Form 990-PF Filing Instructions for Private Foundations

- Updated April 23, 2020 - 8.00 AM - Admin, ExpressTaxExempt

Every year, Private Foundations must report to the IRS their revenue, expenses, direct charitable activities in organizations, capital gains, losses, officer details, distributable amount, qualifying distributions, and their income-producing activities. The information is to be reported through Form 990-PF.

Organizations must report Form 990-PF before the 15th day of 5th month after the accounting period ends.

IRS requires all Private Foundations to make their Form 990-PF annual return and all related supporting documents available to the public.

1. What is the purpose of IRS Form 990-PF?

IRS Form 990-PF is used by private foundations to report charitable distributions, activities, and taxes based on the investment income.

Learn more about Form 990-PF

2. When is the deadline to file Form 990-PF?

Generally, the Organization must file Form 990-PF before the 15th day of the 5th Month after the tax period ends.

For calendar tax year filers whose tax period ends on December 31, the deadline to file Form 990-PF is
May 15, 2020.

Check out the deadlines for organizations whose tax period ends other than December 31.

Tax year End Date Due Date
November 30 October 15
October 31 September 15
September 30 August 15
August 31 July 15
July 31 June 15
June 30 May 15
May 31 April 15
April 30 March 15
March 31 February 15
February 28/29 January 15
January 31 December 15

To find out the Form 990 deadlines, please visit https://www.expresstaxexempt.com/form-990-due-date/

3. Instructions on How to Fill Out Form 990-PF?

These instructions will help you with completing the filing process of Form 990-PF.

Basic Information about your Organization

Before proceeding further in filling out revenue and other details, IRS requires you to complete a few basic information about your organization

  • The foundation name, EIN, address, and telephone number.
  • Check the Box C, if your exempt application status is pending, and Box D if it is a foreign organization. If the foreign organization meets the 85% test, check Box D(2) and attach computation.
  • Check the Box E, if your private foundation was terminated under section 507(b)(1)(A).
  • Check the Box F, if your foundation is in a 60-month termination under 507(b)(1)(B).
  • Check the Box G, if you are filing an Initial return/Initial return of a former public charity/Final return/Amended return/Address change/Name change.
  • Check the Box H, if your organization falls under any one of the categories:
    • Section 501(c)(3) exempt private foundation
    • Section 4947(a)(1) nonexempt charitable trust
    • Other taxable private foundation
  • Enter in Box I, the Fair market value of all assets at the end of the year from Part II, col. C, line 16.
  • Choose your accounting method in Box J (Cash/Accrual/Other).

Instructions to complete Form 990-PF Part 1 - Analysis of Revenue and Expense

Part 1 - Analysis of Revenue and Expense
  • Line 1-12 is all about the Revenue for the tax year.
    Enter the values of contributed amount, gifts, interest on savings, dividends, interest from securities, gross rents, capital gain net income, net short-term capital gain, and other income in the following columns:
  • (a) Revenue and expenses per books
  • (b) Net investment income
  • (c) Adjusted net income
  • (d) Disbursements for charitable purposes

Note: If the contributions is $5000 or more, you will need to attach Schedule B.

  • Line 13 -26 is all about Operating and Administrative Expenses for the tax year. Enter the values of employee salaries and wages spent for the tax year, Compensation given to officers, directors, and trustees, pension plans, employee benefits, travel expenses, conferences, and meetings.

Instructions to complete Form 990-PF Part II - Balance Sheet

Part II - Balance Sheet
  • Line 1- 16 is all about Assets. Enter the value for the beginning year and end of the year. That total must be balanced. The balance sheet consists of details such as Cash—non-interest-bearing, Savings and temporary cash investments, Grants receivable, Prepaid expenses and deferred charges, Investments—mortgage loans, and other assets.
  • Line 17-23 is all about Liabilities. Enter the liability details such as deferred revenue, grants payable, loans from officers, directors, trustees, and other disqualified persons.
  • Line 24-30 is all about Net Assets or Fund Balances. Enter the asset or fund balance details such as net assets without donor restrictions, net assets with donor restrictions, Capital stock, trust principal, current funds and retained earnings, accumulated income, endowment, and any other funds.

Instructions to complete Form 990-PF Part III - Analysis of Changes in Net Assets or Fund Balances

Part III - Analysis of Changes in Net Assets or Fund Balances
  • Line 1- 16 is all about Assets. Enter the value for the beginning year and end of the year. That total must be balanced. The balance sheet consists of details such as Cash—non-interest-bearing, Savings and temporary cash investments, Grants receivable, Prepaid expenses and deferred charges, Investments—mortgage loans, and other assets.
  • Any excess of revenue or expenses at the end of the tax year can generally be attributed to a change in an organization’s net assets.
  • Any changes in an organization’s net assets must be addressed in this section of the form.

Instructions to complete Form 990-PF Part IV - Capital Gains and Losses for Tax on Investment Income

Part IV - Capital Gains and Losses for Tax on Investment Income
  • Part IV is all about reporting the gains and losses in terms of long term and short term investment income.
    • The foundation must report capital gains or losses made from the sale of property.
    • Capital gains are considered to be short-term if they are realized on an asset within one year.
    • When an asset is held longer than a year, it is considered a long term investment for tax purposes.

Instructions to complete Form 990-PF Part V - Qualification Under Section 4940(e) for Reduced Tax on Net Investment Income

Part V - Qualification Under Section 4940(e) for Reduced Tax on Net Investment Income
  • Enter the appropriate amount of qualifying distributions, net value of noncharitable-use assets, and distribution ratio for each year.
  • This portion of the form will determine if the organization qualifies for a reduced 1% tax on net investment income as opposed to the standard 2% tax.
  • Please note that organizations in their first year of existence are not eligible for this reduced tax rate.

Instructions to complete Form 990-PF Part VI - Excise Tax Based on Investment Income (Section 4940(a), 4940(b), 4940(e), or 4948—see instructions)

Part VI -  Excise Tax Based on Investment Income (Section 4940(a), 4940(b), 4940(e), or 4948—see instructions)
  • If your foundation is best described in section 4940(d)(2), check the box or enter as “N/A”.
  • If your domestic foundation meets the section 4940(e) requirements in Part V, check the box and enter 1% of Part I, line 27b.

    Note: Part V decided the 1% value.

  • Enter the tax based on investment income, any penalty for underpayment of estimated tax, and tax due and overpayment.

Instructions to complete Form 990-PF Part VII-A - Statements Regarding Activities

Part VII-A - Part VIII Statements Regarding Activities
  • Enter the tax based on investment income, any penalty for underpayment of estimated tax, and tax due and overpayment.

Instructions to complete Form 990-PF Part VIII - Information About Officers, Directors, Trustees, Foundation Managers, Highly Paid Employees, and Contractors

Part VIII - Information About Officers, Directors, Trustees, Foundation Managers, Highly Paid Employees, and Contractors
  • Enter the name of Officers, Directors, Trustees, Foundation Managers, Highly Paid Employees, and Contractors details in column (a). In column (b), their title, and average hours per week devoted to position. In column (c), the compensation (if not paid, enter 0). In column (d), the contributions to employee benefit plans and deferred compensation. And in column (e), the expense account and other allowances.
  • Enter the compensation amounts of the five highest-paid employees (other than those included in line 1—see instructions). If none, enter “NONE.”

Instructions to complete Form 990-PF Part IX - Summary of Direct Charitable Activities

Part IX - Summary of Direct Charitable Activities
  • Summarize the charitable activities events and expenses made during the tax year and include relevant statistical information such as the number of organizations and other beneficiaries served, conferences convened, research papers produced, etc.

Instructions to complete Form 990-PF Part IX-B - Summary of Program-Related Investments

Part IX-B - Summary of Program-Related Investments
  • Summarize the largest program-related investment made by your organization during the tax year in Line 1 and 2 and in Line 3 describe any other related events.

Instructions to complete Form 990-PF Part X - Minimum Investment Return

Part X -  Minimum Investment Return
  • All domestic foundations must complete Part X
  • List out the minimum investment value for the tax year, and that should include only those assets that aren't actually used or held by the organization for a charitable, educational, or other similar function that contributed to the charitable status of the foundation.
  • Cash on hand and on deposit is considered used or held for the use of charitable purposes only to the extent of the reasonable cash balances reported in Part X, line 4.

Instructions to complete Form 990-PF Part XI - Distributable Amount

Part XI - Distributable Amount
  • Section 4942(j)(3) and (j)(5) private operating foundations and certain foreign organizations do not need to complete this section.
  • Part XI refers to the monetary amount for the tax year that the foundation must distribute by the end of 2020 as qualifying distributions to avoid the 30% tax on the undistributed portion.

Instructions to complete Form 990-PF Part XII - Qualifying Distributions

“Qualifying distributions” are amounts spent or amount set aside for religious, educational, or similar charitable purposes.

Part XII - Qualifying Distributions
  • Line 1a. Expenses, contributions, gifts, etc
  • Line 1b. Program-related investments.
  • Line 3. Amounts set aside. Amounts set aside may be treated as qualifying distributions only if the organization establishes to the satisfaction of the IRS that the amount will be paid for the specific project within 60 months from the date of the first set-aside and meets (1) or (2) below.
    • 1. The project can be better accomplished by a set-aside than by the immediate payment of funds (suitability test).
    • 2. The private foundation meets the requirements of section 4
    • Line 5. Reduced tax on investment income under section 4940(e)

Instructions to complete Form 990-PF Part XIII - Undistributed Income

Part XIII. Undistributed Income

Non-operating foundations must complete part XIII of Form 990-PF.

The purpose of this undistributed income part is to enable the foundation to comply with the rules for applying its qualifying distributions for the year 2019.

In appealing the qualifying distributions, there are three basic steps.

  • Reduce any undistributed income for 2018.
  • The organization may use any part of or all remaining qualifying distributions for 2019 to satisfy elections.
  • If no elections are involved, apply remaining qualifying distributions to the 2019 distributable amount on line 4d. If the remaining qualifying distributions are greater than the 2019 distributable amount, the excess is treated as a distribution out of corpus on line 4e.
  • Enter the amount of excess distributions carryover, for the tax year starting from (2014 - 2019).

Instructions to complete Form 990-PF Part XIV - Private Operating Foundations

Part XIV - Private Operating Foundations
  • All organizations that claim status as private operating foundations under section 4942(j)(3) or (5) for 2019 must complete this section.
  • Part XIV reports the private foundation’s ruling or determination date, and under what section (4942(j)(3) or 4942(j)(5)), the private foundation is described.

Instructions to complete Form 990-PF Part XV - Supplementary Information

Part XV - Supplementary Information
  • Complete this part only if the foundation had assets of $5,000 or more at any time during the year.
  • This part consists of details such as information regarding foundation managers, information regarding contribution, Grant, Gift, Loan, Scholarship, etc., programs and grants and contributions paid during the year or approved for future payment.

Instructions to complete Form 990-PF Part XVII - Information Regarding Transfers to and Transactions and Relationships With Noncharitable Exempt Organizations

Part XVII. Information Regarding Transfers to and Transactions and Relationships With Noncharitable Exempt Organizations
  • Part XVII reports certain transfers and transactions and other transaction such as:
    • Sales of assets to a noncharitable exempt organization
    • Purchases of assets from a noncharitable exempt organization
    • Rental of facilities, equipment, or other assets
    • Reimbursement arrangements
    • Loans or loan guarantees
    • Performance of services or membership or fundraising solicitations

Signature

  • The president, vice president, treasurer, assistant treasurer, chief accounting officer, or other corporate officers (such as a tax officer) who is authorized must sign the return.
  • A receiver, trustee, or assignee must sign any return that he or she is required to file for a corporation. If the return is filed for a trust, the authorized trustee or trustees must sign. Sign and date the form and fill in the signer's title.

4. Instructions about Form 990-PF Schedule B

Attach Schedule B with the Form 990-PF, if contributors directly or indirectly, contribute $5000 or more in terms of money, securities, or other property during the tax year.

If the foundation isn't required to complete Schedule B (no person contributed $5,000 or more), be sure to check the box on line 2.

Schedule B is open to public inspection for an organization that files Form 990-PF. There are three parts to complete Schedule B 990-PF.

  • Part I - Contributors
  • Part II - Noncash Property
  • Part III - Exclusively religious, charitable, etc., contributions to organizations described in section 501(c)(7), (8), or (10) that total more than $1,000 for the year from any one contributor. Complete columns (a) through (e) and the following line entry. For organizations completing Part III, enter the total of exclusively religious, charitable, etc., contributions of $1,000 or less for the year.

Learn More about 990-PF Schedule B

5. How to File 990-PF electronically

The Taxpayer First Act, enacted July 1, 2019, requires tax-exempt organizations to file all the 990 and related forms electronically. i.e., organization's tax year beginning on or after July 2, 2019, must file their 990 returns electronically..

To File 990-PF electronically, get started with an IRS authorized provider like ExpressTaxExempt. Then follow our step by step instructions to complete Form 990-PF.

  • Enter Organization Details
  • Complete Form 990-PF Details
  • Review your Form information
  • Pay and transmit directly to the IRS

E-file your Form 990-EZ with our Software

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