Return of Private Foundation or Section 4947(a)(1)
Nonexempt Charitable Trust Treated as a Private Foundation

Line Instructions

Line 1 - Contributions, gifts, grants, etc., received. Enter the total of gross contributions, gifts, grants, and similar amounts received.

Schedule B. If money, securities, or other property valued at $5,000 or more was received directly or indirectly from any one person during the year, complete Schedule B and attach it to the return. If the foundation is not required to complete Schedule B (no person contributed $5,000 or more), be sure to check the box on line 1.

To determine whether a person has contributed $5,000 or more, total only gifts of $1,000 or more from each person. Separate and independent gifts need not be totaled if less than $1,000. If a contribution is in the form of property, describe the property and include its fair market value.

The term person includes individuals, fiduciaries, partnerships, corporations, associations, trusts, and exempt organizations.

Split-interest trusts. Distributions from split-interest trusts should be entered on both line 1 of column (a) and line 2 of column (b). They are a part of the amount on line 1.

Change in accounting method to conform with SFAS 116. If the private foundation changed its accounting method for tax purposes to conform with SFAS 116 and part or all of its net asset adjustment (section 481(a) adjustment) represents contributions, then include on Schedule B any contributor of an amount that is included in the adjustment and meets the requirements above. Report the contributors that meet these requirements in the year of the change.

Substantiation requirements. An organization must keep records, required by the regulations under section 170, for all its charitable contributions.

Generally, a donor making a charitable contribution of $250 or more will not be allowed a Federal income tax deduction unless the donor obtains a written acknowledgment from the donee organization by the earlier of the date on which the donor files a tax return for the tax year in which the contribution was made or the due date, including extensions, for filing that return. However, see section 170(f)(8) and Regulations section 1.170A-13 for exceptions to this rule.

The written acknowledgment the foundation provides to the donor must show:

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, and
4. A description and a good-faith estimate of the value of any goods or services the foundation gave in return for the contribution, unless:
   1. The goods and services have insubstantial value, or
   2. A statement is included that these goods and services consist solely of intangible religious benefits.

Generally, if a charitable organization solicits or receives a contribution of more than $75 for which it gives the donor something in return (a quid pro quo contribution), the organization must inform the donor, by written statement, that the amount of the contribution deductible for Federal income tax purposes is limited to the amount by which the contribution exceeds the value of the goods or services received by the donor. The written statement must also provide the donor with a good-faith estimate of the value of goods or services given in return for the contribution.

Penalties. An organization that does not make the required disclosure for each quid pro quo contribution will incur a penalty of $10 for each failure, not to exceed $5,000 for a particular fundraising event or mailing, unless it can show reasonable cause for not providing the disclosure.

For more information. See Regulations section 1.170A-13 for more information on charitable recordkeeping and substantiation requirements.

Line 2 - Certain distributions from split-interest trusts described in section 4947(a)(2). The income portion of distributions from split-interest trusts that was earned on amounts placed in trust after May 26, 1969, is treated as investment income. Include only the income portion of these distributions on line 2. That same figure is a part of line 1.

Line 3 - Interest on savings and temporary cash investments.

In column (a), enter the total amount of interest income from investments of the type reportable in Balance Sheets, Part II, line 2. These include savings or other interest-bearing accounts and temporary cash investments, such as money market funds, commercial paper, certificates of deposit, and U.S. Treasury bills or other government obligations that mature in less than 1 year.

In column (b), enter the amount of interest income shown in column (a). Do not include interest on tax-exempt government obligations.

In column (c), enter the amount of interest income shown in column (a). Include interest on tax-exempt government obligations.

Line 4 - Dividends and interest from securities.

In column (a), enter the amount of dividend and interest income from securities (stocks and bonds) of the type reportable in Balance Sheets, Part II, line 10. Include amounts received from payments on securities loans, as defined in section 512(a)(5). Do not include any capital gain dividends reportable on line 6. Report income from program-related investments on line 11. For debt instruments with an original issue discount, report the original issue discount ratably over the life of the bond on line 4. See section 1272 for more information.

In column (b), enter the amount of dividend and interest income, and payments on securities loans from column (a). Do not include interest on tax-exempt government obligations.

In column (c), enter the amount of dividends and interest income, and payments on securities loans from column (a). Include interest on tax-exempt government obligations.

Line 5a - Gross rents.

In column (a), enter the gross rental income for the year from investment property reportable on line 11 of Part II.

In columns (b) and (c), enter the gross rental income from column (a).

Line 5b - Net rental income or (loss). Figure the net rental income or (loss) for the year and enter that amount on the entry line to the left of column (a).

Report rents from other sources on line 11, Other income. Enter any expenses attributable to the rental income reported on line 5, such as interest and depreciation, on lines 13-23.

Line 6a - Net gain or (loss) from sale of assets. Enter the net gain or (loss) per books from all asset sales not included on line 10.

For assets sold and not included in Part IV, attach a schedule showing:

• Date acquired,
• Manner of acquisition,
• Gross sales price,
• Cost, other basis, or value at time of acquisition (if donated) and which of these methods was used,
• Date sold,
• To whom sold,
• Expense of sale and cost of improvements made subsequent to acquisition, and
• Depreciation since acquisition (if depreciable property).

Line 6b - Gross sales price for all assets on line 6a. Enter the gross sales price from all asset sales whose net gain or loss was reported on line 6a.

Line 7 - Capital gain net income. Enter the capital gain net income from Part IV, line 2. See Part IV instructions.

Line 8 - Net short-term capital gain.

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 exchanged that were held not more than 1 year). Do not include a net long-term capital gain or a net loss in column (c).

Do not include on line 8 a net gain from the sale or exchange of depreciable property, or land used in a trade or business (section 1231) and held for more than 1 year. However, include a net loss from such property on line 23 as an Other expense.

In general, organizations may carry to line 8 the net short-term capital gain reported on Part IV, line 3. However, if the foundation had any short-term capital gain from sales of debt-financed property, add it to the amount reported on Part IV, line 3, to figure the amount to include on line 8. For the definition of debt-financed property, see the instructions for Form 990-T.

Line 9 - Income modifications. Include on this line:

• Amounts received or accrued as repayments of amounts taken into account as qualifying distributions (see the instructions for Part XII for an explanation of qualifying distributions) for any year.
• Amounts received or accrued from the sale or other disposition of property to the extent that the acquisition of the property was considered a qualifying distribution for any tax year.
• Any amount set aside for a specific project (see explanation in the instructions for Part XII) that was not necessary for the purposes for which it was set aside.
• Income received from an estate, but only if the estate was considered terminated for income tax purposes due to a prolonged administration period.
• Amounts treated in an earlier tax year as qualifying distributions to:
  1. A nonoperating private foundation, if the amounts were not redistributed by the grantee organization by the close of its tax year following the year in which it received the funds, or
  2. An organization controlled by the distributing foundation or a disqualified person if the amounts were not redistributed by the grantee organization by the close of its tax year following the year in which it received the funds.

Lines 10a, b, c - Gross profit from sales of inventory. Enter the gross sales (less returns and allowances), cost of goods sold, and gross profit or (loss) from the sale of all inventory items, including those sold in the course of special events and activities. These inventory items are the ones the organization either makes to sell to others or buys for resale.

Do not report any sales or exchanges of investments on line 10.

Do not include any profit or (loss) from the sale of capital items such as securities, land, buildings, or equipment on line 10. Enter these amounts on line 6a.

Do not include any business expenses such as salaries, taxes, rent, etc., on line 10. Include them on lines 13-23.

Attach a schedule showing the following items: Gross sales, Cost of goods sold, Gross profit or (loss). These items should be classified according to type of inventory sold (such as books, tapes, other educational or religious material, etc.). The totals from the schedule should agree with the entries on lines 10a-10c.

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

Line 11 - Other income. Enter the total of all the foundation's other income for the year. Attach a schedule that gives a description and the amount of the income. Include all income not reported on lines 1 through 10c. Also, see the instructions for Part XVI-A, line 11.

Include imputed interest on certain deferred payments figured under section 483 and any investment income not reportable on lines 3 through 5, including income from program-related investments (defined in the instructions for Part IX-B).

Do not include unrealized gains and losses on investments carried at market value. Report those as fund balance or net asset adjustments in Part III.

In column (b), enter the amount of investment income included in line 11, column (a). Include dividends, interest, rents, and royalties derived from assets devoted to charitable activities, such as interest on student loans.

In column (c), include all other items includible in adjusted net income not covered elsewhere in column (c).

Line 12 - Total. In column (b), domestic organizations should enter the total of lines 2-11. Exempt foreign organizations, enter the total of lines 3, 4, 5, and 11 only.

Line 13 - Compensation of officers, directors, trustees, etc.

In column (a), enter the total compensation for the year of all officers, directors, and trustees. If none was paid, enter zero. Complete line 1 of Part VIII to show the compensation of officers, directors, trustees, and foundation managers.

In columns (b), (c), and (d), enter the portion of the compensation included in column (a) that is applicable to the column. For example, in column (c) enter the portion of the compensation included in column (a) that was paid or incurred to produce or collect income included in column (c).

Line 14 - Other employee salaries and wages. Enter the salaries and wages of all employees other than those included on line 13.

Line 15 - Contributions to employee pension plans and other benefits. Enter the employer's share of the contributions the organization paid to qualified and nonqualified pension plans and the employer's share of contributions to employee benefit programs (such as insurance, health, and welfare programs) that are not an incidental part of a pension plan. Complete the return/report of the Form 5500 series appropriate for the organization's plan. (See the Instructions for Form 5500 for information about employee welfare benefit plans required to file that form.)

Also include the amount of Federal, state, and local payroll taxes for the year, but only those that are imposed on the organization as an employer. This includes the employer's share of social security and Medicare taxes, FUTA tax, state unemployment compensation tax, and other state and local payroll taxes. Do not include taxes withheld from employees' salaries and paid over to the various governmental units (such as Federal and state income taxes and the employee's share of social security and Medicare taxes).

Lines 16a, b, and c - Legal, accounting, and other professional fees. On the appropriate line(s), enter the amount of legal, accounting, auditing, and other professional fees (such as fees for fundraising or investment services) charged by outside firms and individuals who are not employees of the foundation.

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

Report any fines, penalties, or judgments imposed against the foundation as a result of legal proceedings on line 23, Other expenses.

Line 18 - Taxes. Attach a schedule listing the type and amount of each tax reported on line 18. Do not enter any taxes included on line 15.

In column (a), enter the taxes paid (or accrued) during the year. Include all types of taxes recorded on the books, including real estate tax not reported on line 20; the tax on investment income; and any income tax.

In column (b), enter only those taxes included in column (a) that are related to investment income taxable under section 4940. Do not include the section 4940 tax paid or incurred on net investment income or the section 511 tax on unrelated business income. Sales taxes may not be deducted separately, but must be treated as a part of the cost of acquired property, or as a reduction of the amount realized on disposition of the property.

In column (c), enter only those taxes included in column (a) that relate to income included in column (c). Do not include any excise tax paid or incurred on the net investment income (as shown in Part VI), or any tax reported on Form 990-T.

In column (d), do not include any excise tax paid on investment income (as reported in Part VI of this return or the equivalent part of a return for prior years) unless the organization is claiming status as a private operating foundation and completes Part XIV.

Line 19 - Depreciation and depletion.

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

For depreciation, attach a schedule showing:

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), and
7. The depreciation this year.

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

In columns (b) and (c), a deduction for depreciation is allowed only for property used in the production of income reported in the column, and only using the straight line method of computing depreciation. A deduction for depletion is allowed but must be figured only using the cost depletion method.

The basis used in figuring depreciation and depletion is the basis determined under normal basis rules, without regard to the special rules for using the fair market value on December 31, 1969, that relate only to gain or loss on dispositions for purposes of the tax on net investment income.

Line 20 - Occupancy. Enter the amount paid or incurred for the use of office space or other facilities. If the space is rented or leased, enter the amount of rent. If the space is owned, enter the amount of mortgage interest, real estate taxes, and similar expenses, but not depreciation (reportable on line 19). In either case, include the amount for utilities and related expenses (e.g., heat, lights, water, power, telephone, sewer, trash removal, outside janitorial services, and similar services). Do not include any salaries of the organization's own employees that are reportable on line 15.

Line 21 - Travel, conferences, and meetings. Enter the expenses for officers, employees, or others during the year for travel, attending conferences, meetings, etc. Include transportation (including fares, mileage allowance, or automobile expenses), meals and lodging, and related costs whether paid on the basis of a per diem allowance or actual expenses incurred. Do not include any compensation paid to those who participate.

In column (b), only 50% of the expense for business meals, etc., paid or incurred in connection with travel, meetings, etc., relating to the production of investment income, may be deducted in figuring net investment income (section 274(n)).

In column (c), enter the total amount of expenses paid or incurred by officers, employees, or others for travel, conferences, meetings, etc., related to income included in column (c).

Line 22 - Printing and publications. Enter the expenses for printing or publishing and distributing any newsletters, magazines, etc. Also include the cost of subscriptions to, or purchases of, magazines, newspapers, etc.

Line 23 - Other expenses. Enter all other expenses for the year. Include all expenses not reported on lines 13-22. Attach a schedule showing the type and amount of each expense.

If a deduction is claimed for amortization, attach a schedule showing:

• Description of the amortized expenses;
• Date acquired, completed, or expended;
• Amount amortized;
• Deduction for prior years;
• Amortization period (number of months);
• Current-year amortization; and
• Total amount of amortization.

In column (c), in addition to the applicable portion of expenses from column (a), include any net loss from the sale or exchange of land or depreciable property that was held for more than 1 year and used in a trade or business.

A deduction for amortization is allowed but only for assets used for the production of income reported in column (c).

Line 25 - Contributions, gifts, grants paid.

In column (a), enter the total of all contributions, gifts, grants, and similar amounts paid (or accrued) for the year. List each contribution, gift, grant, etc., in Part XV, or attach a schedule of the items included 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:
   1. Blood,
   2. Marriage,
   3. Adoption, or
   4. 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 of any indigent person who received one or more gifts or grants from the foundation unless that individual is a disqualified person or one who received a total of more than $1,000 from the foundation during the year.

Activities should be classified according to purpose and in greater detail than merely classifying them as charitable, educational, religious, or scientific activities. For example, use identification such as: payments for nursing service, for fellowships, or for assistance to indigent families.

Foundations may include, as a single entry on the schedule, the total of amounts paid as grants for which the foundation exercised expenditure responsibility. Attach a separate report for each grant.

When the fair market value of the property at the time of disbursement is the measure of a contribution, the schedule must also show:

1. A description of the contributed property,
2. The book value of the contributed property,
3. The method used to determine the book value,
4. The method used to determine the fair market value, and
5. The date of the gift.

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 all contributions, gifts, and grants the foundation paid during the year.

• Do not include contributions to organizations controlled by the foundation or by a disqualified person (see General Instruction C for definitions). Do not include contributions to nonoperating private foundations unless the donees are exempt from tax under section 501(c)(3), they redistribute the contributions, and they maintain sufficient evidence of redistributions according to the regulations under section 4942(g).
• Do not reduce the amount of grants paid in the current year by the amount of grants paid in a prior year that was returned or recovered in the current year. Report those repayments in column (c), line 9, and in Part XI, line 4a.
• Do not include any payments of set-asides (see instructions for Part XII, line 3) taken into account as qualifying distributions in the current year or any prior year. All set-asides are included in qualifying distributions (Part XII, line 3) in the year of the set-aside regardless of when paid.
• Do not include current year's write-offs of prior years' program-related investments. All program-related investments are included in qualifying distributions (Part XII, line 1b) in the year the investment is made.
• Do not include any payments that are not qualifying distributions as defined in section 4942(g)(1).

Net Amounts

Line 27a - Excess of revenue over expenses. 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 by which net assets (or fund balances) have increased or decreased for the year. See the instructions for Part III, Analysis of Changes in Net Assets or Fund Balances.

Line 27b - Net investment income. Domestic organizations, subtract line 26 from line 12. Enter the result. Exempt foreign organizations, enter the amount shown on line 12. However, if the organization is a domestic organization and line 26 is more than line 12 (i.e., expenses exceed income), enter zero (not a negative amount).

Line 27c - Adjusted net income. Subtract line 26, column (c) from line 12, column (c) and enter the result.

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