Form 990-PF Completion Checklist for Tax Year 2010
Overview and Applicability
Form 990-PF is the annual information return for private foundations for the tax year 2010. This filing year predates major legislative changes, so no Economic Stimulus Payment reconciliation, Affordable Care Act provisions, Tax Cuts and Jobs Act rules, or American Rescue Plan Act expansions apply.
The 2010 form requires domestic private foundations to complete Parts X (Minimum Investment Return), XI (Distributable Amount), XII (Qualifying Distributions), and XIII (Undistributed Income). Section 4940(e) reduced excise tax relief remains available for foundations that meet the five-year distribution ratio thresholds, allowing a one percent rate instead of the standard two percent.
Foundation Classification and Setup
Complete header information with the foundation’s EIN, legal name, and address. Select the appropriate check boxes to indicate initial return, final return, or amended return status. Select the foundation type: Section 501(c)(3) exempt private foundation, Section 4947(a)(1) nonexempt charitable trust, or other taxable private foundation. Indicate the accounting method (cash or accrual) that applies consistently throughout the return unless specific parts have different requirements.
Income and Revenue Reporting
Gather all 2010 financial documentation, including contributions, gifts, grants, interest income statements, dividend statements, rental income records, and capital transaction records. If contributions came from multiple sources, attach a schedule to Part I, line 1. Check the box on Part I, line 2, only if Schedule B is not required.
Part I captures revenue and expenses using four columns. Column (a) reports amounts per book, column (b) shows net investment income, column (c) reports adjusted net income, and column (d) shows disbursements for charitable purposes following the foundation’s elected accounting method.
Report all income sources, including interest, dividends, rents, and capital gains. Deduct ordinary expenses such as officer compensation, legal fees, and accounting fees. Calculate adjusted net income on line 27c.
Balance Sheet Requirements
Complete Part II with beginning-of-year book values in column (a) and end-of-year book values in column (b) for all asset categories. Part VII-A, question 7, asks whether the foundation had at least $5,000 in assets at any time during the year. If yes, complete Part II, column (c), showing fair market values for all assets.
Calculate total assets on line 16 and verify beginning-of-year totals reconcile to the prior year’s ending balances. Report all liabilities and calculate net assets or fund balances on line 30.
Excise Tax Calculation
Domestic private foundations face a two percent excise tax on net investment income under Section 4940(a). Foundations meeting distribution requirements may qualify for a one percent rate under Section 4940(e). Complete Part I through line 27c to determine adjusted net income. Enter net investment income from Part I, line 27b, for excise tax calculation.
To qualify for the reduced rate, complete Part V showing the five-year base period (2005-2009 for tax year 2010). Enter adjusted qualifying distributions and net value of noncharitable-use assets for each year. Calculate the distribution ratio for each year and average the five ratios. If the average meets the required threshold, apply the one percent rate on Part VI, line 1b.
Exempt foreign organizations pay four percent of Part I, line 12, column (b), and generally do not complete Part X. Section 4947(a)(1) nonexempt charitable trusts report both Section 511 unrelated business income tax and Subtitle A income tax on Part VI, lines 2 and 4.
Minimum Investment Return
Part X determines minimum investment return by calculating the fair market value of assets not used directly for exempt purposes. Enter the average monthly fair market value of securities on line 1a, the average monthly cash balances on line 1b, and the fair market value of other assets on line 1c.
Subtract acquisition indebtedness on line 2 and cash deemed held for charitable activities (1.5 percent of line 3 or greater if justified) to arrive at the net value of noncharitable-use assets on line 5. Calculate line 6 by multiplying line 5 by five percent.
Distributable Amount
Part XI calculates the minimum amount the foundation must distribute for charitable purposes. Start with the minimum investment return from Part X, line 6 on Part XI, line 1. Subtract tax on investment income from Part VI, line 5, and other applicable income taxes to determine the distributable amount on Part XI, line 7.
This amount carries to Part XIII, line 1, as the minimum distribution requirement.
Qualifying Distributions
Part XII documents qualifying distributions, including charitable expenses from Part I, column (d), line 26, program-related investments from Part IX-B, line 3, and amounts set aside for charitable projects meeting IRS requirements. Sum all qualifying distributions on line 4.
If qualifying under Section 4940(e), enter one percent of Part I, line 27b on line 5. Subtract line 5 from line 4 for adjusted qualifying distributions on line 6, which is used for future Section 4940(e) calculations.
Undistributed Income Tracking
Part XIII tracks undistributed income across years. Enter distributable amount from Part XI, line 7 on Part XIII, line 1, column (d). Show 2009 undistributed income on line 2a, column (c), and prior years’ undistributed income on line 2b. List excess distribution carryover from 2005-2009 on lines 3a-3e.
Allocate 2010 qualifying distributions among 2009 undistributed income, prior years’ undistributed income if elected, corpus if elected, and 2010 distributable amount. Calculate the 2010 undistributed income to be distributed in 2011 on line 6f. Taxable undistributed income subject to Section 4942(a) taxes appears on lines 6d and 6e.
Statements and Disclosures
Answer all yes or no questions in Part VII-A, lines 1-16, covering political activities, unrelated business income, liquidation events, Section 508(e) compliance, state reporting, private operating foundation status, substantial contributors, controlled entities, insurance contracts, public inspection compliance, and foreign financial accounts.
Part VII-B addresses disqualified person transactions, excess business holdings, jeopardy investments, prohibited expenditures, personal benefit contracts, and tax shelter transactions. Affirmative answers may require Form 4720 filing. Attach detailed explanations unless exceptions apply.
Compensation Reporting
Part VIII, line 1, requires listing all officers, directors, trustees, and foundation managers, including their names, addresses, titles, average weekly hours, and 2010 compensation, which should include deferred compensation, earned compensation, benefit plan contributions, and expense allowances.
Line 2 lists the five highest-compensated employees (other than line 1 individuals) receiving $50,000 or more, with name, address, title, hours, and compensation details. Note the total count of other employees paid $50,000 or more.
Line 3 lists the five highest-compensated independent contractors for professional services receiving $50,000 or more, showing name, address, service type, and compensation. Indicate the total number of others receiving compensation for professional services.
Grants Reporting
Part XV reports grants and contributions paid during the year or approved for future payment. This part must be completed when any grants are made, regardless of asset size. For each grant, provide the recipient name and address, relationship to foundation managers or substantial contributors, grant purpose, and amount paid or approved.
Signature and Filing
The foundation officer or trustee must sign and date the return under penalties of perjury. If a paid preparer completes the return, include the preparer's signature, date, PTIN, and firm information.
Attach all required schedules: Schedule B if needed, Part IV depreciation schedules, Part V base-period detail for Section 4940(e), Part VIII compensation schedules, Part IX-B program-related investments, Part X supporting documentation, Part XII set-aside detail, Part XIII election statements, Part XIV operating foundation tests, Part XV grants list, and Part XVII noncharitable organization transactions.
Form 990-PF is due by the 15th day of the 5th month after the tax year ends (May 15, 2011, for calendar-year 2010 filers). Request a six-month extension using Form 8868. Consult the IRS "Where to File" page for the correct mailing address, based on your location and payment status.
Ten-Step Process
Step 1.
Gather all 2010 income documentation, including contributions, interest, dividends, rental income, and capital transaction records.
Step 2.
Complete the header with EIN, name, address, return type, foundation classification, and accounting method.
Step 3.
Prepare Part II balance sheet with book values and fair market values if Part VII-A, question 7, is answered 'yes.'
Step 4.
Complete Part I through line 27c to calculate adjusted net income, ensuring column (d) follows the elected accounting method.
Step 5.
Determine excise tax by completing Part VI. Complete Part V if qualifying for Section 4940(e) one percent rate using the 2005-2009 base period.
Step 6.
Calculate the minimum investment return in Part X using average monthly asset values minus acquisition indebtedness and deemed charitable cash, then multiply by five percent.
Step 7.
Determine the distributable amount in Part XI by subtracting taxes from the minimum investment return.
Step 8.
Document qualifying distributions in Part XII, including charitable expenses, program-related investments, and set-asides.
Step 9.
Track undistributed income in Part XIII, allocating current-year distributions and calculating amounts requiring future distribution.
Step 10.
Complete Part VII-A and VII-B statements, Part VIII compensation reporting for individuals and contractors receiving $50,000 or more, and Part XV grants list. Attach all schedules, obtain the required signatures, and file by the 15th day of the 5th month following the end of the year.
This checklist ensures the accurate completion of Form 990-PF for tax year 2010, helping private foundations meet filing requirements and maintain compliance with 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.
