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Private Foundation Minimum Distribution Calculator5 Percent Payout and Distributable Amount

What do these figures come to once the work is shown?

Minimum investment return, the 1.39 percent excise tax on net investment income and the distributable amount from Form 990-PF Parts IX and X.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Distributable amount
$585,440
Must be paid out as qualifying distributions by the end of next year
Minimum investment return (5%)
$591,000
Cash deemed held for charitable activities (1.5%)
$180,000
Drawn to one scale
Distributable amount$585,440
Minimum investment return (5%)$591,000
Cash deemed held for charitable activities (1.5%)$180,000
Net value of noncharitable-use assets$11,820,000
Excise tax on net investment income (1.39%)$5,560
All results
MeasureResult
Distributable amount$585,440
Minimum investment return (5%)$591,000
Cash deemed held for charitable activities (1.5%)$180,000
Net value of noncharitable-use assets$11,820,000
Excise tax on net investment income (1.39%)$5,560
How this was worked out
Work shownrecomputed as you type
Net value = FMV of noncharitable-use assets - acquisition indebtedness - 1.5% cash deemed held for charitable activities
Minimum investment return = 5% x net value
Distributable amount = minimum investment return - section 4940 tax - income tax + recoveries

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Net value = FMV of noncharitable-use assets - acquisition indebtedness - 1.5% cash deemed held for charitable activities
  • Minimum investment return = 5% x net value
  • Distributable amount = minimum investment return - section 4940 tax - income tax + recoveries

How it works

Section 4942(e) sets a private foundation's minimum investment return at 5 percent of the fair market value of assets not used directly in its exempt purpose, less acquisition indebtedness. Regulations section 53.4942(a)-2 deems the reasonable cash balances held for charitable activities to be 1.5 percent of that value unless the IRS allows a larger amount, which Form 990-PF Part IX line 4 deducts.

The distributable amount in Part X is the minimum investment return reduced by the section 4940 tax (1.39 percent of net investment income) and income tax, plus recoveries of earlier qualifying distributions. The foundation must make qualifying distributions of that amount by the end of the next tax year or face the 30 percent tax on undistributed income. Private operating foundations and short tax years follow different rules not applied here.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Are program-related assets in the base?

No. Assets used or held for use directly in carrying out the exempt purpose are excluded from the 5 percent base.

How is the fair market value of securities measured?

Section 4942(e)(2)(A) determines the value of securities with readily available market quotations on a monthly basis.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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