Private Foundation Income and Tax Reporting on 990-PF (2015)

Overview and Applicability
Form 990-PF is the annual return for private foundations and Section 4947(a)(1) trusts for tax
year 2015. No stimulus reconciliation, ACA provisions, TCJA rules, ARPA expansions, or
notable tax credits apply. The form focuses on the Section 4940 excise tax on net investment
income, Section 4942 distributable amount requirements, and transactions involving disqualified
persons. It prohibits income tax credits and standard deductions.

Foundation Status and Filing Requirements
Confirm the organization qualifies as a domestic or foreign private foundation or Section
4947(a)(1) trust under Section 508(e). Enter the legal name, employer identification number,
and mailing address. All domestic non-operating private foundations must complete Part X
(Minimum Investment Return) and Part XI (Distributable Amount) regardless of asset size.

Part VII-A, line 7, asks if the foundation had at least $5,000 in assets at any time in 2015. If yes,
complete Part II, column (c), with fair market values. This threshold determines whether fair
market value reporting is required in Part II, column (c), not whether other parts of the form must
be completed.

Income Documentation and Fair Market Values
Collect all records of contributions, gifts, grants, investment income, unrelated business income,
and other receipts. Obtain Forms 1099, Schedule K-1, appraisals for donated assets, and
documentation of asset sales, including purchase date, cost basis, and sale price.

Determine fair market values for all assets as of year-end if the $5,000 threshold is met. Use
closing market quotes for securities, appraisals for real estate, and appropriate methods for
other assets. Substantiate all values with documentation.

Revenue and Expense Analysis
Complete Part I with four columns. Column (a) reports revenue and expenses per book using
the foundation’s elected accounting method. Column (b) shows net investment income. Column
© reports adjusted net income. Column (d) displays disbursements for charitable purposes,
using the same accounting method specified in the header.

Column (b) includes interest, dividends, rents, capital gains, and income modifications. Column
© excludes capital gains and losses. Totals in columns (b), (c), and (d) may not equal column
(a). Line 7 requires capital gain net income from Part IV, line 2. Line 8 requires net short-term
capital gain from Part IV, line 3.

Capital Gains and Losses
Complete Part IV for each asset sold during 2015. Provide the asset's description, acquisition
method, relevant dates, sales price, depreciation amount, cost basis, and the resulting gain or
loss. For assets owned on December 31, 1969, complete special columns to separate pre-1970
and post-1969 appreciation. Carry net capital gain to Part I, line 7, columns (b) and ©. Carry net
short-term capital gain to Part I, line 8, column (c) only.

Excise Tax Calculation
Complete Part VI to calculate excise tax. The Section 4940(e) reduced rate of one percent
applies if the foundation meets the qualifying distribution test for the five-year base period
ending in 2014 and had no Section 4942 tax liability. Otherwise, domestic foundations pay 2% of
their net investment income. Exempt foreign organizations pay four percent of their total
revenue.

Enter the Section 511 tax on line 2 if the foundation has unrelated business taxable income. Any
private foundation, including Section 501(c)(3) exempt foundations, Section 4947(a)(1) trusts,
and taxable foundations with unrelated business income, must report this tax. Enter subtitle A
income tax on line 4 for applicable foundations. Calculate tax based on investment income on
line 5.

Report payments and calculate taxes due or overpaid in the Tax Computation section below
Part VI. Include estimated tax payments, prior year overpayment credited to 2015, Form 8868
extension payments, and backup withholding.

Activity and Compliance Statements
Answer all Part VII-A questions, including political activity, new activities, governing instrument
changes, unrelated business income, liquidation, Section 508(e) compliance, asset threshold,
state reporting, private operating foundation status, substantial contributors, controlled entities,
donor-advised funds, public inspection, books custodian, tax-exempt interest, and foreign
accounts.

Part VII-A, lines 4a and 4b address unrelated business income. File Form 990-T if gross income
from unrelated business reaches $1,000 or more. Answer all Part VII-B questions regarding
disqualified person transactions, distribution failures, excess business holdings, jeopardy

investments, taxable expenditures, personal benefit contracts, and tax shelter transactions. File
Form 4720 if any yes answer applies and no exception exists.

Minimum Investment Return and Distributable Amount
Complete Part X for all domestic non-operating foundations. Calculate the average monthly fair
market value of securities, the average monthly cash balances, and the fair market value of
other noncharitable-use assets. Subtract acquisition indebtedness. Deduct 1.5 percent for cash
deemed held for charitable activities. Calculate five percent of the net value for the minimum
investment return on Line 6.

Complete Part XI for non-operating foundations. Start with the minimum investment return from
Part X, line 6. Subtract taxes to determine the distributable amount before adjustments. Add
recoveries and apply permitted deductions. The final distributable amount listed on line 7 is
carried over to Part XIII, line 1.

Qualifying Distributions and Undistributed Income
Complete Part XII to report qualifying distributions, including amounts paid for charitable
purposes, program-related investments, and amounts set aside for specific projects under
Section 4942(h). Total qualifying distributions on line 4 enter on Part V, line 8.

Complete Part XIII to track undistributed income by year. Apply 2015 qualifying distributions to
prior year undistributed income, corpus, and current year distributable amount in proper order.

Calculate the remaining undistributed income requiring future distribution.

Compensation and Program Reporting
List all officers, directors, trustees, and foundation managers in Part VIII with name, address,
title, hours, compensation, benefit plan contributions, and expense allowances. Report the five
highest-compensated employees receiving $50,000 or more and the five highest-compensated
independent contractors receiving $50,000 or more.

Summarize the largest direct charitable activities in Part IX-A. Report program-related
investments in Part IX-B. These sections demonstrate how the foundation accomplishes exempt
purposes.

Signature and Filing
An authorized officer or trustee must sign and date the return under penalties of perjury. If a paid
preparer completed the form, include the preparer's signature, date, PTIN, firm name, address,

and phone number. Include the employer identification number on all pages. Attach all required
schedules and verify consistency between Part II, column (c), and Part X fair market values.

Form 990-PF for calendar year 2015 is due by May 16, 2016. To request an automatic
six-month extension, file Form 8868 by the original due date. Consult the IRS "Where to File"
page to determine the correct mailing address.

Step-by-Step Filing Process

1. Step 1: Verify the foundation's status and answer Part VII-A, line 7, regarding the $5,000 asset

   threshold for Part II, column (C), and the fair market value requirements.

2. Step 2: Gather income documentation, including Forms 1099, Schedule K-1, appraisals, and

   records of asset sales.

3. Step 3: Determine fair market values for Part II, column (c), if required, using market quotes,

   appraisals, and appropriate methods.

4. Step 4: Complete Part I with proper column allocation following the elected accounting method

   for all columns, including column (d).

5. Step 5: Complete Part IV for capital gains with special treatment for assets held on December

   31, 1969. Carry amounts to Part I.

6. Step 6: Calculate excise tax in Part VI based on Section 4940(e) qualification. Add Section 511

   tax for any foundation with unrelated business income—complete the Tax Computation section
   for payments and balance.

7. Step 7: Answer all Part VII-A and Part VII-B questions. File Form 990-T if unrelated business

   income reaches $1,000 or more. File Form 4720, if required.

8. Step 8: Complete Part X minimum investment return, Part XI distributable amount, Part XII

   qualifying distributions, and Part XIII undistributed income tracking.

9. Step 9: Complete Part VIII compensation reporting and Part IX charitable activities and

   program-related investments.

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10. Step 10: Sign, attach schedules, verify consistency, and file by May 16, 2016, or request an

    extension.

    This checklist ensures the accurate completion of Form 990-PF for tax year 2015, maintaining
    compliance with excise tax calculations, distribution requirements, and tracking of undistributed
    income under applicable tax laws.

    If you’re missing tax documents or want to ensure the numbers you enter match IRS records,
    we can help.