Form 990-PF Filing Checklist for Tax Year 2016
Overview and Applicability
Form 990-PF is the annual return for private foundations and Section 4947(a)(1) trusts treated as private foundations for tax year 2016. This filing year is not subject to stimulus reconciliation, Affordable Care Act shared responsibility payments, Tax Cuts and Jobs Act provisions, American Rescue Plan Act rules, unemployment exclusions, or year-specific charitable deductions.
The form continues established private foundation excise tax rules under Sections 4940, 4941 through 4945, and 4942. No substantive line redesigns or schedule additions were introduced in the 2016 version compared to those in the immediately prior years. The instructions clarify the mechanics of Part V (Section 4940(e) reduced-tax qualification), Part X (minimum investment return and noncharitable-use asset valuation), and Part XIII (undistributed income carryover).
Form 990-PF itself does not require Form 4720 (Excise Tax Return), but Form 4720 filing obligations arise independently if Part VII-B questions are answered affirmatively and no exception applies.
Foundation Status and Filing Requirement
Confirm the entity is either a domestic private foundation under Section 501(c)(3) or a Section 4947(a)(1) nonexempt charitable trust treated as a private foundation. Obtain a copy of the IRS ruling or determination letter confirming status. All domestic private foundations with assets of any amount at any time during 2016 must file Form 990-PF.
Do not rely on prior-year filing status alone. Changes in governance or charter may alter status mid-year. Verify the current status before preparing the return.
Accounting Records and Method
Collect books, journals, ledgers, and bank statements for the full 2016 tax year, whether a calendar year or the applicable fiscal year beginning in 2016. Identify the foundation’s accounting method (cash, accrual, or other) and indicate this election in the header of Form 990-PF.
The accounting method specified in the header is consistently applied throughout Part I, including column (d) for disbursements for charitable purposes, unless specific lines have different instructions. Document any method changes on an attached statement.
Revenue and Expenses
Complete Part I to list all revenue sources in rows 1 through 11 across columns (a) through (d). Row 2 includes a checkbox indicating whether the foundation is exempt from attaching Schedule B for certain revenue disclosures.
Part I, line 27, calculates three separate amounts. Line 27a shows an excess of revenue over expenses. Line 27b reports the net investment income used for the Section 4940 excise tax calculation. Line 27c shows the adjusted net income used for Section 4942’s distributable amount determination. Enter negative amounts as zero on lines 27b and 27c.
Balance Sheets and Net Assets
Complete Part II (Balance Sheets), reporting beginning and end-of-year book values in columns (a) and (b). Part VII-A, line 7, asks if the foundation had at least $5,000 in assets at any time in 2016. If yes, complete Part II, column (c), showing fair market values at year-end. If no, column (c) is not required.
Line 16 (total assets) and line 30 (total net assets or fund balances) must reconcile with the prior year’s Part II, line 30, and the current year’s Part III, line 6, respectively. Complete Part III to reconcile opening net assets on line 1, add revenue excess on line 2, and other increases on line 3. Subtract decreases on line 5, and confirm closing net assets on line 6, which match Part II, column (b), line 30. File all balance sheet schedules referenced in Part II.
Capital Gains and Losses
Complete Part IV to list each asset sale in rows 1a through 1e. For each sale, record the date acquired, the date sold, gross sales price, depreciation allowed, basis, and resulting gain or loss. For assets held on December 31, 1969, complete the separate columns (i) through (l) to separate pre-1970 appreciation from post-1969 gain or loss. These special basis rules were established by the Tax Reform Act of 1969 for private foundations.
Line 2 shows capital gain net income, and line 3 shows net short-term capital gain. Transfer these amounts to Part I, lines 7 and 8, respectively. Include schedules detailing each transaction as required by the form instructions.
Minimum Investment Return and Distributable Amount
All domestic foundations must complete Part X. Calculate the fair market value of noncharitable-use assets by averaging monthly securities values and cash balances throughout 2016 on lines 1a and 1b, adding the fair market value of other assets on line 1c, and reducing only for documented blockage or valuation factors on line 1e.
Subtract acquisition indebtedness on line 2. Deduct 1.5 percent of net assets as cash held for charitable activities on line 4. Calculate five percent of the resulting amount on line 6 as the minimum investment return. This line 6 is carried forward to Part XI, line 1.
Complete Part XI by subtracting Section 4940 excise tax from Part VI, line 5, and any income tax for 2016 from Part XI, line 2b, from the minimum investment return to derive the distributable amount on line 7. Section 4942(j)(3) and 4942(j)(5) private operating foundations do not complete Part XI.
Excise Tax Calculation
Calculate the foundation’s annual Section 4940 excise tax in Part VI. Most domestic foundations enter two percent of Part I, line 27b (net investment income) on line 1c. Domestic foundations satisfying the Section 4940(e) reduced-rate test completed in Part V enter one percent of line 27b on line 1b instead.
Exempt foreign organizations meeting the 85 percent test enter four percent of Part I, line 12, column (b). Section 4947(a)(1) nonexempt charitable trusts and taxable foundations add any tax under Section 511 on line 2 and subtract any Subtitle A income tax on line 4.
Report estimated tax payments, extension payments, and backup withholding in the appropriate lines. Calculate the final tax due or overpayment. Nonexempt charitable trusts under Section 4947(a)(1) and taxable foundations must report Subtitle A income tax on Part VI, line 4, which reduces their Section 4942 distributable amount. Exempt private foundations do not report this tax.
Activity Statements
Answer all yes or no questions in Part VII-A. Lines 1a through 1e address political expenditures, election activities, and Form 1120-POL filing. Line 2 asks about any new activities not previously reported. Line 3 covers governance changes, including amendments to articles, bylaws, or
governing instruments. Attach conformed copies if yes.
Part VII-A, line 4a, asks if the foundation filed Form 990-T. A foundation must file Form 990-T if it has gross income of $1,000 or more from an unrelated trade or business. Lines 5 and 6 confirm compliance with Section 508(e) and state law restrictions on mandatory directions.
Line 7 inquires whether assets exceeded $5,000 at any time during 2016. Suppose the answer is yes. Complete Part II, column (c), by providing the fair market values. Part XV (Grants and Contributions Paid) has specific requirements based on grants made and other factors described in the Part XV instructions.
Line 8 requests a listing of all states to which the foundation reports or is registered. Attach confirmation of Attorney General notification if required. Line 9 asks if claiming private operating foundation status. If yes, complete Part XIV. Lines 10 through 16 address substantial contributors, controlled entities under Section 512(b)(13), donor-advised fund transfers, foreign financial accounts, and tax-exempt interest received.
Qualifying Distributions
Complete Part XII to list all amounts paid to accomplish charitable purposes on line 1a, showing the total from Part I, column (d), line 26. Report program-related investments on line 1b. Show amounts set aside under the suitability test on line 3a (prior IRS approval is required) or the cash distribution test on line 3b (attach the required schedule).
Sum these amounts to derive qualifying distributions on line 4, which flows to Part XIII, line 4, and Part V, line 8. Qualifying distributions determine whether the foundation meets its minimum distribution requirement under Section 4942 of the Internal Revenue Code. Part XII, line 5, is completed only by foundations claiming the Section 4940(e) reduced tax rate.
Signature and Filing
An officer, director, or trustee must sign and date Form 990-PF under penalties of perjury in the signature block on page 3. If a paid preparer signs, obtain the preparer’s PTIN and Firm EIN.
Attach all required schedules and statements referenced in the form instructions. These include Schedule B if required, capital gains detail for Part IV, blockage reduction explanation for Part X line 1e, Part V Section 4940(e) calculation, Part XII set-aside schedules, Part XIII undistributed income elections, Part XIV if claiming private operating foundation status, Part XV for grants and contributions paid when applicable, Part XVI-A and XVI-B if unrelated business income exists, and Part XVII if applicable.
Form 990-PF for calendar year 2016 is due by May 15, 2017. To request an automatic six-month extension, file Form 8868 by the original due date. Refer to the IRS Where to File page for Form 990-PF (2016) for current mailing instructions.
Special Provisions
Disqualified persons, as defined in Section 4946, are restricted from engaging in self-dealing transactions reported in Part VII-B, lines 1a through 1c. Violations require Form 4720 filing and Section 4941 excise tax calculation outside this form. While Form 990-PF itself does not restrict nonresident employment, nonresident individuals, or nonresident aliens serving as foundation managers or officers may trigger additional scrutiny.
Step-by-Step Filing Process
Step 1:
Verify foundation status and filing requirements. Confirm the entity qualifies as a domestic private foundation under Section 501(c)(3) or Section 4947(a)(1) nonexempt charitable trust. Obtain an IRS ruling or determination letter. All domestic private foundations with any assets at any time during 2016 must file.
Step 2:
Gather accounting records and choose an accounting method. Collect books, journals, ledgers, and bank statements for the full 2016 tax year. Identify the accounting method and indicate it in the header. Apply this method consistently throughout Part I unless specific lines have different instructions. Document any technique changes.
Step 3:
Complete Part I revenue and expenses. List all revenue sources in rows 1 through 11 across columns (a) through (d). Check the box on row 2 if Schedule B is not required. Calculate the excess revenue over expenses on line 27a, the net investment income on line 27b, and the adjusted net income on line 27c. Enter negative amounts as zero on lines 27b and 27c.
Step 4:
Complete Parts II and III for balance sheets and net assets. Report beginning and end-of-year book values in columns (a) and (b). Answer Part VII-A, line 7, regarding the $5,000 asset threshold. If yes, complete Part II, column (c), fair market values. Reconcile Part II, lines 16 and 30, with the prior year and Part III. File all referenced balance sheet schedules.
Step 5:
Complete Part IV for capital gains and losses. List each asset sale with dates, sales price, depreciation, basis, and gain or loss. For assets held on December 31, 1969, complete columns (i) through (l) to separate pre-1970 and post-1969 amounts per the Tax Reform Act of 1969 rules. Transfer line 2 to Part I, line 7, and line 3 to Part I, line 8. Include transaction detail schedules.
Step 6:
Complete Parts X and XI to achieve a minimum investment return and a distributable amount. Calculate the fair market value of noncharitable-use assets using average monthly values for securities and cash, adding other assets, and reducing them for documented blockage factors. Subtract acquisition indebtedness and deduct 1.5 percent for cash held for charitable activities. Calculate a minimum investment return of five percent on line 6. In Part XI, subtract taxes to derive the distributable amount on line 7. Private operating foundations under Sections 4942(j)(3) and 4942(j)(5) do not complete Part XI.
Step 7:
Complete Part VI for excise tax. Calculate the Section 4940 excise tax at one percent for foundations meeting the Section 4940(e) test or two percent for others based on Part I, line 27b, net investment income. Exempt foreign organizations pay 4% of their total revenue. Section 4947(a)(1) trusts and taxable foundations add the Section 511 tax and subtract Subtitle A income tax. Report payments and calculate tax due or overpayment.
Step 8:
Complete Part VII-A activity statements. Answer all questions, including political activities, new activities, governance changes, Form 990-T filing requirement (if gross unrelated business income reaches $1,000 or more), Section 508(e) compliance, asset threshold triggering Part II column (c), state reporting, private operating foundation status, substantial contributors, controlled entities, and foreign accounts. Part XV requirements depend on specific grants and activities described in its instructions.
Step 9:
Complete Part XII for qualifying distributions. List amounts paid for charitable purposes from Part I, column (d), line 26, program-related investments, and amounts set aside under suitability or cash distribution tests with required schedules. The sum on line 4 is for total qualifying distributions. The remainder flows to Part XIII, line 4, and Part V, line 8. Line 5 applies only to Section 4940(e) reduced-rate foundations.
Step 10:
Sign, date, and file with all required attachments. Ensure that the officer, director, or trustee signs the document under penalty of perjury. Include paid preparer information if applicable. Attach Schedule B, capital gains details, blockage explanations, Part V calculations, Part XII set-aside schedules, Part XIII elections, Part XIV if an operating foundation exists, Part XV when applicable, Parts XVI-A and XVI-B if unrelated business income exists, and Part XVII if applicable. File by May 15, 2017, or request an extension on Form 8868. Consult the IRS “Where to File” page for the mailing address.
This checklist ensures the accurate completion of Form 990-PF for tax year 2016, maintaining compliance with excise tax calculations, distribution requirements, and tracking undistributed income under applicable tax laws.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
