Form 990-PF Filing Checklist for Tax Year 2011
Overview and Applicability
Form 990-PF is the annual information return for private foundations and Section 4947(a)(1) nonexempt charitable trusts for tax year 2011. This filing year contains no stimulus reconciliation, Affordable Care Act shared responsibility provisions, Tax Cuts and Jobs Act rules, American Rescue Plan Act expansions, unemployment exclusion relief, or energy credit modifications.
The 2011 instructions apply Section 4940 excise tax rules with either a one percent or two percent rate, depending on whether the Section 4940(e) qualification is met. Section 4942 minimum distribution requirements and Section 4943 excess business holding limitations remain unchanged from prior years. Part V (Qualification Under Section 4940(e)) and Part XI (Distributable Amount) are central to tax computation and distribution compliance for calendar year 2011.
Key Form-Specific Rules
Two critical rules govern the 2011 Form 990-PF filing. First, the one percent tax rate from Section 4940(e) only applies if the foundation has a five-year average distribution ratio of adjusted qualifying distributions to net value of noncharitable-use assets that is equal to or higher than the average distribution ratio from 2006 to 2010 and did not have any Section 4942 tax liability during that time. If not, the standard two percent rate will be used on Part VI. Otherwise, the default two percent rate applies on Part VI, line 1c.
Second, all domestic foundations must complete Part X (Minimum Investment Return), calculate the five percent minimum investment return, and report the distributable amount on Part XI, line 7, before entering qualifying distributions on Part XII, line 4, and analyzing undistributed income carryover on Part XIII. This requirement does not apply to Section 4942(j)(3) or (j)(5) private operating foundations.
Initial Documentation and Foundation Status
Gather the foundation’s governing instrument, including articles of incorporation, bylaws, or trust agreement. Collect any IRS determination letter and Section 4940(e) ruling letters. Obtain board minutes for 2011 and documentation of officers, directors, and trustee identities and compensation. Verify the foundation’s status under Section 501(c)(3) as an exempt private foundation, Section 4947(a)(1) nonexempt charitable trust, or other taxable private foundation status by reviewing prior correspondence with the IRS.
Form 990-PF is available only to entities treated as private foundations under Section 509(a) or Section 4947(a)(1) nonexempt charitable trusts. Public charities classified under Section 509(a)(1), (2), or (3) must file Form 990 or 990-N instead. Filing Form 990-PF as a public charity would be an error even if the organization holds investment assets.
Accounting Method and Asset Valuation
Select the appropriate accounting method (cash, accrual, or other) for Part I, column (a). The same accounting method applies consistently throughout Part I, including column (d) for disbursements for charitable purposes, unless specific lines have different instructions. Fair market value assets must be reported in Part II, column (c), and Part X must use the average monthly fair market value for securities and average monthly cash balances per the 2011 instructions.
Revenue, Expenses, and Balance Sheet
Complete Part I to record all revenue and expenses for 2011. Report contributions on Part I, line 1, and include a required Schedule B if the contributions exceed the specified threshold, as instructed. Enter investment income, including interest, dividends, and capital gains, on lines 3 through 8. Reconcile Part I, column (a) totals with books and records to ensure accuracy.
Complete Part II (Balance Sheets) for both the beginning and end of 2011. Enter book values in columns (a) and (b). Part VII-A, line 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), with fair market value entries for end-of-year assets. This $5,000 threshold determines whether fair market value reporting is required in Part II, column (c), not whether other parts must be completed.
Capital Gains and Losses
Part IV requires detailed reporting for each asset sale during 2011. Report the property description, acquisition method (purchase or donation), dates acquired and sold, gross sales price, depreciation allowed, cost basis, and gain or loss. For assets owned on December 31, 1969, complete columns (i) through (l) to separate long-term capital gains attributable to appreciation after 1969 from pre-1970 appreciation.
Enter the net capital gain on Part I, line 7, and the net short-term gain on Part I, line 8, column (c).
Excise Tax Calculation
Compute net investment income on Part I, line 27b, which excludes rental and unrelated business income under Section 512. Determine whether the foundation qualifies for the Section 4940(e) reduced tax rate by completing Part V using the five-year base period 2006 through 2010. If qualified and no Section 4942 tax liability occurred in the base period, enter one percent of line 27b on Part VI, line 1b. Otherwise, enter 2% on line 1c.
Include tax under Section 511 if applicable to Section 4947(a)(1) trusts or taxable foundations on line 2. Report income tax on line 4. Subtract line 4 from line 3 to obtain the net tax based on investment income on line 5.
Minimum Investment Return
Calculate the fair market value of noncharitable-use assets in Part X by summing the average monthly fair market value of securities on line 1a, the average monthly cash balance on line 1b, and the fair market value of other noncharitable assets on line 1c. Subtract acquisition indebtedness on line 2 and deduct 1.5 percent of the net as cash deemed held for charitable activities on line 4.
Enter the resulting net value of noncharitable-use assets on line 5 and multiply by five percent to obtain the minimum investment return on line 6. This figure is entered in Part XI, line 1.
Distributable Amount and Qualifying Distributions
On Part XI, line 1, enter the minimum investment return from Part X, line 6. Subtract the Section 4940 excise tax from Part VI, line 5, and any other income tax for 2011 on line 2c to obtain the distributable amount before adjustments on line 3. This represents the minimum amount the foundation must distribute for charitable purposes.
On Part XII, report qualifying distributions, including charitable expenses, program-related investments, and amounts set aside under Section 4942(h). Compute adjusted qualifying distributions on line 6 for future Section 4940(e) calculations. Qualifying distributions must meet or exceed the distributable amount to avoid penalty taxes under Section 4942.
Undistributed Income Analysis
Part XIII analyzes the 2011 distributable amount and any carryover of undistributed income from prior years. Identify excess distributions from 2006 through 2010 that may be applied to reduce the 2011 distributable amount.
Report the final undistributed income for 2011 on line 6f, which must be distributed by the end of 2012. Failure to distribute required amounts subjects the foundation to excise taxes under Section 4942(a).
Activity and Compliance Statements
Answer all questions in Part VII-A regarding political activity (lines 1a through 1c), new activities and governance changes (lines 2 through 3), unrelated business income filing (lines 4a through 4b), liquidation or substantial contraction (line 5), Section 508(e) compliance (line 6), asset threshold (line 7), state reporting compliance (line 8b), private operating foundation status (line 9), substantial contributors (line 10), controlled entities (line 11), donor-advised fund distributions (line 12), public inspection compliance (line 13), and foreign financial accounts (line 16).
In Part VII-B, identify any transactions with disqualified persons (line 1a), excess business holdings (line 3), jeopardized investments (line 4), and taxable expenditures (line 5) that may trigger the filing requirements for Form 4720 excise tax. Attach Form 4720 if any "yes" answer applies, unless an exception under regulations or disaster relief guidance applies.
Compensation and Related Disclosures
Complete Part VIII with detailed compensation information. List all officers, directors, trustees, and foundation managers on line 1 with name, address, title, average hours per week, compensation (including deferred compensation), contributions to employee benefit plans, and expense account allowances.
On line 2, list the five highest-compensated employees apart from those on line 1 who received compensation of $50,000 or more during the year. Include name, address, title, average hours worked, and complete compensation details. Note the total number of other employees who received compensation of $50,000 or more.
On line 3, list the five highest-compensated independent contractors for professional services who received compensation of $50,000 or more during the year. Provide name, address, type of service, and compensation amount. Indicate the total number of others receiving compensation of $50,000 or more for professional services.
Supporting Schedules and Additional Parts
Attach schedules to Part I for contributions, gross profit, and other income. Summarize the largest direct charitable activities on Part IX-A and program-related investments on Part IX-B.
Complete Part XV when the foundation has made grants or contributions or has certain other activities to report. This requirement is independent of the $5,000 asset threshold in Part VII-A, line 7. Part XV requires information on managers who meet contribution thresholds, grant application procedures, and detailed grant and contribution listings on line 3.
Complete Part XVI-A (income-producing activities) and Part XVI-B (relationship to exempt purposes) if the foundation has related or unrelated business income. Complete Part XVII if the foundation made transfers to or engaged in transactions with noncharitable exempt organizations under Sections 501(c)(4) through (19) or Section 527 political organizations.
Signature and Filing Requirements
The form must be signed and dated by an officer or trustee, under penalty of perjury, in the signature section. Attach a statement of any accountant’s certification if applicable. Include all schedules referenced in Part I through Part XVII and all exhibits required by specific line items.
Required schedules include contributions, gifts, and grants for Part I, line 1, disqualified-person receivables for Part II, line 6, capital gains with depreciation and basis detail for Part IV, amounts set aside under the Section 4942(h) cash distribution test for Part XII, line 3b, and grant and contribution detail for Part XV, line 3. Ensure fair market value figures in Part II, column (c), and Part X are consistent and supported by qualified appraisals where required.
Form 990-PF for 2011 is due by the 15th day of the 5th month following the end of the tax year. For calendar year 2011, the return is due by May 15, 2012. An automatic six-month extension is available if you file Form 8868 by the original due date. For 2011, the IRS had fully transitioned
to the single-form automatic extension process using Form 8868.
Consult the IRS Where to File page for Form 990-PF 2011 to determine the correct mailing address based on the foundation’s location. Private delivery services designated by the IRS also meet the timely filing requirements when used in accordance with IRS guidelines.
Ten-Step Filing Process
Step 1.
Gather initial documentation, including governing instruments, IRS determination letters, Section 4940(e) ruling letters, board minutes, and officer and trustee information. Verify foundation status as an exempt private foundation, a Section 4947(a)(1) nonexempt charitable trust, or other taxable private foundation.
Step 2.
Determine the accounting method for Part I and apply it consistently throughout the return, including column (d). Identify fair market value requirements for Part II, column (c), based on the Part VII-A, line 7 response. Prepare to use average monthly fair market values in Part X calculations.
Step 3.
Complete Parts I and II with all revenue, expenses, and balance sheet information. Record contributions on Part I, line 1, with Schedule B if required. Enter investment income on lines 3 through 8. Reconcile column (a) totals with books and records. Complete balance sheets with book values and fair market values if the $5,000 asset threshold is met.
Step 4.
Prepare Part IV for all capital gains and losses during 2011. Report property description, acquisition method, dates, gross sales price, depreciation, cost basis, and gain or loss. For assets owned on December 31, 1969, complete columns (i) through (l) to separate post-1969 appreciation from pre-1970 appreciation.
Step 5.
Calculate excise tax on investment income in Part VI. Compute net investment income on Part I, line 27b. Determine Section 4940(e) qualification by completing Part V using the base period 2006 through 2010. Enter one percent on line 1b if qualified or two percent on line 1c if not qualified. Include Section 511 tax and income tax as applicable.
Step 6.
Complete Part X to calculate the minimum investment return for domestic foundations. Sum the average monthly fair market value of securities, average monthly cash balances, and fair market value of other noncharitable assets. Subtract acquisition indebtedness and 1.5 percent cash deemed held for charitable activities. Multiply net value by five percent for minimum investment return on line 6.
Step 7.
Complete Parts XI through XIII for the distributable amount and undistributed income analysis. Enter the minimum investment return from Part X, line 6, on Part XI, line 1. Subtract the Section 4940 excise tax and other income taxes to obtain the distributable amount. Report qualifying distributions in Part XII, including charitable expenses, program-related investments, and set-asides. Analyze undistributed income carryover in Part XIII, identifying excess distributions from 2006 through 2010 and calculating 2011 undistributed income requiring distribution by the end of 2012.
Step 8.
Complete Parts VII-A and VII-B with all activity and compliance statements. Answer questions regarding political activities, new activities, governance changes, unrelated business income, liquidation, Section 508(e) compliance, asset thresholds, state reporting, private operating foundation status, substantial contributors, controlled entities, donor-advised funds, public inspection, and foreign accounts. Identify disqualified person transactions, excess business holdings, jeopardized investments, and taxable expenditures. Attach Form 4720 if required.
Step 9.
Prepare supporting schedules and complete Parts VIII through XVII. List all officers, directors, trustees, and foundation managers with compensation details in Part VIII. Report the five highest-compensated employees receiving $50,000 or more and the five highest-compensated independent contractors receiving $50,000 or more. Summarize charitable activities in Part IX-A and program-related investments in Part IX-B. Complete Part XV for grants and contributions made during the year. Complete Parts XVI and XVII if applicable.
Step 10.
Sign, date, and assemble the return with all required attachments. Have an officer or trustee sign under penalties of perjury. Include an accountant certification if applicable. Attach all schedules for contributions, capital gains, set-asides, grants, and other required items. Verify fair market value consistency between Part II and Part X. File by the 15th day of the 5th month after year-end, or request an automatic six-month extension on Form 8868.
This checklist ensures accurate completion of Form 990-PF for tax year 2011, complying with filing requirements and properly calculating excise taxes, minimum distributions, and undistributed income carryovers.
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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.
