing lines 13–25. Theschedule must include all the specificitems of lines 13–25, and the total fromthe schedule must be entered in column(d), line 26.




Line Instructions

Line 1—Contributions, gifts, grants,etc., received. Enter the total of grosscontributions, gifts, grants, and similaramounts received. If money, securities,or other property valued at $5,000 ormore was received directly or indirectlyfrom any one person during the year,attach a schedule showing the name andaddress of the person and the amountand date of each gift made during theyear.

To determine whether a person hascontributed $5,000 or more, total only giftsof $1,000 or more from each person.Separate and independent gifts need notbe totaled if less than $1,000. If acontribution is in the form of property,describe the property and include its fairmarket value.

The term “person” includes individuals,fiduciaries, partnerships, corporations,associations, trusts, and exemptorganizations.

An organization must keep records,required by the regulations under section170, for all its charitable contributions.

Change in accounting method to conform with SFAS 116. If the privatefoundation changed its accountingmethod for tax purposes to conform withSFAS 116 and part or all of its net assetadjustment (section 481(a) adjustment)represents contributions, then include inthe list of contributors that is attached tothe return any contributor of an amountthat is included in the adjustment andmeets the requirements above. Reportthe contributors that meet theserequirements in the year of the change.

Split-interest trusts. Contributionsfrom split-interest trusts should be enteredon both line 1 of column (a) and line 2 of

column (b). They are a part of the amounton line 1. Report contributions only onlines 1 and 2.

Substantiation requirements.Generally, a donor making a charitablecontribution of $250 or more will not beallowed a Federal income tax deductionunless the donor obtains a writtenacknowledgment from the doneeorganization by the earlier of the date onwhich the donor files a tax return for thetax year in which the contribution wasmade or the due date, includingextensions, for filing that return. However,see section 170(f)(8) and Regulationssection 1.170A-13 for exceptions to this

rule.The written acknowledgment thefoundation provides to the donor mustshow:

1. The amount of cash contributed,2. A description of any property

contributed,3. Whether the foundation provided

any goods or services to the donor, and4. A description and a good-faith

estimate of the value of any goods orservices the foundation gave in return forthe contribution, unless:

a. The goods and services haveinsubstantial value, or

b. A statement is included that thesegoods and services consist solely ofintangible religious benefits.

Generally, if a charitable organizationsolicits or receives a contribution of morethan $75 for which it gives the donorsomething in return (a quid pro quocontribution), the organization must informthe donor, by written statement, that theamount of the contribution deductible forFederal income tax purposes is limited tothe amount by which the contributionexceeds the value of the goods orservices received by the donor. Thewritten statement must also provide thedonor with a good-faith estimate of thevalue of goods or services given in returnfor the contribution.

Penalties. An organization that doesnot make the required disclosure for eachquid pro quo contribution will incur apenalty of $10 for each failure, not toexceed $5,000 for a particular fundraisingevent or mailing, unless it can showreasonable cause for not providing thedisclosure.

For more information. SeeRegulations section 1.170A-13 for moreinformation on charitable recordkeepingand substantiation requirements.Line 2—Certain contributions from“split-interest” trusts described insection 4947(a)(2). The income portionof distributions from split-interest truststhat was earned on amounts placed intrust after May 26, 1969, is treated asinvestment income. Include only theincome portion of these distributions online 2. That same figure is a part ofline 1.Line 3—Interest on savings and

temporary cash investments.In column (a), enter the total amountof interest income from investments of thetype reportable in Balance Sheets, Part II,line 2. These include savings or otherinterest-bearing accounts and temporarycash investments, such as money marketfunds, commercial paper, certificates ofdeposit, and U.S. Treasury bills or othergovernment obligations that mature inless than 1 year.

In column (b), enter the amount ofinterest income shown in column (a). Donot include interest on tax-exemptgovernment obligations.

In column (c), enter the amount of

interest income shown in column (a).Include interest on tax-exemptgovernment obligations.Line 4—Dividends and interest fromsecurities.

In column (a), enter the amount ofdividend and interest income fromsecurities (stocks and bonds) of the typereportable in Balance Sheets, Part II, line10. Include amounts received frompayments on securities loans, as definedin section 512(a)(5). Do not include anycapital gain dividends reportable on line6. Report income from program-related

investments on line 11. For debtinstruments with an original issuediscount, report the original issue discountratably over the life of the bond on line 4.See section 1272 for more information.

In column (b), enter the amount ofdividend and interest income, andpayments on securities loans from column(a). Do not include interest on tax-exemptgovernment obligations.

In column (c), enter the amount ofdividends and interest income, and

payments on securities loans from column(a). Include interest on tax-exemptgovernment obligations.Line 5a—Gross rents.

In column (a), enter the gross rentalincome for the year from investmentproperty reportable on line 11 of Part II.

In columns (b) and (c), enter the grossrental income from column (a).Line 5b—Net rental income or (loss).Figure the net rental income or (loss) forthe year and enter that amount on theentry line to the left of column (a).

Report rents from other sources on line11, Other income. Enter any expenses

attributable to the rental income reportedon line 5, such as interest anddepreciation, on lines 13–23.Line 6—Net gain or (loss) from sale ofassets. Enter the net gain or (loss) perbooks from all asset sales not includedon line 10.

For assets sold and not included in PartIV, attach a schedule showing:q Date acquired,q Manner of acquisition,q Gross sales price,q Cost, other basis, or value at time ofacquisition (if donated) and which of thesemethods was used,q

Date sold,q To whom sold,q Expense of sale and cost ofimprovements made subsequent toacquisition, andq Depreciation since acquisition (ifdepreciable property).Line 7—Capital gain net income. Enterthe capital gain net income from Part IV,line 2. See Part IV instructions.Line 8—Net short-term capital gain.

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Only private operating foundations report their short-term capital gains on line 8.

Include only net short-term capital gain

for the year (assets sold or exchangedthat were held not more than 1 year). Donot include a net long-term capital gainor a net loss in column (c).

Do not include on line 8 a net gain fromthe sale or exchange of depreciableproperty, or land used in a trade orbusiness (section 1231) and held for morethan 1 year. However, include a net lossfrom such property on line 23 as an Otherexpense.

In general, organizations may carry toline 8 the net short-term capital gainreported on Part IV, line 3. However, if the




foundation had any short-term capital gainfrom sales of debt-financed property, addit to the amount reported on Part IV, line3, to figure the amount to include on line8. For definition of “debt-financedproperty,” see the instructions for Form990-T.Line 9—Income modifications. Includeon this line:q Amounts received or accrued asrepayments of amounts taken intoaccount as qualifying distributions (see

the instructions for Part XII for anexplanation of qualifying distributions) forany year.q Amounts received or accrued from thesale or other disposition of property to theextent that the acquisition of the propertywas considered a qualifying distributionfor any tax year.q Any amount set aside for a specificproject (see explanation in the instructionsfor Part XII) that was not necessary for thepurposes for which it was set aside.q Income received from an estate, butonly if the estate was consideredterminated for income tax purposes dueto a prolonged administration period.q Amounts treated in an earlier tax yearas qualifying distributions to:

1. A nonoperating private foundation,if the amounts were not redistributed bythe grantee organization by the close ofits tax year following the year in which itreceived the funds, or

2. An organization controlled by thedistributing foundation or a disqualifiedperson if the amounts were notredistributed by the grantee organizationby the close of its tax year following theyear in which it received the funds.

Lines 10a, b, c—Gross profit fromsales of inventory. Enter the gross sales

(less returns and allowances), cost ofgoods sold, and gross profit or (loss) fromthe sale of all inventory items, includingthose sold in the course of special eventsand activities. These inventory items arethe ones the organization either makes tosell to others or buys for resale.

Do not report any sales or exchangesof investments on line 10.

Do not include any profit or (loss) fromthe sale of capital items such assecurities, land, buildings, or equipmenton line 10. Enter these amounts online 6.

Do not include any business expensessuch as salaries, taxes, rent, etc., on line10. Include them on lines 13–23.

Attach a schedule showing thefollowing items: Gross sales, Cost ofgoods sold, Gross profit or (loss). Theseitems should be classified according totype of inventory sold (such as books,tapes, other educational or religiousmaterial, etc.). The totals from theschedule should agree with the entries onlines 10a–10c.

In column (c), enter the gross profit or(loss) from sales of inventory shown incolumn (a), line 10c.

Line 11—Other income. Enter the totalof all the foundation's other income for theyear. Include all income not reported onlines 1 through 10c. See the instructionsfor Part XVI-A, line 11. Include imputedinterest on certain deferred paymentsfigured under section 483, and anyinvestment income not reportable on lines3 through 5, including income fromprogram-related investments (defined inthe instructions for Part IX-B). However,do not include unrealized gains and

losses on investments carried at marketvalue. Report those as fund balance ornet asset adjustments in Part III. Attach aschedule showing the description andamount of the income.

In column (b), enter the amount ofinvestment income included in line 11,column (a). Include dividends, interest,rents, and royalties derived from assetsdevoted to charitable activities, such asinterest on student loans.

In column (c), include all other itemsincludible in adjusted net income notcovered elsewhere in column (c).Line 12—Total.—In column (b),domestic organizations should enter the

total of lines 2–11. Exempt foreignorganizations, enter the total of lines 3,4, 5, and 11 only.Line 13—Compensation of officers,directors, trustees, etc.

In column (a), enter the totalcompensation for the year of all officers,directors, and trustees. If none was paid,enter zero. Complete line 1 of Part VIII toshow the compensation of officers,directors, trustees, and foundationmanagers.

In columns (b), (c), and (d), enter theportion of the compensation included incolumn (a) that is applicable to thecolumn. For example, in column (c) enterthe portion of the compensation includedin column (a) that was paid or incurred toproduce or collect income included incolumn (c).Line 14—Other employee salaries andwages. Enter the salaries and wages ofall employees other than those includedon line 13.Line 15—Contributions to employeepension plans and other benefits.Enter the employer's share of thecontributions the organization paid toqualified and nonqualified pension plansand the employer's share of contributionsto employee benefit programs (such as

insurance, health, and welfare programs)that are not an incidental part of a pensionplan. Complete the return/report of theForm 5500 series appropriate for theorganization's plan. (See the Instructionsfor Form 5500 for information aboutemployee welfare benefit plans requiredto file that form.)

Also include the amount of Federal,state, and local payroll taxes for the year,but only those that are imposed on theorganization as an employer. Thisincludes the employer's share of socialsecurity and Medicare taxes, FUTA tax,

state unemployment compensation tax,and other state and local payroll taxes.Do not include taxes withheld fromemployees' salaries and paid over to thevarious governmental units (such asFederal and state income taxes and theemployee's share of social security andMedicare taxes).Lines 16a, b, and c—Legal, accounting,and other professional fees. On theappropriate line(s), enter the amount oflegal, accounting, auditing, and other

professional fees (such as fees forfundraising or investment services)charged by outside firms andindividuals who are not employees of thefoundation.

Attach a schedule for lines 16a, b, andc. Show the type of service and amountof expense for each. If the same personprovided more than one of these services,include an allocation of those expenses.

Report any fines, penalties, or judgments imposed against thefoundation as a result of legalproceedings on line 23, Other expenses.Line 18—Taxes. Attach a schedule listingthe type and amount of each tax reportedon line 18. Do not enter any taxesincluded on line 15.

In column (a), enter the taxes paid (oraccrued) during the year. Include all typesof taxes recorded on the books, includingreal estate tax not reported on line 20; thetax on investment income; and anyincome tax.

In column (b), enter only those taxesincluded in column (a) that are related toinvestment income taxable under section4940. Do not include the section 4940 taxpaid or incurred on net investment incomeor the section 511 tax on unrelatedbusiness income. Sales taxes may not bededucted separately, but must be treatedas a part of the cost of acquired property,or as a reduction of the amount realizedon disposition of the property.

In column (c), enter only those taxesincluded in column (a) that relate toincome included in column (c). Do notinclude any excise tax paid or incurred onthe net investment income (as shown inPart VI), or any tax reported on Form990-T.

In column (d), do not include anyexcise tax paid on investment income (asreported in Part VI of this return or theequivalent part of a return for prior years)unless the organization is claiming status

as a private operating foundation andcompletes Part XIV.Line 19—Depreciation and depletion.

In column (a), enter the expenserecorded in the books for the year.

For depreciation, attach a scheduleshowing:

1. A description of the property,2. The date acquired,3. The cost or other basis (exclude

any land),4. The depreciation allowed or

allowable in prior years,




5. The method of computation,6. The rate (%) or life (years), and7. The depreciation this year.

On a separate line on the schedule,show the amount of depreciation includedin cost of goods sold and not included online 19.

In columns (b) and (c), a deduction fordepreciation is allowed only for propertyused in the production of income reportedin the column, and only using the straightline method of computing depreciation.A deduction for depletion is allowed butmust be figured only using the costdepletion method.

The basis used in figuring depreciationand depletion is the basis determinedunder normal basis rules, without regardto the special rules for using the fairmarket value on December 31, 1969, thatrelate only to gain or loss on dispositionsfor purposes of the tax on net investmentincome.Line 20—Occupancy. Enter the amountpaid or incurred for the use of office spaceor other facilities. If the space is rentedor leased, enter the amount of rent. If the

space is owned, enter the amount ofmortgage interest, real estate taxes, andsimilar expenses, but not depreciation(reportable on line 19). In either case,include the amount for utilities and relatedexpenses (e.g., heat, lights, water, power,telephone, sewer, trash removal, outside

janitorial services, and similar services).Do not include any salaries of theorganization's own employees that arereportable on line 14.Line 21—Travel, conferences, andmeetings. Enter the expenses forofficers, employees, or others during theyear for travel, attending conferences,meetings, etc. Include transportation

(including fares, mileage allowance, orautomobile expenses), meals andlodging, and related costs whether paidon the basis of a per diem allowance oractual expenses incurred. Do not includeany compensation paid to those whoparticipate.

In column (b), only 50% of theexpense for business meals, etc., paid orincurred in connection with travel,meetings, etc., relating to the productionof investment income, may be deductedin figuring net investment income (section274(n)).

In column (c), enter the total amountof expenses paid or incurred by officers,

employees, or others for travel,conferences, meetings, etc., related toincome included in column (c).Line 22—Printing and publications.Enter the expenses for printing orpublishing and distributing anynewsletters, magazines, etc. Also includethe cost of subscriptions to, or purchasesof, magazines, newspapers, etc.Line 23—Other expenses. Enter allother expenses for the year. Include allexpenses not reported on lines 13–22.Attach a schedule showing the type andamount of each expense.

If a deduction is claimed foramortization, attach a schedule showing:q Description of the amortized expenses;q Date acquired, completed, orexpended;q Amount amortized;q Deduction for prior years;q Amortization period (number ofmonths);q Current-year amortization; andq Total amount of amortization.

In column (c), in addition to theapplicable portion of expenses fromcolumn (a), include any net loss from thesale or exchange of land or depreciableproperty that was held for more than1 year and used in a trade or business.

A deduction for amortization is allowedbut only for assets used for the productionof income reported in column (c).Line 25—Contributions, gifts, grantspaid.

In column (a), enter the total of allcontributions, gifts, grants, and similaramounts paid (or accrued) for the year.List each contribution, gift, grant, etc., inPart XV, or attach a schedule of the itemsincluded on line 25 and list:

1. Each class of activity,2. A separate total for each activity,3. Name and address of donee,4. Relationship of donee if related by:a. Blood,b. Marriage,c. Adoption, ord. Employment (including children of

employees) to any disqualified person(see General Instruction C for definitions),and

5. The organizational status of donee(e.g., public charity—an organization

described in section 509(a)(1), (2), or (3)).You do not have to give the name ofany indigent person who received one ormore gifts or grants from the foundationunless that individual is a disqualifiedperson or one who received a total ofmore than $1,000 from the foundationduring the year.

Activities should be classified accordingto purpose and in greater detail thanmerely classifying them as charitable,educational, religious, or scientificactivities. For example, use identificationsuch as: payments for nursing service, forfellowships, or for assistance to indigentfamilies.

Foundations may include, as a singleentry on the schedule, the total ofamounts paid as grants for which thefoundation exercised expenditureresponsibility. Attach a separate report foreach grant.

When the fair market value of theproperty at the time of disbursement is themeasure of a contribution, the schedulemust also show:

1. A description of the contributedproperty,

2. The book value of the contributedproperty,

3. The method used to determine thebook value,

4. The method used to determine thefair market value, and

5. The date of the gift.

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The difference between fair market value and book value should be shown in the books of account and

as a net asset adjustment in Part III.

In column (d), enter on line 25 allcontributions, gifts, and grants thefoundation paid during the year.q Do not include contributions toorganizations controlled by the foundationor by a disqualified person (see GeneralInstruction C for definitions). Do notinclude contributions to nonoperatingprivate foundations unless the donees areexempt from tax under section 501(c)(3),they redistribute the contributions, andthey maintain sufficient evidence ofredistributions according to theregulations under section 4942(g).q Do not reduce the amount of grantspaid in the current year by the amount of

grants paid in a prior year that wasreturned or recovered in the current year.Report those repayments in column (c),line 9, and in Part XI, line 4a.q Do not include any payments ofset-asides (see instructions for Part XII,line 3) taken into account as qualifyingdistributions in the current year or anyprior year. All set-asides are included inqualifying distributions (Part XII, line 3) inthe year of the set-aside regardless ofwhen paid.q Do not include current year's write-offsof prior years' program-relatedinvestments. All program-relatedinvestments are included in qualifyingdistributions (Part XII, line 1b) in the yearthe investment is made.q Do not include any payments that arenot qualifying distributions as defined insection 4942(g)(1).

Net Amounts

Line 27a—Excess of revenue overexpenses. Subtract line 26, column (a),from line 12, column (a). Enter the result.Generally, the amount shown in column(a) on this line is also the amount bywhich net assets (or fund balances) haveincreased or decreased for the year. Seethe instructions for Part III, Analysis ofChanges in Net Assets or Fund Balances.Line 27b—Net investment income.Domestic organizations, subtract line 26from line 12. Enter the result. Exemptforeign organizations, enter the amountshown on line 12. However, if theorganization is a domestic organizationand line 26 is more than line 12 (i.e.,expenses exceed income), enter zero (nota negative amount).Line 27c—Adjusted net income.Subtract line 26, column (c) from line 12,column (c) and enter the result.




Part II—Balance SheetsFor column (b), show the book value atthe end of the year. For column (c), showthe fair market value at the end of theyear. Attached schedules must show theend-of-year value for each asset listed incolumns (b) and (c).q Foundations whose books of accountincluded total assets of $5,000 or moreat any time during the year must completeall of columns (a), (b), and (c).

q Foundations with less than $5,000 oftotal assets per books at all times duringthe year must complete all of columns (a)and (b), and only line 16 of column (c).

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A foundation that is changing its method of accounting to comply with SFAS No. 116 should not

restate its beginning of year statement of financial position (balance sheet) to reflect any prior period adjustments. See Part III—Analysis of Changes in Net Assets or Fund Balances to find where to show any adjustment required by section 481(a).

Line 1—Cash—Non-interest-bearing.Enter the amount of cash on deposit inchecking accounts, deposits in transit,change funds, petty cash funds, or anyother non-interest-bearing account. Donot include advances to employees orofficers or refundable deposits paid tosuppliers or others.Line 2—Savings and temporary cashinvestments. Enter the total of cash insavings or other interest-bearing accountsand temporary cash investments, such asmoney market funds, commercial paper,certificates of deposit, and U.S. Treasurybills or other governmental obligationsthat mature in less than 1 year.Line 3—Accounts receivable. On thedashed lines to the left of column (a),

enter the year-end figures for totalaccounts receivable and allowance fordoubtful accounts from the sale of goodsand/or the performance of services. Incolumns (a), (b), and (c), enter netamounts (total accounts receivablereduced by the corresponding allowancefor doubtful accounts). Claims againstvendors or refundable deposits withsuppliers or others may be reported hereif not significant in amount. (Otherwise,report them on line 15, Other assets.) Anyreceivables due from officers, directors,trustees, foundation managers, or otherdisqualified persons must be reported online 6. Report receivables (including loansand advances) due from other employeeson line 15.Line 4—Pledges receivable. On thedashed lines to the left of column (a),enter the year-end figures for totalpledges receivable and allowance fordoubtful accounts (pledges estimated tobe uncollectable). In columns (a), (b), and(c), enter net amounts (total pledgesreceivable reduced by the correspondingallowance for doubtful accounts).Line 5—Grants receivable. Enter thetotal grants receivable from governmentalagencies, foundations, and other

organizations as of the beginning and endof the year.Line 6—Receivables due from officers,directors, trustees, and otherdisqualified persons. Enter here (andon an attached schedule describedbelow) all receivables due from officers,directors, trustees, foundation managers,and other disqualified persons and allsecured and unsecured loans (includingadvances) to such persons. “Disqualifiedperson” is defined in General

Instruction C.Attached schedules. (a) On the

required schedule, report each loanseparately, even if more than one loanwas made to the same person, or thesame terms apply to all loans made.

Salary advances and other advancesfor the personal use and benefit of therecipient and receivables subject tospecial terms or arising from transactionsnot functionally related to the foundation'scharitable purposes must be reported asseparate loans for each officer, director,etc.

(b) Receivables that are subject to thesame terms and conditions (includingcredit limits and rate of interest) asreceivables due from the general publicfrom an activity functionally related to thefoundation's charitable purposes may bereported as a single total for all theofficers, directors, etc. Travel advancesmade for official business of theorganization may also be reported as asingle total.

For each outstanding loan or otherreceivable that must be reportedseparately, the attached schedule shouldshow the following information (preferablyin columnar form):

1. Borrower's name and title.

2. Original amount.3. Balance due.4. Date of note.5. Maturity date.6. Repayment terms.7. Interest rate.8. Security provided by the borrower.9. Purpose of the loan.

10. Description and fair market valueof the consideration furnished by thelender (e.g., cash—$1,000; or 100 sharesof XYZ, Inc., common stock— $9,000).

The above detail is not required forreceivables or travel advances that maybe reported as a single total (see (b)

above); however, report and identify thosetotals separately on the attachment.Line 7—Other notes and loansreceivable. On the dashed lines to theleft of column (a), enter the combined totalyear-end figures for notes receivable andloans receivable and the allowance fordoubtful accounts.

Notes receivable. In columns (a), (b),and (c), enter the amount of all notesreceivable not listed on line 6 and notacquired as investments. Attach aschedule similar to the one for line 6. The

schedule should also identify therelationship of the borrower to any officer,director, trustee, foundation manager, orother disqualified person.

For a note receivable from any section501(c)(3) organization, list only the nameof the borrower and the balance due onthe required schedule.

Loans receivable. In columns (a), (b),and (c), enter the gross amount of loansreceivable, minus the allowance fordoubtful accounts, from the normal

activities of the filing organization (suchas scholarship loans). An itemized list ofthese loans is not required but attach aschedule showing the total amount ofeach type of outstanding loan. Reportloans to officers, directors, trustees,foundation managers, or other disqualifiedpersons on line 6 and loans to otheremployees on line 15.Line 8—Inventories for sale or use.Enter the amount of materials, goods, andsupplies purchased or manufactured bythe organization and held for sale or usein some future period.Line 9—Prepaid expenses anddeferred charges. Enter the amount ofshort-term and long-term prepayments ofexpenses attributable to one or morefuture accounting periods. Examplesinclude prepayments of rent, insurance,and pension costs, and expensesincurred in connection with a solicitationcampaign to be conducted in a futureaccounting period.Lines 10a, b, and c—Investments—government obligations, corporatestocks and bonds. Enter the book value(which may be market value) of theseinvestments.

Attach a schedule that lists eachsecurity held at the end of the year andshows whether the security is listed atcost (including the value recorded at thetime of receipt in the case of donatedsecurities) or end-of-year market value.Do not include amounts shown on line 2.Governmental obligations reported on line10a are those that mature in 1 year ormore. Debt securities of the U.S.Government may be reported as a singletotal rather than itemized. Obligations ofstate and municipal governments mayalso be reported as a lump-sum total. Donot combine U.S. Government obligationswith state and municipal obligations onthis schedule.Line 11—Investments—land, buildings,and equipment. On the dashed lines tothe left of column (a), enter the year-endbook value (cost or other basis) andaccumulated depreciation of all land,buildings, and equipment held forinvestment purposes, such as rentalproperties. In columns (a) and (b), enterthe book value of all land, buildings, andequipment held for investment lessaccumulated depreciation. In column (c),enter the fair market value of theseassets. Attach a schedule listing theseinvestment fixed assets held at the end




of the year and showing, for each item orcategory listed, the cost or other basis,accumulated depreciation, and bookvalue.Line 12—Investments—mortgageloans. Enter the amount of mortgageloans receivable held as investments butdo not include program-relatedinvestments (see instructions for line 15).Line 13—Investments—other. Enter theamount of all other investment holdingsnot reported on lines 10 through 12.

Attach a schedule listing and describingeach of these investments held at the endof the year. Show the book value for eachand indicate whether the investment islisted at cost or end-of-year market value.Do not include program-relatedinvestments (see instructions for line 15).Line 14—Land, buildings, andequipment. On the dashed lines to theleft of column (a), enter the year-end bookvalue (cost or other basis) andaccumulated depreciation of all land,buildings, and equipment owned by theorganization and not held for investment.In columns (a) and (b), enter the bookvalue of all land, buildings, and equipment

not held for investment less accumulateddepreciation. In column (c), enter the fairmarket value of these assets. Include anyproperty, plant, and equipment ownedand used by the organization to conductits charitable activities. Attach a schedulelisting these fixed assets held at the endof the year and showing the cost or otherbasis, accumulated depreciation, andbook value of each item or category listed.Line 15—Other assets. List and showthe book value of each category of assetsnot reportable on lines 1 through 14.Attach a separate schedule if more spaceis needed.

One type of asset reportable on line 15is program-related investments. Theseare investments made primarily toaccomplish a charitable purpose of thefiling organization rather than to produceincome.Line 16—Total assets. All filers mustcomplete line 16 of columns (a), (b), and(c). These entries represent the totals oflines 1 through 15 of each column.However, organizations that have assetsof less than $5,000 per books at all timesduring the year need not complete lines1 through 15 of column (c).

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The column (c) amount is also entered on the entry space for I on

page 1.Line 17—Accounts payable andaccrued expenses. Enter the total ofaccounts payable to suppliers and othersand accrued expenses, such as salariespayable, accrued payroll taxes, andinterest payable.Line 18—Grants payable. Enter theunpaid portion of grants and awards thatthe organization has made a commitmentto pay other organizations or individuals,whether or not the commitments havebeen communicated to the grantees.

Line 19—Deferred revenue. Includerevenue that the organization hasreceived but not yet earned as of thebalance sheet date under its method ofaccounting.Line 20—Loans from officers,directors, trustees, and otherdisqualified persons. Enter the unpaidbalance of loans received from officers,directors, trustees, and other disqualifiedpersons. For loans outstanding at the endof the year, attach a schedule that shows

(for each loan) the name and title of thelender and the information listed in items2 through 10 of the instructions for line 6on page 14.Line 21—Mortgages and other notespayable. Enter the amount of mortgagesand other notes payable at the beginningand end of the year. Attach a scheduleshowing, as of the end of the year, thetotal amount of all mortgages payableand, for each nonmortgage note payable,the name of the lender and the otherinformation specified in items 2 through10 of the instructions for line 6. Theschedule should also identify therelationship of the lender to any officer,

director, trustee, foundation manager, orother disqualified person.Line 22—Other liabilities. List and showthe amount of each liability not reportableon lines 17 through 21. Attach a separateschedule if more space is needed.

Lines 24 Through 30—Net Assetsor Fund Balances

The Financial Accounting StandardsBoard issued Statement of FinancialAccounting Standards (SFAS) 117,Financial Statements of Not-for-ProfitOrganizations. SFAS 117 providesstandards for external financialstatements certified by an independent

accountant for certain types of nonprofitorganizations including privatefoundations.

While some states may requirereporting in accordance with SFAS 117(see General Instruction F), the IRS doesnot. However, a Form 990-PF returnprepared in accordance with SFAS 117will be acceptable to the IRS.Organizations that follow SFAS 117. Ifthe organization follows SFAS 117, checkthe box above line 24. Classify and reportnet assets in three groups—unrestricted,temporarily restricted, and permanentlyrestricted—based on the existence orabsence of donor-imposed restrictionsand the nature of those restrictions. Showthe sum of the three classes of net assetson line 30. On line 31, add the amountson lines 23 and 30 to show total liabilitiesand net assets. This figure should be thesame as the figure for Total assets online 16.Line 24—Unrestricted. Enter thebalances per books of the unrestrictedclass of net assets. Unrestricted netassets are neither permanently restrictednor temporarily restricted by

donor-imposed stipulations. All fundswithout donor-imposed restrictions mustbe classified as unrestricted, regardlessof the existence of any board designationsor appropriations.Line 25—Temporarily restricted. Enterthe balances per books of the temporarilyrestricted class of net assets. Donors'temporary restrictions may require thatresources be used in a later period orafter a specified date (time restrictions),or that resources be used for a specified

purpose (purpose restrictions), or both.Line 26—Permanently restricted. Enterthe total of the balances for thepermanently restricted class of net assets.Permanently restricted net assets are (a)assets, such as land or works of art,donated with stipulations that they beused for a specified purpose, bepreserved, and not be sold or (b) assetsdonated with stipulations that they beinvested to provide a permanent sourceof income. The latter result from gifts andbequests that create permanentendowment funds.Organizations that do not follow SFAS117. If the organization does not follow

SFAS 117, check the box above line 27and report account balances on lines 27through 29. Report net assets or fundbalances on line 30. Also complete line31 to report the sum of the total liabilitiesand net assets/fund balances.Line 27—Capital stock, trust principal,or current funds. For corporations, enterthe balance per books for capital stockaccounts. Show par or stated value (or forstock with no par or stated value, totalamount received upon issuance) of allclasses of stock issued and, as yet,uncancelled. For trusts, enter the amountin the trust principal or corpus account.For organizations continuing to use the

fund method of accounting, enter the fundbalances for the organization's currentrestricted and unrestricted funds.Line 28—Paid-in or capital surplus, orland, bldg., and equipment fund. Enterthe balance per books for all paid-incapital in excess of par or stated value forall stock issued and uncancelled. Ifstockholders or others gave donationsthat the organization records as paid-incapital, include them here. Report anycurrent-year donations you included online 28 in Part I, line 1. The fund balancefor the land, building, and equipment fundwould be entered here.Line 29—Retained earnings,

accumulated income, endowment, orother funds. For corporations, enter thebalance in the retained earnings, orsimilar account, minus the cost of anycorporate treasury stock. For trusts, enterthe balance per books in the accumulatedincome or similar account. Fororganizations using fund accounting,enter the total of the fund balances for thepermanent and term endowment funds aswell as balances of any other funds notreported on lines 27 and 28.




Line 30—Total net assets or fundbalances. For organizations that followSFAS 117, enter the total of lines 24through 26. For all other organizations,enter the total of lines 27 through 29.Enter the beginning-of-year figure incolumn (a) on line 1, Part III. Theend-of-year figure in column (b) mustagree with the figure in Part III, line 6.Line 31—Total liabilities and netassets/fund balances. Enter the total oflines 23 and 30. This amount must equal

the amount for total assets reported online 16 for both the beginning and end ofthe year.

Part III—Analysis of Changesin Net Assets or FundBalancesGenerally, the excess of revenue overexpenses accounts for the differencebetween the net assets at the beginningand end of the year. On line 2, Part III,re-enter the figure from Part I, line 27(a),column (a). On lines 3 and 5, list anychanges in net assets that were notcaused by the receipts or expenses

shown in Part I, column (a). For example,if an asset is shown in the ending balancesheet at a higher value than in thebeginning balance sheet because of anincreased market value, include theincrease in Part III, line 3.

If an organization changes itsaccounting method for tax purposes toconform with the method provided inSFAS 116, it should report any increaserequired by section 481(a) on line 3 andidentify the adjustment as the effect ofchanging to the methods provided inSFAS 116.

If the organization uses a stepped-upbasis to determine gains on sales ofassets included in Part I, column (a), theninclude the amount of step-up in basis inPart III. If you entered a contribution, gift,or grant of property valued at fair marketvalue on line 25 of Part I, column (a), thedifference between fair market value andbook value should be shown in the booksof account and as a net asset adjustmentin Part III.

Part IV—Capital Gains andLosses for Tax onInvestment IncomeUse Part IV to figure the amount of net

capital gain to report on lines 7 and 8 ofPart I.q Part IV does not apply to foreignorganizations.q Nonoperating private foundations maynot have to figure their short-term capitalgain or loss on line 3. See the rules forNonoperating private foundations onpage 10.

Private foundations must report gainsand losses from the sale or otherdisposition of property:q Held for investment purposes, or

q Used to produce unrelated businessincome; however, only include in netinvestment income the part of the gain orloss that is not included in thecomputation of its unrelated businesstaxable income.Property held for investment purposes.Property is treated as held for investmentpurposes if the property is of a type thatgenerally produces interest, dividends,rents, or royalties, even if the foundationdisposes of the property as soon as it

receives it.Charitable use property. Do not includeany gain or loss from disposing ofproperty used for the foundation'scharitable purposes in the computation oftax on net investment income. If thefoundation uses property for its charitablepurposes, but also incidentally derivesincome from the property that is subjectto the net investment income tax, any gainor loss from the sale or other dispositionof the property is not subject to the tax.

However, if the foundation usesproperty both for charitable purposes and(other than incidentally) for investmentpurposes, include in the computation of

tax on net investment income the part ofthe gain or loss from the sale ordisposition of the property that is allocableto the investment use of the property.

Program-related investments. Donot include gains or losses from the saleor exchange of program-relatedinvestments as defined in the instructionsfor Part IX-B.Losses. If the disposition of investmentproperty results in a loss, that loss maybe subtracted from capital gains realizedfrom the disposition of property during thesame tax year but only to the extent of thegains. If losses are more than gains, theexcess may not be subtracted from grossinvestment income, nor may the lossesbe carried back or forward to other taxyears.Basis. The basis for determining gainfrom the sale or other disposition ofproperty is the larger of:

1. The fair market value of theproperty on December 31, 1969, plus orminus all adjustments after December 31,1969, and before the date of disposition,if the foundation held the property on thatdate and continuously after that date untildisposition; or

2. The basis of the property on thedate of disposition under normal basis

rules (actual basis). See Code sections1011–1021.The rules that generally apply to

property dispositions reported in this partare:q Section 1011, Adjusted basis fordetermining gain or loss.q Section 1012, Basis of property—cost.q Section 1014, Basis of propertyacquired from a decedent.q Section 1015, Basis of propertyacquired by gifts and transfers in trust.q Section 1016, Adjustments to basis.

To figure a loss, basis on the date ofdisposition is determined under normalbasis rules.

See Chapter IV of Pub. 578 forexamples on how to determine gain orloss. The completed Form 990-PF inPackage 990-PF, Returns for PrivateFoundations or Section 4947(a)(1)Nonexempt Charitable Trusts Treated asPrivate Foundations, contains an exampleof a sale of investment property in whichthe gain was computed using the donor's

basis under the rules of section 1015(a).

Part V—Qualification UnderSection 4940(e) for ReducedTax on Net InvestmentIncomeThis part is used by domestic privatefoundations (exempt and taxable) todetermine whether they qualify for thereduced 1% tax under section 4940(e) onnet investment income rather than the 2%tax on net investment income undersection 4940(a).

Do not complete Part V if this is the

organization's first year. A privatefoundation cannot qualify under section4940(e) for its first year of existence, norcan a former public charity qualify for thefirst year it is treated as a privatefoundation.

A separate computation must be madefor each year in which the foundationwants to qualify for the reduced tax.Line 1, column (b). Enter the amount ofadjusted qualifying distributions made foreach year shown. The amounts in column(b) are taken from Part XII, line 6 of theForm 990-PF for 1994–98.Line 1, column (c). Enter the net valueof noncharitable-use assets for each year.

The amounts in column (c) are taken fromPart X, line 5, for 1994–98.

Part VI—Excise Tax Basedon Investment Income(Section 4940(a), 4940(b),4940(e), or 4948)

General Rules

Domestic exempt private foundations.These foundations are subject to a 2% taxon net investment income under section4940(a). However, certain exemptoperating foundations described in

section 4940(d)(2) may not owe any tax,and certain private foundations that meetthe requirements of section 4940(e) mayqualify for a reduced tax of 1% (see thePart V instructions).

Exception. The section 4940 tax doesnot apply to an organization making anelection under section 41(e)(6). Enter“N/A” in Part VI.Domestic taxable private foundationsand section 4947(a)(1) nonexemptcharitable trusts. These organizationsare subject to a modified 2% tax on netinvestment income under section 4940(b).




(See Part V and its instructions to find outif they meet the requirements of section4940(e) that allows them to use amodified 1% tax on net investmentincome.) However, they must firstcompute the tax under section 4940(a) asif that tax applied to them.Foreign organizations. Under section4948, exempt foreign privatefoundations are subject to a 4% tax ontheir gross investment income derivedfrom U.S. sources.

Taxable foreign private foundations thatfiled Form 1040NR, U.S. NonresidentAlien Income Tax Return, or Form1120-F, U.S. Income Tax Return of aForeign Corporation, enter “N/A” in PartVI.Estimated tax. Domestic exempt andtaxable private foundations and section4947(a)(1) nonexempt charitable trustsmay have to make estimated taxpayments for the excise tax based oninvestment income. See GeneralInstruction O for more information.

Tax Computation

CAUTION

! Line 1a only applies to domestic exempt operating foundations that are described in section 4940(d)(2)

and that have a ruling letter from the IRS establishing exempt operating foundation status. If your organization does not have this letter, skip line 1a.

Line 1a. A domestic exempt privatefoundation that qualifies as an exemptoperating foundation under section4940(d)(2) is not liable for any tax on netinvestment income on this return.

If your organization qualifies, check thebox and enter the date of the ruling letteron line 1a and enter “N/A” on line 1.Leave the rest of Part Vl blank. For the

first year, the organization must attach acopy of the ruling letter establishingexempt operating foundation status. Aslong as the organization retains thisstatus, write the date of the ruling letter inthe space on line 1a. If the organizationno longer qualifies under section4940(d)(2), leave the date line blank andcompute the section 4940 tax in thenormal manner.

Qualification. To qualify as an exemptoperating foundation for a tax year, anorganization must meet the followingrequirements of section 4940(d)(2):

1. It is an operating foundationdescribed in section 4942(j)(3),

2. It has been publicly supported forat least 10 tax years or was a privateoperating foundation on January 1, 1983,or for its last tax year ending beforeJanuary 1, 1983,

3. Its governing body, at all timesduring the tax year, consists of individualsless than 25% of whom are disqualifiedindividuals, and is broadly representativeof the general public, and

4. It has no officer who was adisqualified individual at any time duringthe tax year.

Line 2—Section 511 tax. Under section4940(b), a domestic section 4947(a)(1)nonexempt charitable trust or taxableprivate foundation must add to the taxfigured under section 4940(a) (on line 1)the tax which would have been imposedunder section 511 for the tax year if it hadbeen exempt from tax under section501(a). If the domestic section 4947(a)(1)nonexempt charitable trust or taxableprivate foundation has unrelated businesstaxable income that would have been

subject to the tax imposed by section 511,the computation of tax must be shown inan attachment. Form 990-T may be usedas the attachment. All other filers, enterzero.Line 4—Subtitle A tax. Domestic section4947(a)(1) nonexempt charitable trustsand taxable private foundations, enter theamount of subtitle A (income) tax for theyear reported on Form 1041 or Form1120. All other filers, enter zero.Line 5—Tax based on investmentincome. Subtract line 4 from line 3 andenter the difference (but not less thanzero) on line 5. Any overpayment enteredon line 10 that is the result of a negative

amount shown on line 5 will not berefunded. Unless the organization is adomestic section 4947(a)(1) nonexemptcharitable trust or taxable privatefoundation, the amount on line 5 is thesame as on line 1.

Line 6—Credits/Payments

CAUTION

!Line 6a applies only to domestic organizations.

Line 6a. Enter the amount of 1999estimated tax payments, and any 1998overpayment of taxes that theorganization specified on its 1998 returnto be credited toward payment of 1999estimated taxes.

Trust payments treated as beneficiary payments. A trust may treatany part of estimated taxes it paid astaxes paid by the beneficiary. If the filingorganization was a beneficiary thatreceived the benefit of such a paymentfrom a trust, include the amount on line6a of Part VI, and write, “Includes section643(g) payment.” See section 643(g) formore information about estimated taxpayments treated as paid by abeneficiary.Line 6b. Exempt foreign foundationsmust enter the amount of tax withheld at

the source.Line 6d. Enter the amount of any backupwithholding erroneously withheld.Recipients of interest or dividendpayments must generally certify theircorrect tax identification number to thebank or other payer on Form W-9,Request for Taxpayer IdentificationNumber and Certification. If the payerdoes not get this information, it mustwithhold part of the payments as “backupwithholding.” If the organization files Form990-PF and was subject to erroneousbackup withholding because the payer did

not realize the payee was an exemptorganization and not subject to thiswithholding, the organization can claimcredit for the amount withheld.Line 8—Penalty. Enter any penalty forunderpayment of estimated tax shown onForm 2220. Form 2220 is used by bothcorporations and trusts.Line 9—Tax due. Domestic foundationsshould see General Instruction P.

All foreign organizations should enclosea check or money order (in U.S. funds),made payable to the United StatesTreasury, with Form 990-PF.

Part VII-A—StatementsRegarding ActivitiesEach question in this section must beanswered “Yes,” “No,” or “N/A” (notapplicable).Line 1. Political purposes include, but arenot limited to: directly or indirectlyaccepting contributions or makingpayments to influence the selection,nomination, election, or appointment ofany individual to any Federal, state, orlocal public office or office in a politicalorganization, or the election ofpresidential or vice presidential electors,whether or not the individual or electorsare actually selected, nominated, elected,or appointed.Line 3. A “conformed” copy of anorganizational document is one thatagrees with the original document and allits amendments. If copies are not signed,attach a written declaration signed by anofficer authorized to sign for theorganization, certifying that they arecomplete and accurate copies of theoriginal documents.Line 6. For a private foundation to beexempt from income tax, its governinginstrument must include provisions thatrequire it to act or refrain from acting soas not to engage in an act of self-dealing(section 4941), or subject the foundationto the taxes imposed by sections 4942(failure to distribute income), 4943(excess business holdings), 4944(investments which jeopardize charitablepurpose), and 4945 (taxableexpenditures). A private foundation maysatisfy these section 508(e) requirementseither by express language in itsgoverning instrument or by application ofstate law that imposes the aboverequirements on the foundation or treatsthese requirements as being contained inthe governing instrument. If anorganization claims it satisfies therequirements of section 508(e) byoperation of state law, the provisions ofstate law must effectively impose thesection 508(e) requirements on theorganization. See Rev. Rul. 75-38, 1975-1C.B.161, for a list of states with legislationthat satisfies the requirements of section508(e).

However, if the state law does not applyto a governing instrument that containsmandatory directions conflicting with anyof its requirements and the organization




has such mandatory directions in itsgoverning instrument, then theorganization has not satisfied therequirements of section 508(e) by theoperation of that legislation.Line 8a. In the space provided list allstates:

1. To which the organization reportsin any way about its organization, assets,or activities; and

2. With which the organization hasregistered (or which it has otherwisenotified in any manner) that it intends tobe, or is, a charitable organization or thatit is, or intends to be, a holder of propertydevoted to a charitable purpose.

Attach a separate list if you need morespace.Line 9. If the organization claims statusas a private operating foundation for 1999and, in fact, meets the private operatingfoundation requirements for that year (asreflected in Part XIV), any excessdistributions carryover from 1998 or prioryears may not be carried over to 1999 orany year after 1999 in which it does notmeet the private operating foundationrequirements. See the instructions forPart XIII.Line 10—Substantial contributors. Ifyou answer “Yes,” attach a schedulelisting the names and addresses of allpersons who became substantialcontributors during the year.

The term substantial contributormeans any person whose contributionsor bequests during the current tax yearand prior tax years total more than $5,000and are more than 2% of the totalcontributions and bequests received bythe foundation from its creation throughthe close of its tax year. In the case of atrust, the term “substantial contributor”

also means the creator of the trust(section 507(d)(2)).The term person includes individuals,

trusts, estates, partnerships, associations,corporations, and other exemptorganizations.

Each contribution or bequest must bevalued at fair market value on the date itwas received.

Any person who is a substantialcontributor on any date will remain asubstantial contributor for all later periods.

However, a person will cease to be asubstantial contributor with respect to anyprivate foundation if:

1. The person, and all related

persons, made no contributions to thefoundation during the 10-year periodending with the close of the taxable year;

2. The person, or any related person,was never the foundation's managerduring this 10-year period; and

3. The aggregate contributions madeby the person, and related persons, aredetermined by the IRS to be insignificantcompared to the aggregate amount ofcontributions to the foundation by anyother person and the appreciated valueof contributions held by the foundation.

The term related person includes anyother person who would be a disqualifiedperson because of a relationship with thesubstantial contributor (section 4946).When the substantial contributor is acorporation, the term also includes anyofficer or director of a corporation. Theterm “substantial contributor” does notinclude public charities (organizationsdescribed in section 509(a)(1), (2), or (3)).Line 13—Section 4947(a)(1) trusts.Section 4947(a)(1) nonexempt charitable

trusts that file Form 990-PF instead ofForm 1041 must complete this line. Thetrust should include exempt-interestdividends received from a mutual fund orother regulated investment company aswell as tax-exempt interest receiveddirectly.

Part VII-B—Activities forWhich Form 4720 May BeRequiredThe purpose of these questions is todetermine if there is any initial excise taxdue under sections 4941–4945, andsection 4955. If the answer is “Yes” to

question 1b, 1c, 2b, 3b, 4a, 4b, or 5b,complete and file Form 4720, unless anexception applies.Line 1—Self-dealing. The activities listedin 1a(1)–(6) are considered self-dealingunder section 4941 unless one of theexceptions applies. See Pub. 578.

The terms “disqualified person” and“foundation manager” are defined inGeneral Instruction C.Line 1b. If you answered “Yes” to anyof the questions in 1a, you should answer“Yes” to 1b unless all of the acts engagedin were “excepted” acts. Excepted actsare described in Regulations sections53.4941(d)-3 and 4 or appear in Noticespublished in the Internal RevenueBulletin, relating to disaster assistance.Line 2—Taxes on failure to distributeincome. If you answer “No” to question2b, attach a statement explaining:

1. All the facts regarding the incorrectvaluation of assets, and

2. The actions taken (or planned) tocomply with section 4942(a)(2)(B), (C),and (D) and the related regulations.Line 3a. A private foundation is nottreated as having excess businessholdings in any enterprise if, together withrelated foundations, it owns 2% or less ofthe voting stock and 2% or less in value

of all outstanding shares of all classes ofstock. (See “disqualified person” underGeneral Instruction C.) A similarexception applies to a beneficial or profitsinterest in any business enterprise that isa trust or partnership.

For more information about excessbusiness holdings, see Pub. 578 and theinstructions for Form 4720.Line 4—Taxes on investments thatjeopardize charitable purposes. Ingeneral, an investment that jeopardizesany of the charitable purposes of a private

foundation is one for which a foundationmanager did not exercise ordinarybusiness care to provide for the long- andshort-term financial needs of thefoundation in carrying out its charitablepurposes. For more details, see Pub. 578and the regulations under section 4944.Line 5—Taxes on taxable expendituresand political expenditures. In general,payments made for the activitiesdescribed on lines 5a(1)–(5) are taxableexpenditures. See Pub. 578 for

exceptions.A grant by a private foundation to a

public charity is not a taxable expenditureif the private foundation does not earmarkthe grant for any of the activitiesdescribed in lines 5a(1)–(5), and there isno oral or written agreement by which thegrantor foundation may cause the granteeto engage in any such prohibited activityor to select the grant recipient.

Grants made to exempt operatingfoundations (as defined in section4940(d)(2) and the instructions to Part VI)are not subject to the expenditureresponsibility provisions of section 4945.

Under section 4955, a section 501(c)(3)organization must pay an excise tax forany amount paid or incurred on behalf ofor opposing any candidate for publicoffice. The organization must pay anadditional excise tax if it does not correctthe expenditure timely.

A manager of a section 501(c)(3)organization who knowingly agrees to apolitical expenditure must pay an excisetax unless the agreement is not willful andthere is reasonable cause. A managerwho does not agree to a correction of thepolitical expenditure may have to pay anadditional excise tax.

A section 501(c)(3) organization willlose its exempt status if it engages inpolitical activity.

A political expenditure that is treatedas an expenditure under section 4955 isnot treated as a taxable expenditureunder section 4945.

For purposes of the section 4955 tax,when an organization promotes acandidate for public office (or is used orcontrolled by a candidate or prospectivecandidate), amounts paid or incurred forthe following purposes are politicalexpenditures:

1. Remuneration to the individual (orcandidate or prospective candidate) forspeeches or other services.

2. Travel expenses of the individual.3. Expenses of conducting polls,

surveys, or other studies, or preparingpapers or other material for use by theindividual.

4. Expenses of advertising, publicity,and fundraising for such individual.

5. Any other expense that has theprimary effect of promoting publicrecognition or otherwise primarilyaccruing to the benefit of the individual.




See the regulations under section 4945for more information.Line 5b. If you answered “Yes” to anyof the questions in 5a, you should answer“Yes” to 5b unless all of the transactionsengaged in were “excepted” transactions.Excepted transactions are described inRegulations section 53.4945 or appear inNotices published in the Internal RevenueBulletin, relating to disaster assistance.

Part VIII—Information AboutOfficers, Directors, Trustees,Foundation Managers, HighlyPaid Employees, andContractorsLine 1—List of officers, directors,trustees, etc. List the names, addresses,and other information requested for thosewho were officers, directors, and trustees(or any person who had responsibilitiesor powers similar to those of officers,directors, or trustees) of the foundation atany time during the year. Each must belisted whether or not they receive anycompensation from the foundation. Give

the preferred address at which officers,etc., want the Internal Revenue Serviceto contact them.

Also include on this list, any officers ordirectors (or any person who hadresponsibilities or powers similar to thoseof officers or directors) of a disregardedentity owned by the foundation who arenot officers, directors, etc. of thefoundation.

If the foundation (or disregarded entity)pays any other person, such as amanagement services company, for theservices provided by any of thefoundation's officers, directors, or trustees(or any person who had responsibilities

or powers similar to those of officers,directors, or trustees), report thecompensation and other items on Part VIIIas if you had paid the officers, etc.directly.

Show all forms of compensation earnedby each listed officer, etc. In addition tocompleting Part VIII, if you want to explainthe compensation of one or more officers,directors, and trustees, you may providean attachment describing the person'sentire 1999 compensation package.

Enter zero in columns (c), (d), and (e)if no compensation was paid. Attach aschedule if more space is needed.

Column (b). A numerical estimate ofthe average hours per week devoted tothe position is required for the answer tobe considered complete.

CAUTION

!Phrases such as “ as needed ” or “ as required ” are unacceptable entries for column (b).

Column (c). Enter salary, fees,bonuses, and severance paymentsreceived by each person listed. Includecurrent year payments of amountsreported or reportable as deferredcompensation in any prior year.

Column (d). Include all forms ofdeferred compensation and futureseverance payments (whether or notfunded or vested, and whether or not thedeferred compensation plan is a qualifiedplan under section 401(a)). Includepayments to welfare benefit plans(employee welfare benefit plans coveredby Part I of Title 1 of ERISA, providingbenefits such as medical, dental, lifeinsurance, apprenticeship and training,scholarship funds, severance pay,

disability, etc.) on behalf of the officers,etc. Reasonable estimates may be usedif precise cost figures are not readilyavailable.

Unless the amounts are reported incolumn (c), report, as deferredcompensation in column (d), salaries andother compensation earned during theperiod covered by the return, but not yetpaid by the date the foundation files itsreturn.

Column (e). Enter both taxable andnontaxable fringe benefits, expenseaccount and other allowances (other thande minimis fringe benefits described insection 132(e)). See Pub. 525 for more

information. Examples of allowancesinclude amounts for which the recipientdid not account to the organization orallowances that were more than thepayee spent on serving the organization.Include payments made in connectionwith indemnification arrangements, thevalue of the personal use of housing,automobiles, or other assets owned orleased by the organization (or provided forthe organization's use without charge).Line 2—Compensation of fivehighest-paid employees. Fill in theinformation requested for the fiveemployees (if any) of the foundation (ordisregarded entity that the foundation

owns) who received the greatest amountof annual compensation over $50,000. Donot include employees listed on line 1.Also enter the total number of otheremployees who received more than$50,000 in annual compensation.

Show each listed employee's entirecompensation package for the periodcovered by the return. Include all formsof compensation that each listedemployee received in return for his or herservices. See the line 1 instructions formore details on includible compensation.Line 3—Five highest-paid independentcontractors for professional services.Fill in the information requested for the

five highest-paid independent contractors(if any), whether individuals orprofessional service corporations orassociations, to whom the organizationpaid more than $50,000 for the year toperform personal services of aprofessional nature for the organization(such as attorneys, accountants, anddoctors). Also show the total number ofall other independent contractors whoreceived more than $50,000 for the yearfor performing professional services.

Part IX-A—Summary ofDirect Charitable ActivitiesList the foundation's four largest programsas measured by the direct and indirectexpenses attributable to each that consistof the direct active conduct of charitableactivities. Whether any expenditure is forthe direct active conduct of a charitableactivity is determined, generally, by thedefinitions and special rules of section4942(j)(3) and the related regulations,

which define a private operatingfoundation.

Except for significant involvement grantprograms, described below, do notinclude in Part IX-A any grants orexpenses attributable to administeringgrant programs, such as reviewing grantapplications, interviewing or testingapplicants, selecting grantees, andreviewing reports relating to the use of thegrant funds.

Include scholarships, grants, or otherpayments to individuals as part of anactive program in which the foundationmaintains some significant involvement.Related administrative expenses should

also be included. Examples of activeprograms and definitions of the term“significant involvement” are provided inRegulations sections 53.4942(b)-1(b)(2)and 53.4942(b)-1(d).

Do not include any program-relatedinvestments (reportable in Part IX-B) inthe description and expense totals, but besure to include qualified set-asides fordirect charitable activities, reported on line3 of Part XII. Also, include in Part IX-A,amounts paid or set aside to acquireassets used in the direct active conductof charitable activities.

Expenditures for direct charitableactivities include, among others, amountspaid or set aside to:q Acquire or maintain the operatingassets of a museum, library, or historicsite or to operate the facility.q Provide goods, shelter, or clothing toindigents or disaster victims if thefoundation maintains some significantinvolvement in the activity rather thanmerely making grants to the recipients.q Conduct educational conferences andseminars.q Operate a home for the elderly ordisabled.q Conduct scientific, historic, publicpolicy, or other research with significance

beyond the foundation's grant programthat does not constitute a prohibitedattempt to influence legislation.q Publish and disseminate the results ofsuch research, reports of educationalconferences, or similar educationalmaterial.q Support the service of foundation staffon boards or advisory committees of othercharitable organizations or on publiccommissions or task forces.q Provide technical advice or assistanceto a governmental body, a governmental




committee, or subdivision of either, inresponse to a written request by thegovernmental body, committee, orsubdivision.q Conduct performing arts performances.q Provide technical assistance tograntees and other charitableorganizations. This assistance must havesignificance beyond the purposes of thegrants made to the grantees and must notconsist merely of monitoring or advisingthe grantees in their use of the grant

funds. Technical assistance involves thefurnishing of expert advice and relatedassistance regarding, for example:

1. Compliance with governmentalregulations;

2. Reducing operating costs orincreasing program accomplishments;

3. Fundraising methods; and4. Maintaining complete and accurate

financial records.

Report both direct and indirectexpenses in the expense totals. Directexpenses are those that can bespecifically identified as connected with aparticular activity. These include, among

others, compensation and travelexpenses of employees and officersdirectly engaged in an activity, the costof materials and supplies utilized inconducting the activity, and fees paid tooutside firms and individuals inconnection with a specific activity.

Indirect (overhead) expenses are thosethat are not specifically identified asconnected with a particular activity butthat relate to the direct costs incurred inconducting the activity. Examples ofindirect expenses include: occupancyexpenses; supervisory and clericalcompensation; repair, rental, andmaintenance of equipment; expenses of

other departments or cost centers (suchas accounting, personnel, and payrolldepartments or units) that service thedepartment or function that incurs thedirect expenses of conducting an activity;and other applicable general andadministrative expenses, including thecompensation of top management, to theextent reasonably allocable to a particularactivity.

No specific method of allocation isrequired. The method used, however,must be reasonable and must be usedconsistently.

Examples of acceptable allocationmethods include:q Compensation that is allocated on atime basis.q Employee benefits that are allocated onthe basis of direct salary expenses.q Travel, conference, and meetingexpenses that are charged directly to theactivity that incurred the expense.q Occupancy expenses that are allocatedon a space-utilized basis.q Other indirect expenses that areallocated on the basis of direct salaryexpenses or total direct expenses.

Part IX-B—Summary ofProgram-RelatedInvestmentsProgram-related investment. Section4944(c) and corresponding regulationsdefine a program-related investment asone that is made primarily to accomplisha charitable purpose of the foundation andno substantial purpose of which is toproduce investment income or a capitalgain from the sale of the investment.Examples of program-related investmentsinclude educational loans to individualsand low-interest loans to other section501(c)(3) organizations.General instructions. Include only thoseinvestments that were reported in Part XII,line 1b, for the current year. Do notinclude any investments made in any prioryear even if they were still held by thefoundation at the end of 1999.

Investments consisting of loans toindividuals (such as educational loans)are not required to be listed separately butmay be grouped with otherprogram-related investments of the sametype. Loans to other section 501(c)(3)organizations and all other types ofprogram-related investments must belisted separately on lines 1 through 3 oron an attachment.Lines 1 and 2. List the two largestprogram-related investments made by thefoundation in 1999, whether or not theinvestments were still held by thefoundation at the end of the year.Line 3. Combine all otherprogram-related investments and enterthe total on the line 3 Amount column. Listthe individual investments or groups ofinvestments included (attach a scheduleif necessary).

TIPThe total of lines 1 through 3 in the Amount column must equal the amount reported on line 1b of

Part XII.

Part X—Minimum InvestmentReturnWho must complete this section? Alldomestic foundations must completePart X.

Foreign foundations that checked boxD2 on page 1 do not have to completePart X unless claiming status as a privateoperating foundation.

Private operating foundations,described in sections 4942(j)(3) or4942(j)(5), must complete Part X in orderto complete Part XIV.Overview. A private foundation that is nota private operating foundation must payout, as qualifying distributions, itsminimum investment return. This isgenerally 5% of the total fair market valueof its noncharitable assets, subject tofurther adjustments as explained in theinstructions for Part XI. The amount of thisminimum investment return is figured inPart X and is used in Part XI to figure the

amount that is required to be paid out (thedistributable amount).Minimum investment return. In figuringthe minimum investment return, includeonly those assets that are not actuallyused or held for use by the organizationfor a charitable, educational, or othersimilar function that contributed to thecharitable status of the foundation. Cashon hand and on deposit is consideredused or held for use for charitablepurposes only to the extent of the

reasonable cash balances reported inPart X, line 4. See the instructions forlines 1b and 4 below.

Assets that are held for the productionof income or for investment are notconsidered to be used directly forcharitable functions even though theincome from the assets is used for thecharitable functions. It is a factualquestion whether an asset is held for theproduction of income or for investmentrather than used or held for use directlyby the foundation for charitable purposes.

For example, an office building that isused to provide offices for employeesengaged in managing endowment funds

for the foundation is not considered anasset used for charitable purposes.

Dual-use property. When property isused both for charitable and otherpurposes, the property is considered usedentirely for charitable purposes if 95% ormore of its total use is for that purpose.If less than 95% of its total use is forcharitable purposes, a reasonableallocation must be made betweencharitable and noncharitable use.

Excluded property. Certain assetsare excluded entirely from thecomputation of the minimum investmentreturn. These include pledges of grantsand contributions to be received in thefuture and future interests in estates andtrusts. See Pub. 578, chapter VII, for moredetails.Line 1a—Average monthly fair marketvalue of securities. If market quotationsare readily available, a foundation mayuse any reasonable method to determinethe average monthly fair market value ofsecurities such as common and preferredstock, bonds, and mutual fund shares, aslong as that method is consistently used.For example, a value for a particularmonth might be determined by the closingprice on the first or last trading days of themonth or an average of the closing priceson the first and last trading days of the

month. Market quotations are consideredreadily available if a security is any of thefollowing:q Listed on the New York or Americanstock exchange or any city or regionalexchange in which quotations appear ona daily basis, including foreign securitieslisted on a recognized foreign national orregional exchange.q Regularly traded in the national orregional over-the-counter market forwhich published quotations are available.




q Locally traded, for which quotations canbe readily obtained from establishedbrokerage firms.

If securities are held in trust for, or onbehalf of, a foundation by a bank or otherfinancial institution that values thosesecurities periodically using a computerpricing system, a foundation may use thatsystem to determine the value of thesecurities. The system must beacceptable to the IRS for Federal estatetax purposes.

The foundation may reduce the fairmarket value of securities only to theextent that it can establish that thesecurities could only be liquidated in areasonable period of time at a price lessthan the fair market value because of:q The size of the block of the securities;q The fact that the securities held aresecurities in a closely held corporation;orq The fact that the sale of the securitieswould result in a forced or distress sale.

Any reduction in value allowed underthese provisions may not be more than10% of the fair market value (determined

without regard to any reduction in value).Also, see Regulations sections53.4942(a)-2(c)(4)(i)(b), (c), and (iv)(a).Line 1b—Average of monthly cashbalances. Compute cash balances on amonthly basis by averaging the amountof cash on hand on the first and last daysof each month. Include all cash balancesand amounts that may be used forcharitable purposes (see line 4 below) orset aside and taken as a qualifyingdistribution (see Part XII).Line 1c—Fair market value of all otherassets. The fair market value of assetsother than securities is determinedannually except as described below. The

valuation may be made by privatefoundation employees or by any otherperson even if that person is a disqualifiedperson. If the IRS accepts the valuation,it is valid only for the tax year for which itis made. A new valuation is required forthe next tax year.

5-year valuation. A written, certified,and independent appraisal of the fairmarket value of any real estate, includingany improvements, may be determinedon a 5-year basis by a qualified person.

The qualified person may not be adisqualified person (see GeneralInstruction C) with respect to the privatefoundation or an employee of the

foundation.Commonly accepted valuation methods

must be used in making the appraisal. Avaluation based on acceptable methodsof valuing property for Federal estate taxpurposes will be considered acceptable.

The appraisal must include a closingstatement that, in the appraiser's opinion,the appraised assets were valuedaccording to valuation principles regularlyemployed in making appraisals of suchproperty, using all reasonable valuationmethods. The foundation must keep acopy of the independent appraisal for its

records. If a valuation is reasonable, thefoundation may use it for the tax year forwhich the valuation is made and for eachof the 4 following tax years.

Any valuation of real estate by acertified independent appraisal may bereplaced during the 5-year period by asubsequent 5-year certified independentappraisal or by an annual valuation asdescribed above. The most recentvaluation should be used to compute thefoundation's minimum investment return.

If the valuation is made according to theabove rules, the IRS will continue toaccept it during the 5-year period forwhich it applies even if the actual fairmarket value of the property changesduring the period.

Valuation date. An asset required tobe valued annually may be valued as ofany day in the private foundation's taxyear, provided the foundation values theasset as of that date in all tax years.However, a valuation of real estatedetermined on a 5-year basis by acertified, independent appraisal may bemade as of any day in the first tax yearof the foundation to which the valuation

applies.Assets held for less than a tax year.

To determine the value of an asset heldless than 1 tax year, divide the numberof days the foundation held the asset bythe number of days in the tax year.Multiply the result by the fair market valueof the asset.Line 1e—Reduction claimed forblockage or other factors. If the fairmarket value of any securities, real estateholdings, or other assets reported on lines1a and 1c reflects a blockage discount,marketability discount, or other reductionfrom full fair market value because of thesize of the asset holding or any otherfactor, enter on line 1e the aggregateamount of the discounts claimed. Attachan explanation that includes the followinginformation for each asset or group ofassets involved:

1. A description of the asset or assetgroup (e.g., 20,000 shares of XYZ, Inc.,common stock);

2. For securities, the percentage ofthe total issued and outstanding securitiesof the same class that is represented bythe foundation's holding;

3. The fair market value of the assetor asset group before any claimedblockage discount or other reduction;

4. The amount of the discountclaimed; and5. A statement that explains why the

claimed discount is appropriate in valuingthe asset or group of assets for section4942 purposes.

In the case of securities, there arecertain limitations on the size of thereduction in value that can be claimed.See the instructions for Part X, line 1a.Line 2—Acquisition indebtedness.Enter the total acquisition indebtednessthat applies to assets included on line 1.For details, see section 514(c)(1).

Line 4—Cash deemed held forcharitable activities. Foundations mayexclude from the assets used in theminimum investment return computationthe reasonable cash balances necessaryto cover current administrative expensesand other normal and currentdisbursements directly connected with thecharitable, educational, or other similaractivities. The amount of cash that maybe excluded is generally 11 / 2% of the fairmarket value of all assets (minus any

acquisition indebtedness) as computed inPart X, line 3. However, if under the factsand circumstances an amount larger thanthe deemed amount is necessary to payexpenses and disbursements, then youmay enter the larger amount instead of11 / 2% of the fair market value on line 4. Ifyou use a larger amount, attach anexplanation.Line 6—Short tax periods. If thefoundation's tax period is less than 12months, determine the applicablepercentage by dividing the number ofdays in the short tax period by 365 (or 366in a leap year). Multiply the result by 5%.Then multiply the modified percentage by

the amount on line 5 and enter the resulton line 6.

Part XI—DistributableAmountIf the organization is claiming status as aprivate operating foundation described insection 4942(j)(3) or (j)(5) or if it is aforeign foundation that checked box D2on page 1, check the box in the headingfor Part XI. You do not need to completethis part. See the Part XIV instructions formore details on private operatingfoundations.

Section 4942(j)(5) organizations are

classified as private operating foundationsfor purposes of section 4942 only if theymeet the requirements of Regulationssection 53.4942(b)-1(a)(2).

The distributable amount for 1999 is theamount that the foundation must distributeby the end of 2000 as qualifyingdistributions to avoid the 15% tax on theundistributed portion.Line 4a. Enter the total of recoveries ofamounts treated as qualifying distributionsfor any year under section 4942(g).Include recoveries of part or all (asapplicable) of grants previously made;proceeds from the sale or otherdisposition of property whose cost was

treated as a qualifying distribution whenthe property was acquired; and anyamount set aside under section 4942(g)to the extent it is determined that thisamount is not necessary for the purposesof the set-aside.Line 4b—Income distributions fromsection 4947(a)(2) trusts. The incomeportion of distributions from split-interesttrusts on amounts placed in trust afterMay 26, 1969, must be added to thedistributable amount, subject to thelimitation of Regulations section53.4942(a)-2(b)(2)(iii).




A “split-interest trust” is defined insection 4947(a)(2) as a trust that is notexempt from tax under section 501(a), notall of the unexpired interests of which aredevoted to charitable, religious,educational, and like purposes, and thathas amounts in trust for which a charitablecontributions deduction has been allowed.

If the foundation receives distributionsthat include amounts placed in trustbefore May 27, 1969, and amounts placedin trust after May 26, 1969, these

distributions must be allocated betweenthose amounts to determine the extent towhich the distributions are included in thefoundation's distributable amount.Line 6—Deduction from distributableamount. If the foundation was organizedbefore May 27, 1969, and its governinginstrument or any other instrumentcontinues to require the accumulation ofincome after a judicial proceeding toreform the instrument has terminated,then the amount of the income requiredto be accumulated must be subtractedfrom the distributable amount beginningwith the first tax year after the tax year inwhich the judicial proceeding was

terminated. (See the instructions for PartVII-A, line 6.)

Part XII—QualifyingDistributions“Qualifying distributions” are amountsspent or set aside for religious,educational, or similar charitablepurposes. The total amount of qualifyingdistributions for any year is used toreduce the distributable amount forspecified years to arrive at theundistributed income (if any) for thoseyears.Line 1a—Expenses, contributions,

gifts, etc. Enter the amount from Part I,column (d), line 26. However, if theborrowed funds election applies, add thetotal of the repayments during the year tothe amount from Part I, column (d), line26, and enter it on line 1a.

Borrowed funds. If the foundationborrowed money in a tax year beginningbefore January 1, 1970, or later borrowsmoney under a written commitmentbinding on December 31, 1969, thefoundation may elect to treat anyrepayments of the loan principal afterDecember 31, 1969, as qualifyingdistributions at the time of repayment,rather than at the earlier time that the

borrowed funds were actually distributed,only if:

1. The money is used to makeexpenditures for a charitable or similarpurpose; and

2. Repayment on the loan did not startuntil a year beginning after 1969.

On these loans, deduct any interestpayment from gross income to computeadjusted net income in the year paid.

Election. To make this election, attacha statement to Form 990-PF for the firsttax year beginning after 1969 in which a

repayment of loan principal is made andfor each tax year after that in which anyrepayment of loan principal is made. Thestatement should show:q The lender's name and address.q The amount borrowed.q The specific use of the borrowed funds.q The private foundation's election totreat repayments of loan principal asqualifying distributions.Line 1b—Program-related investments.

Enter the total of the “Amount” columnfrom Part IX-B. See the Part IX-Binstructions for the definition ofprogram-related investments.Line 3—Amounts set aside. Amountsset aside may be treated as qualifyingdistributions only if the private foundationestablishes to the satisfaction of the IRSthat the amount will be paid for thespecific project within 60 months from thedate of the first set-aside and meets 1 or2 below.

1. The project can be betteraccomplished by a set-aside than by theimmediate payment of funds (suitabilitytest), or

2. The private foundation meets therequirements of section 4942(g)(2)(B)(ii)(cash distribution test).

Set-aside under item 1. For anyset-aside under 1 above, the privatefoundation must apply for IRS approvalby the end of the tax year in which theamount is set aside. Send the applicationfor approval to the Internal RevenueService, Assistant Commissioner(Employee Plans/Exempt Organizations),OP:E:EO, 1111 Constitution Avenue, NW,Washington, DC 20224.

The application for approval must giveall of the following information:q The nature and purposes of the specific

project and the amount of the set-asidefor which approval is requested;q The amounts and approximate datesof any planned additions to the set-asideafter its initial establishment;q The reasons why the project can bebetter accomplished by the set-aside thanby the immediate payment of funds;q A detailed description of the project,including estimated costs, sources of anyfuture funds expected to be used forcompletion of the project, and thelocation(s) (general or specific) of anyphysical facilities to be acquired orconstructed as part of the project; andq

A statement of an appropriatefoundation manager that the amounts setaside will actually be paid for the specificproject within a specified period of timeending within 60 months after the date ofthe first set-aside; or a statementexplaining why the period for paying theamount set aside should be extended andindicating the extension of timerequested. (Include in this statement thereason why the proposed project couldnot be divided into two or more projects

covering periods of no more than 60months each.)

Set-aside under item 2. For anyset-aside under 2 above, the privatefoundation must attach a schedule to itsannual information return showing howthe requirements are met. A schedule isrequired for the year of the set-aside andfor each subsequent year until theset-aside amount has been distributed.See Regulations section53.4942(a)-3(b)(7)(ii) for specific

requirements.Line 5—Reduced tax on investmentincome under section 4940(e). If theorganization does not qualify for the 1%tax under section 4940(e), enter zero. SeeParts V and VI of the instructions.

Part XIII—UndistributedIncomeIf you checked box D2 on page 1, do notfill in this part.

If the organization is a private operatingfoundation for any of the years shown inPart XIII, do not complete the portions ofPart XIII that apply to those years. If there

are excess qualifying distributions for anytax year, do not carry them over to a yearin which the organization is a privateoperating foundation or to any later year.For example, if a foundation made excessqualifying distributions in 1997 andbecame a private operating foundation in1999, the excess qualifying distributionsfrom 1997 could be applied against thedistributable amount for 1998 but not toany year after 1998.

The purpose of this part is to enable thefoundation to comply with the rules forapplying its qualifying distributions for theyear 1999. In applying the qualifyingdistributions, there are three basic steps.

1. Reduce any undistributed incomefor 1998 (but not less than zero).

2. The organization may use any partor all remaining qualifying distributions for1999 to satisfy elections. For example, ifundistributed income remained for anyyear before 1998, it could be reduced tozero or, if the foundation wished, thedistributions could be treated asdistributions out of corpus.

3. If no elections are involved, applyremaining qualifying distributions to the1999 distributable amount on line 4d. Ifthe remaining qualifying distributions aregreater than the 1999 distributableamount, the excess is treated as adistribution out of corpus on line 4e.

If for any reason the 1999 qualifyingdistributions do not reduce any 1998undistributed income to zero, the amountnot distributed is subject to a 15% tax. Ifthe 1998 income remains undistributed atthe end of 2000, it could be subject againto the 15% tax. Also, see section 4942(b)for the circumstances under which asecond-tier tax could be imposed.Line 1—Distributable amount. Enterthe distributable amount for 1999 fromPart XI, line 7.




Line 2—Undistributed income. Enterthe distributable amount for 1998 andamounts for earlier years that remainedundistributed at the beginning of the 1999tax year.Line 2b. Enter the amount ofundistributed income for years before1998.Line 3—Excess distributions carryoverto 1999. If the foundation has madeexcess distributions out of corpus in prioryears, which have not been applied in any

year, enter the amount for each year. Donot enter an amount for a particular yearif the organization was a private operatingfoundation for any later year.Lines 3a through 3e. Enter the amountof any excess distribution made on theline for each year listed. Do not includeany amount that was applied against thedistributable amount of an earlier year orthat was already used to meetpass-through distribution requirements.(See the instructions for line 7.)Line 3f. This amount can be applied in1999.Line 4—Qualifying distributions. Enterthe total amount of qualifying distributionsmade in 1999 from Part XII, line 4. Thetotal of the amounts applied on lines 4athrough 4e is equal to the qualifyingdistributions made in 1999.Line 4a. The qualifying distributions for1999 are first used to reduce anyundistributed income remaining from1998. Enter only enough of the 1999qualifying distributions to reduce the 1998undistributed income to zero.Lines 4b and 4c. If there are any 1999qualifying distributions remaining afterreducing the 1998 undistributed incometo zero, one or more elections can bemade under Regulations section

53.4942(a)-3(d)(2) to apply all or part ofthe remaining qualifying distributions toany undistributed income remaining fromyears before 1998 or to apply to corpus.

Elections. To make these elections,the organization must file a statement withthe IRS or attach a statement, asdescribed in the above regulationssection, to Form 990-PF. An electionmade by filing a separate statement withthe IRS must be made within the year forwhich the election is made. Otherwise,attach a statement to the Form 990-PFfiled for the year the election was made.

Where to enter. If the organizationelected to apply all or part of the

remaining amount to the undistributedincome remaining from years before1998, enter the amount on line 4b.

If the organization elected to treat thosequalifying distributions as a distributionout of corpus, enter the amount online 4c.

CAUTION

!Entering an amount on line 4b or 4c without submitting the required statement is not considered a valid

election.

Line 4d. Treat as a distribution of thedistributable amount for 1999 anyqualifying distributions for 1999 thatremain after reducing the 1998undistributed income to zero and afterelecting to treat any part of the remainingdistributions as a distribution out of corpusor as a distribution of a prior year'sundistributed income. Enter only enoughof the remaining 1999 qualifyingdistributions to reduce the 1999distributable amount to zero.

Line 4e. Any 1999 qualifying distributionsremaining after reducing the 1999distributable amount to zero should betreated as an excess distribution out ofcorpus. This amount may be carried overand applied to later years.Line 5—Excess qualifying distributionscarryover applied to 1999. Enter anyexcess qualifying distributions from line3, which were applied to 1999, in both theCorpus column and the 1999 column.Apply the oldest excess qualifyingdistributions first. Thus, the organizationwill apply any excess qualifyingdistributions carried forward from 1994before those from later years.

Line 6a. Add lines 3f, 4c, and 4e.Subtract line 5 from the total. Enter thenet total in the Corpus column.Line 6c. Enter only the undistributedincome from 1997 and prior years forwhich either a notice of deficiency undersection 6212(a) has been mailed for thesection 4942(a) first-tier tax, or on whichthe first-tier tax has been assessedbecause the organization filed a Form4720 for a tax year that began before1998.Lines 6d and 6e. These amounts aretaxable under the provisions of section4942(a), except for any part that is duesolely to misvaluation of assets to whichthe provisions of section 4942(a)(2) arebeing applied (see Part VII-B, line 2b).Report the taxable amount on Form 4720.If the exception applies, attach anexplanation.Line 6f. In the 1999 column, enter theamount by which line 1 is more than thetotal of lines 4d and 5. This is theundistributed income for 1999. Theorganization must distribute the amountshown by the end of its 2000 tax year sothat it will not be liable for the tax onundistributed income.Line 7—Distributions out of corpus for1999 pass-through distributions.

1. If the foundation is the donee andreceives a contribution from anotherprivate foundation, the donor foundationmay treat the contribution as a qualifyingdistribution only if the donee foundationmakes a distribution equal to the fullamount of the contribution and thedistribution is a qualifying distribution thatis treated as a distribution of corpus. Thedonee foundation must, no later than theclose of the first tax year after the tax yearin which it receives the contributions,

distribute an amount equal in value to thecontributions received in the prior tax yearand have no remaining undistributedincome for the prior year. For example, ifprivate foundation X received $1,000 intax year 1998 from foundation Y,foundation X would have to distribute the$1,000 as a qualifying distribution out ofcorpus by the end of 1999 and have noremaining undistributed income for 1998.

2. If a private foundation receives acontribution from an individual or a

corporation and the individual is seekingthe 50% contribution base limit ondeductions for the tax year (or theindividual or corporation is not applyingthe limit imposed on deductions forcontributions to the foundation of capitalgain property), the foundation mustcomply with certain distributionrequirements.

By the 15th day of the 3rd month afterthe end of the tax year in which thefoundation received the contributions, thedonee foundation must distribute asqualifying distributions out of corpus:

a. An amount equal to 100% of allcontributions received during the year in

order for the individual contributor toreceive the benefit of the 50% limit ondeductions, and

b. Distribute all contributions ofproperty only so that the individual orcorporation making the contribution is notsubject to the section 170(e)(1)(B)(ii)limitations.

If the organization is applying excessdistributions from prior years (i.e., any partof the amount in Part XIII, line 3f) tosatisfy the distribution requirements ofsection 170(b)(1)(E) or 4942(g)(3), it mustmake the election under Regulationssection 53.4942(a)-3(c)(2). Also, seeRegulations section 1.170A-9(g)(2).

Enter on line 7 the total distributions outof corpus made to satisfy the restrictionson amounts received from donorsdescribed above.Line 8—Outdated excess distributionscarryover. Because of the 5-yearcarryover limitation under section4942(i)(2), the organization must reduceany excess distributions carryover by anyamounts from 1994 that were not appliedin 1999.Line 9—Excess distributions carryoverto 2000. Enter the amount by which line6a is more than the total of lines 7 and 8.This is the amount the organization may

apply to 2000 and following years. Line 9can never be less than zero.Line 10—Analysis of line 9. In thespace provided for each year, enter theamount of excess distributions carryoverfrom that year that has not been appliedas of the end of the 1999 tax year. If thereis an amount on the line for 1995, it mustbe applied by the end of the 2000 tax yearsince the 5-year carryover period for 1995ends in 2000.




Part XIV—Private OperatingFoundationsAll organizations that claim status asprivate operating foundations undersection 4942(j)(3) or (5) for 1999 mustcomplete Part XIV.Certain elderly care facilities (section4942(j)(5)). For purposes of section 4942only, certain elderly care facilities may beclassified as private operatingfoundations. To be so classified, they

must be operated and maintained for theprincipal purpose explained in section4942(j)(5) and also meet the endowmenttest described below.

If the foundation is a section 4942(j)(5)organization, complete only lines 1a, 1b,2c, 2d, 2e, and 3b. Enter “N/A” on allother lines in the Total column for PartXIV.Private operating foundation (section4942(j)(3)). The term “private operatingfoundation” means any private foundationthat spends at least 85% of the smallerof its adjusted net income or its minimuminvestment return directly for the activeconduct of the exempt purpose orfunctions for which the foundation isorganized and operated (the IncomeTest) and that also meets one of the threetests below.

1. Assets test. 65% or more of thefoundation's assets are devoted directlyto those activities or functionally relatedbusinesses, or both. Or 65% or more ofthe foundation's assets are stock of acorporation that is controlled by thefoundation, and substantially all of theassets of the corporation are devoted tothose activities or functionally relatedbusinesses.

2. Endowment test. The foundationnormally makes qualifying distributionsdirectly for the active conduct of theexempt purpose or functions for which itis organized and operated in an amountthat is two-thirds or more of its minimuminvestment return.

3. Support test. The foundationnormally receives 85% or more of itssupport (other than gross investmentincome as defined in section 509(e)) fromthe public and from five or more exemptorganizations that are not described insection 4946(a)(1)(H) with respect to eachother or the recipient foundation. Notmore than 25% of the support (other thangross investment income) normally maybe received from any one of the exemptorganizations and not more than one-halfof the support normally may be receivedfrom gross investment income.

See regulations under section 4942 forthe meaning of “directly for the activeconduct” of exempt activities for purposesof these tests.

Complying with these tests. Afoundation may meet the income testand either the assets, endowment, orsupport test by satisfying the tests for

any 3 years during a 4-year periodconsisting of the tax year in question andthe 3 immediately preceding tax years. Itmay also meet the tests based on thetotal of all related amounts of income orassets held, received, or distributedduring that 4-year period. A foundationmay not use one method for satisfying theincome test and another for satisfying oneof the three alternative tests. Thus, if afoundation meets the income test on the3-out-of-4-year basis for a particular tax

year, it may not use the 4-yearaggregation method for meeting one ofthe three alternative tests for that sameyear.

In completing line 3c(3) of Part XIVunder the aggregation method, the largestamount of support from an exemptorganization will be based on the totalamount received for the 4-year periodfrom any one exempt organization.

A new private foundation must use theaggregation method to satisfy the tests forits first tax year in order to be treated asa private operating foundation from thebeginning of that year. It must continue touse the aggregation method for its 2nd

and 3rd tax years to maintain its status forthose years.

Part XV—SupplementaryInformationq Complete this part only if the foundationhad assets of $5,000 or more at any timeduring the year.q This part does not apply to a foreignfoundation that during its entire period ofexistence received substantially all (85%or more) of its support (other than grossinvestment income) from sources outsidethe United States.Line 2. In the space provided (or in anattachment, if necessary), furnish therequired information about theorganization's grant, scholarship,fellowship, loan, etc., programs. Inaddition to restrictions or limitations onawards by geographical areas, charitablefields, and kinds of recipients, indicate anyspecific dollar limitations or otherrestrictions applicable to each type ofaward the organization makes. Thisinformation benefits the grant seeker andthe foundation. The grant seekers will beaware of the grant eligibility requirementsand the foundation should receive onlyapplications that adhere to these grantapplication requirements.

If the foundation only makescontributions to preselected charitableorganizations and does not acceptunsolicited applications for funds, checkthe box on line 2.Line 3. If necessary, attach a schedulefor lines 3a and 3b that lists separatelyamounts given to individuals and amountsgiven to organizations.Line 3a—Paid during year. List allcontributions, grants, etc., actually paidduring the year, including grants or

contributions that are not qualifyingdistributions under section 4942(g).Include current year payments ofset-asides treated as qualifyingdistributions in the current tax year or anyprior year.Line 3b—Approved for future payment.List all contributions, grants, etc.,approved during the year but not paid bythe end of the year, including the unpaidportion of any current year set-aside.

CAUTION

! Entries such as “ grant ” or “ contribution ” under the column titled Purpose of grant or

contribution are unacceptable. See Completed Example of Form 990-PF found in Package 990-PF, Returns for Private Foundations, for examples that describe the purpose of a grant or contribution.

Part XVI-A—Analysis ofIncome-Producing ActivitiesIn Part XVI-A, analyze revenue items thatare also entered in Part I, column (a),lines 3–11, and on line 5b. Contributionsreported on lines 1 and 2 of Part I are notentered in Part XVI-A. For information onunrelated business income, see theInstructions for Form 990-T and Pub. 598.Columns (a) and (c). In column (a),enter a 6-digit business code, from the listin the Instructions for Form 990-T, toidentify any income reported in column(b). In column (c), enter an exclusioncode, from the list on page 27, to identifyany income reported in column (d). Ifmore than one exclusion code isapplicable to a particular revenue item,select the lowest numbered exclusioncode that applies. Also, if nontaxablerevenues from several sources arereportable on the same line in column (d),use the exclusion code that applies to thelargest revenue source.Columns (b), (d), and (e). For amountsreported in Part XVI-A on lines 1–11,enter in column (b) any income earnedthat is unrelated business income (seesection 512). In column (d), enter anyincome earned that is excluded from thecomputation of unrelated businesstaxable income by Code section 512, 513,or 514. In column (e), enter any relatedor exempt function income; that is, anyincome earned that is related to theorganization's purpose or function whichconstitutes the basis for the organization'sexemption.

Also enter in column (e) any incomespecifically excluded from gross incomeother than by Code section 512, 513, or514, such as interest on state and localbonds that is excluded from tax by section103. You must explain in Part XVI-B anyamount shown in column (e).Comparing Part XVI-A with Part I. Thesum of the amounts entered on each lineof lines 1–11 of columns (b), (d), and (e)of Part XVI-A should equal corresponding




amounts entered on lines 3–11 of Part I,column (a), and on line 5b as shownbelow:

Line 1—Program service revenue. Onlines 1a–g, list each revenue-producingprogram service activity of theorganization. For each program serviceactivity listed, enter the gross revenueearned for each activity, as well asidentifying business and exclusion codes,in the appropriate columns. For line 1g,enter amounts that are payments for

services rendered to governmental units.Do not include governmental grants thatare reportable on line 1 of Part I. Reportthe total of lines 1a–g on line 11 of PartI, along with any other income reportableon line 11.

Program services are mainly thoseactivities that the reporting organizationwas created to conduct and that, alongwith any activities begun later, form thebasis of the organization's currentexemption from tax.

Program services can also include theorganization's unrelated trade or businessactivities. Program service revenue alsoincludes income from program-related

investments (such as interest earned onscholarship loans) as defined in theinstructions for Part IX-B.Line 11. On lines 11a–e, list each “Otherrevenue” activity not reported on lines 1through 10. Report the sum of theamounts entered for lines 11a–e, columns(b), (d), and (e), on line 11, Part I.Line 13. On line 13, enter the total ofcolumns (b), (d), and (e) of line 12.

You may use the following worksheetto verify your calculations.

Part XVI-B—Relationship ofActivities to theAccomplishment of ExemptPurposesTo explain how each amount in column(e) of Part XVI-A was related or exemptfunction income, show the line number ofthe amount in column (e) and give a briefdescription of how each activity reportedin column (e) contributed importantly to

the accomplishment of the organization'sexempt purposes (other than by providingfunds for such purposes). Activities thatgenerate exempt-function income areactivities that form the basis of theorganization's exemption from tax.

Also, explain any income entered incolumn (e) that is specifically excludedfrom gross income other than by Codesection 512, 513, or 514. If no amount isentered in column (e), do not completePart XVI-B.

Example. M, a performing artsassociation, is primarily supported byendowment funds. It raises revenue bycharging admissions to its performances.

These performances are the primarymeans by which the organizationaccomplishes its cultural and educationalpurposes.

M reported admissions income incolumn (e) of Part XVI-A and explained inPart XVI-B that these performances arethe primary means by which itaccomplishes its cultural and educationalpurposes.

Because M also reported interest fromstate bonds in column (e) of Part XVI-A,M explained in Part XVI-B that suchinterest was excluded from gross incomeby Code section 103.

Part XVII—InformationRegarding Transfers To andTransactions andRelationships WithNoncharitable ExemptOrganizationsPart XVII is used to report direct andindirect transfers to (line 1a) and directand indirect transactions with (line 1b) andrelationships with (line 2) any othernoncharitable exempt organization. A“noncharitable exempt organization” isan organization exempt under section501(c) (that is not exempt under section501(c)(3)), or a political organizationdescribed in section 527.

For purposes of these instructions, thesection 501(c)(3) organization completingPart XVII is referred to as the “reportingorganization.”

A noncharitable exempt organization is“related to or affiliated with” the reportingorganization if either:

1. The two organizations share someelement of common control; or

2. A historic and continuingrelationship exists between the twoorganizations.

A noncharitable exempt organization isunrelated to the reporting organization if:

1. The two organizations share noelement of common control, and

2. A historic and continuingrelationship does not exist between thetwo organizations.

An “element of common control” ispresent when one or more of the officers,directors, or trustees of one organizationare elected or appointed by the officers,directors, trustees, or members of theother. An element of common control isalso present when more than 25% of theofficers, directors, or trustees of oneorganization serve as officers, directors,or trustees of the other organization.

A “historic and continuing relationship”exists when two organizations participatein a joint effort to achieve one or morecommon purposes on a continuous orrecurring basis rather than on the basisof one or more isolated transactions oractivities. Such a relationship also existswhen two organizations share facilities,equipment, or paid personnel during theyear, regardless of the length of time thearrangement is in effect.Line 1—Reporting of certain transfersand transactions. Generally, report online 1 any transfer to or transaction witha noncharitable exempt organization evenif the transfer or transaction constitutesthe only connection with the noncharitableexempt organization.

Related organizations. If thenoncharitable exempt organization isrelated to or affiliated with the reportingorganization, report all direct and indirecttransfers and transactions except for

contributions and grants it received.Unrelated organizations. All transfersto an unrelated noncharitable exemptorganization must be reported on line 1a.All transactions between the reportingorganization and an unrelatednoncharitable exempt organization mustbe shown on line 1b unless they meet theexception in the specific instructions forline 1b.Line 1a—Transfers. Answer “Yes” tolines 1a(1) and 1a(2) if the reportingorganization made any direct or indirecttransfers of any value to a noncharitableexempt organization.

A “transfer” is any transaction or

arrangement whereby one organizationtransfers something of value (cash, otherassets, services, use of property, etc.) toanother organization without receivingsomething of more than nominal value inreturn. Contributions, gifts, and grants areexamples of transfers.

If the only transfers between the twoorganizations were contributions andgrants made by the noncharitable exemptorganization to the reporting organization,answer “No.”

Amounts inPart XVI-Aon line . . .

Correspond toAmounts in Part I,column (a), line . . .

1a–g ...................................... 112 ............................................ 113 ............................................ 34 ............................................ 45 and 6.................................. 5b (description

column)7 ............................................ 11

8 ............................................ 69 ............................................ 11 minus any special

event expensesincluded on lines 13through 23 of Part I,column (a)

10 .......................................... 10c11a–e .................................... 11

Line 13, Part XVI-A.............................

Minus: Line 5b, Part I .......................

Note: If line 5b, Part I,reflects a loss, add that amount here instead of subtracting.

Plus: Line 1, Part I .........................

Plus: Line 5a, Part I.......................

Plus: Expenses of special eventsdeducted in computing line 9of Part XVI-A.........................

Equal: Line 12, column (a), of Part I.




Line 1b—Other transactions. Answer“Yes” for any transaction described on line1b(1)–(6), regardless of its amount, if it iswith a related or affiliated organization.

Unrelated organizations. Answer“Yes” for any transaction between thereporting organization and an unrelatednoncharitable exempt organization,regardless of its amount, if the reportingorganization received less than adequateconsideration. There is adequateconsideration when the fair market value

of the goods and other assets or servicesfurnished by the reporting organization isnot more than the fair market value of thegoods and other assets or servicesreceived from the unrelated noncharitableexempt organization. The exceptiondescribed below does not apply totransactions for less than adequateconsideration.

Answer “Yes” for any transactionbetween the reporting organization andan unrelated noncharitable exemptorganization if the “amount involved” ismore than $500. The “amount involved”is the fair market value of the goods,services, or other assets furnished by the

reporting organization.Exception. If a transaction with an

unrelated noncharitable exemptorganization was for adequateconsideration and the amount involvedwas $500 or less, answer “No” for thattransaction.Line 1b(3). Answer “Yes” for transactionsin which the reporting organization waseither the lessor or the lessee.Line 1b(4). Answer “Yes” if eitherorganization reimbursed expensesincurred by the other.Line 1b(5). Answer “Yes” if eitherorganization made loans to the other or ifthe reporting organization guaranteed theother's loans.Line 1b(6). Answer “Yes” if eitherorganization performed services ormembership or fundraising solicitationsfor the other.Line 1c. Complete line 1c regardless ofwhether the noncharitable exemptorganization is related to or closelyaffiliated with the reporting organization.For purposes of this line, “facilities”includes office space and any other land,building, or structure whether owned orleased by, or provided free of charge to,the reporting organization or thenoncharitable exempt organization.

Line 1d. Use this schedule to describethe transfers and transactions for which“Yes” was entered on lines 1a–c above.You must describe each transfer ortransaction for which the answer was“Yes.” You may combine all of the cashtransfers (line 1a(1)) to each organizationinto a single entry. Otherwise, make aseparate entry for each transfer ortransaction.

Column (a). For each entry, enter theline number from line 1a–c. For example,if the answer was “Yes” to line 1b(3),enter “b(3)” in column (a).

Column (d). If you need more space,write “see attached” in column (d) and usean attached sheet for the description. Ifmaking more than one entry on line 1d,specify on the attached sheet whichtransfer or transaction you are describing.Line 2—Reporting of certainrelationships. Enter on line 2 eachnoncharitable exempt organization thatthe reporting organization is related to oraffiliated with, as defined above. If thecontrol factor or the historic and

continuing relationship factor (or both) ispresent at any time during the year,identify the organization on line 2 even ifneither factor is present at the end of theyear.

Do not enter unrelated noncharitableexempt organizations on line 2 even iftransfers to or transactions with thoseorganizations were entered on line 1. Forexample, if a one-time transfer to anunrelated noncharitable exemptorganization was entered on line 1a(2),do not enter the organization on line 2.

Column (b). Enter the exemptcategory of the organization; for example,“501(c)(4).”

Column (c). In most cases, a simpledescription, such as “common directors”or “auxiliary of reporting organization” willbe sufficient. If you need more space,write “see attached” in column (c) and usean attached sheet to describe therelationship. If you are entering more thanone organization on line 2, identify whichorganization you are describing on theattached sheet.

Part XVIII—Public InspectionSee General Instruction Q for informationon making the foundation's annual returnavailable for public inspection and

publishing a notice in a newspaper statingthat the return is available for publicinspection. All domestic privatefoundations (including section 4947(a)(1)nonexempt charitable trusts treated asprivate foundations) are subject to thepublic inspection and notice provisions.Note: The requirement for private foundations to publish a notice in a newspaper and attach a copy of the notice to their return MAY NOT apply. See General Instruction Q. If you do not have to publish the notice and attach a copy,enter N/A on each line.

SignatureThe return must be signed by thepresident, vice president, treasurer,assistant treasurer, chief accountingofficer, or other corporate officer (such astax officer) who is authorized to sign. Areceiver, trustee, or assignee must signany return that he or she is required to filefor a corporation. If the return is filed fora trust, it must be signed by theauthorized trustee or trustees. Sign anddate the form and fill in the signer's title.

If an officer or employee of theorganization prepares the return, the PaidPreparer's space should remain blank. Ifsomeone prepares the return withoutcharge, that person should not sign thereturn.

Generally, anyone who is paid toprepare the organization's tax return mustsign the return and fill in the PaidPreparer's Use Only area.

If you have questions about whether apreparer is required to sign the return,

please contact an IRS office.The paid preparer must complete the

required preparer information and:q Sign it, by hand, in the space providedfor the preparer's signature. (Signaturestamps and labels are not acceptable.)q Give the organization a copy of thereturn in addition to the copy to be filedwith the IRS.

If the box for question 13 of Part VII-Ais checked (section 4947(a)(1) nonexemptcharitable trust filing Form 990-PF insteadof Form 1041), the paid preparer mustalso enter his or her social securitynumber or, if applicable, employer

identification number in the spacesprovided. Otherwise, do not enter thepreparer's social security or employeridentification number.

Paperwork Reduction Act NoticeWe ask for the information on this form tocarry out the Internal Revenue laws of theUnited States. You are required to giveus the information. We need it to ensurethat you are complying with these lawsand to allow us to figure and collect theright amount of tax.

You are not required to provide theinformation requested on a form that is

subject to the Paperwork Reduction Actunless the form displays a valid OMBcontrol number. Books or records relatingto a form or its instructions must beretained as long as their contents maybecome material in the administration ofany Internal Revenue law.

The time needed to complete and filethis form will vary depending on individualcircumstances. The estimated averagetime is:

If you have comments concerning theaccuracy of these time estimates orsuggestions for making this form simpler,we would be happy to hear from you. Youcan write to the Tax Forms Committee,Western Area Distribution Center, RanchoCordova, CA 95743-0001. DO NOT sendthe tax form to this address. Instead, seeWhen and Where To File on page 4.

Recordkeeping ............... . 140 hr., 52 min.

Learning about the lawor the form ...................... 27 hr., 35 min.

Preparing the form ......... 32 hr., 2 min.

Copying, assembling,and sending the form tothe IRS............................. 16 min.




Exclusion Codes

Real property rental income that does notdepend on the income or profits derivedby the person leasing the property and isexcluded by section 512 (b)(3)

16—

General Exceptions Debt-Financed Income

Income exempt from debt- financed(section 514) provisions because at least85% of the use of the property is for theorganization’s exempt purposes. (Note:This code is only for income from the 15% or less non-exempt purpose use.)(section 514(b)(1)(A))

Income from an activity that is notregularly carried on (section 512(a)(1))

01— 30—

Income from an activity in which labor isa material income-producing factor andsubstantially all (at least 85%) of the workis performed with unpaid labor (section513(a)(1))

02—

17— Rent from personal property leased withreal property and incidental (10% or less)in relation to the combined income fromthe real and personal property (section512(b)(3))

Gross income from mortgaged property

used in research activities described insection 512(b)(7), (8), or (9) (section514(b)(1)(C))

31—Section 501(c)(3) organization— Income

from an activity carried on primarily forthe convenience of the organization’smembers, students, patients, visitors,officers, or employees (hospital parkinglot or museum cafeteria, for example)(section 513(a)(2))

03—

18— Gain or loss from the sale of investmentsand other non-inventory property andfrom certain property acquired fromfinancial institutions that are inconservatorship or receivership (sections

512(b)(5) and (16)(A))

19— Gain or loss from the lapse or terminationof options to buy or sell securities or realproperty, and on options and from theforfeiture of good-faith deposits for thepurchase, sale, or lease of investmentreal estate (section 512(b)(5))

Gross income from mortgaged propertyused in any activity described in section513(a)(1), (2), or (3) (section 514(b)(1)(D))

32—

20— Income from research for the UnitedStates; its agencies or instrumentalities;or any state or political subdivision(section 512(b)(7))

Section 501(c)(4) local association ofemployees organized before May 27,1969— Income from the sale ofwork-related clothes or equipment anditems normally sold through vendingmachines; food dispensing facilities; orsnack bars for the convenience ofassociation members at their usual placesof employment (section 513(a)(2))

04— Income from mortgaged property(neighborhood land) acquired for exemptpurpose use within 10 years (section514(b)(3))

33—

21— Income from research conducted by acollege, university, or hospital (section512(b)(8))

Income from mortgaged propertyacquired by bequest or devise (applies toincome received within 10 years from thedate of acquisition) (section 514(c)(2)(B))

34—

22— Income from research conducted by anorganization whose primary activity isconducting fundamental research, theresults of which are freely available to thegeneral public (section 512(b)(9))

Income from the sale of merchandise,substantially all of which (at least 85%)was donated to the organization (section513(a)(3))

05— Income from mortgaged propertyacquired by gift where the mortgage wasplaced on the property more than 5 yearspreviously and the property was held by

the donor for more than 5 years (appliesto income received within 10 years fromthe date of gift (section 514(c)(2)(B))

35—

23— Income from services provided underlicense issued by a federal regulatoryagency and conducted by a religiousorder or school operated by a religiousorder, but only if the trade or businesshas been carried on by the organizationsince before May 27, 1959 (section 512(b)(15))

Specific Exceptions

Section 501(c)(3), (4), or (5) organizationconducting an agricultural or educationalfair or exposition— Qualified publicentertainment activity income (section513(d)(2))

06— Income from property received in returnfor the obligation to pay an annuitydescribed in section 514(c)(5)

36—

Income from mortgaged property thatprovides housing to low and moderateincome persons, to the extent themortgage is insured by the FederalHousing Administration (section 514(c)(6)).(Note: In many cases, this would be exempt function income reportable in column (e). It would not be so in the case of a section 501(c)(5) or (6) organization,for example, that acquired the housing as an investment or as a charitable activity.)

37—

Foreign Organizations

Section 501(c)(3), (4), (5), or (6)organization—Qualified convention andtrade show activity income (section513(d)(3))

07—

Foreign organizations only—Income froma trade or business NOT conducted in theUnited States and NOT derived fromUnited States sources (patrons) (section512(a)(2))

24—Income from hospital services describedin section 513(e)

08—

Income from noncommercial bingo gamesthat do not violate state or local law(section 513(f))

09—

Social Clubs and VEBAs

Section 501(c)(7), (9), or (17)organization—Non-exempt functionincome set aside for a charitable, etc.,purpose specified in section 170(c)(4)(section 512(a)(3)(B)(i))

25—

Income from games of chance conducted

by an organization in North Dakota(section 311 of the Deficit Reduction Actof 1984, as amended)

10— Income from mortgaged real property

owned by: a school described in section170(b)(1)(A)(ii); a section 509(a)(3) affiliatedsupport organization of such a school; asection 501(c)(25) organization; or by apartnership in which any of the aboveorganizations owns an interest if therequirements of section 514(c)(9)(B)(vi) aremet (section 514(c)(9))

38—

Section 501(c)(7), (9), or (17)organization—Proceeds from the sale ofexempt function property that was or willbe timely reinvested in similar property(section 512(a)(3)(D))

26—

Section 501(c)(12) organization—Qualified pole rental income (section513(g))

11—

Income from the distribution of low-costarticles in connection with the solicitationof charitable contributions (section 513(h))

12—

Section 501(c)(9) or (17) organization—Non-exempt function income set aside forthe payment of life, sick, accident, orother benefits (section 512(a)(3)(B)(ii))

27—

Special RulesIncome from the exchange or rental ofmembership or donor list with anorganization eligible to receive charitablecontributions by a section 501(c)(3)organization; by a war veterans’organization; or an auxiliary unit or societyof, or trust or foundation for, a warveterans’ post or organization (section513(h))

13—Section 501(c)(5) organization—Farmincome used to finance the operation andmaintenance of a retirement home,hospital, or similar facility operated by theorganization for its members on propertyadjacent to the farm land (section1951(b)(8)(B) of Public Law 94-455)

39—

Veterans’ Organizations

Section 501(c)(19) organization—Payments for life, sick, accident, or healthinsurance for members or theirdependents that are set aside for thepayment of such insurance benefits or fora charitable, etc., purpose specified insection 170(c)(4) (section 512(a)(4))

28—

Trade or Business

41— Gross income from an unrelated activitythat is regularly carried on but, in light ofcontinuous losses sustained over anumber of tax periods, cannot beregarded as being conducted with themotive to make a profit (not a trade orbusiness)

Modifications and Exclusions

Dividends, interest, payments withrespect to securities loans, annuities,income from notional principal contracts,other substantially similar income fromordinary and routine investments, andloan commitment fees, excluded bysection 512(b)(1)

14—

Section 501(c)(19) organization— Incomefrom an insurance set-aside (see code 28above) that is set aside for payment ofinsurance benefits or for a charitable,etc., purpose specified in section170(c)(4) (Regs. 1.512(a)–4(b)(2))

29—

Royalty income excluded by section512(b)(2)

15—

Annual dues, not exceeding $110 (subjectto inflation), paid to a section 501(c)(5)agricultural or horticultural organization(section 512(d))

40—




Index

A Accounting methods ........................... 4 Accounting period ............................... 4

Adjusted net income ......................... 10 Amended return .................................. 5

Amended returns, state ...................... 4Annual return ...................... 2, 4, 5, 6, 8

Amended ........................................ 5Copies to state officials .................. 4Extension for filing .......................... 5Failure to file timely or completely . 5

Notice requirements ....................... 6 Public inspection ............................ 6

Purpose of form .............................. 2State reporting requirements .......... 4

Termination ..................................... 8When to file .................................... 4Where to file ................................... 5Which parts to complete ................ 2 Assets test ........................................ 24 Attachments ........................................ 9

B Business meals ................................ 13

CCapital gains and losses .................. 16

Basis ............................................. 16 Gains ............................................ 16 Losses .......................................... 16

Charitable donation: Substantiation of ........................... 11

Contributions .................................... 13Copy of old return .............................. 5

Currency ............................................. 8

D Definitions:

Disqualified person ......................... 2 Distributable amount .................... 21

Foundation manager ...................... 2Gross investment income ............... 9Net investment income ................... 9Noncharitable exempt organization 25Nonexempt charitable trust ............ 2Nonoperating private foundation .... 2

Private foundation .......................... 2Private operating foundation .......... 2

Program-related investment ......... 20 Qualifying distributions ................. 22 Significant disposition ..................... 8 Substantial contraction ................... 8

Taxable private foundation ............. 2 Depository methods ........................... 6

Electronic deposit ........................... 6Tax deposit coupon ........................ 6

Depreciation ..................................... 12 Disqualified person ............................. 2 Disregarded entity ........................ 2, 19 Dissolution .......................................... 8

Distributable amount ........................ 21

E EFTPS ................................................ 6

Elections ............................... 16, 22, 23 Electronic deposit ............................... 6 Endowment test ................................ 24 Estimated tax ...................................... 5

Penalty ............................................ 5Estimated tax penalty ......................... 5Excise tax based on investment

income .................................... 16, 17Domestic exempt private

foundations ............................... 16Domestic taxable private

foundations and section4947(a)(1) nonexempt charitabletrusts ......................................... 16 Foreign organizations ................... 17

Exempt operating foundationqualification ................................... 17 Exemption applications ...................... 7

Extension for filing .............................. 5

FFailure to file timely or completely ..... 5Failure to pay tax when due .............. 5Federal tax deposit coupon ................ 6

Filing extension .................................. 5Foreign organizations ............... 7, 9, 17

Foundation manager .......................... 2

G Gifts .................................................. 13 Grants ............................................... 13

Gross investment income ................... 9 Gross profit ....................................... 12

I Income test ....................................... 24

Inventory ........................................... 12

L Liquidation .......................................... 8

MMinimum investment return .............. 20

NNet investment income ................. 9, 13

Business meals ............................ 13 Newspaper notice ......................... 6, 26Penalty for failure to publish .......... 6

Noncharitable exempt organization .. 25Nonexempt charitable trust ...... 2, 5, 18

Nonoperating privatefoundation ........................... 2, 10, 12 Notice requirements ........................... 6

O Other expenses ................................ 13

P Penalties:Against responsible person ............ 5

Estimated tax .................................. 5Failure to disclose quid pro quo

contributions ............................. 11Failure to file timely or completely . 5Failure to pay timely ....................... 5Failure to publish notice ................. 6 Private foundation .............................. 2

Private operating foundation .. 2, 10, 24 Program services ............................. 25

Program-related investment . 16, 20, 22Public inspection .................. 6, 7, 8, 26

Annual return .................................. 6 Exemption applications .................. 7 Relief .............................................. 8

QQualifying distributions ......... 10, 12, 22

Amounts set aside ........................ 22

R Rounding ............................................ 8

S Self-dealing ....................................... 18

SFAS No. 116 .................. 4, 11, 14, 16SFAS No. 117 .................................. 15

Signature .......................................... 26 Significant disposition ......................... 8 Significant involvement ..................... 19

Special payment option ...................... 6State reporting requirements .............. 4

Amended returns ............................ 4 Substantial contraction ....................... 8 Support test ...................................... 24

TTax payment methods:

Depository method ......................... 6Special payment option .................. 6

Taxable private foundation ............. 2, 5 Termination ..................................... 8, 9

Annual return .................................. 8 Special rules ................................... 8

Travel ................................................ 13

WWhen to file .................................... 4, 5

Extension ........................................ 5Where to file ....................................... 5

Which parts to complete .................... 2Who must file ..................................... 2

Documents

US Internal Revenue Service: i990pf--1999