Home      Login

Abstract: 

Set-Aside Basics Section 4942 of the Internal Revenue Code imposes a penalty excise tax on any private foundation that fails to make qualifying distributions in at least a minimum amount (i.e., 5% of net investment assets) each year. Generally, any amount distributed to accomplish a charitable purpose will be a qualifying distribution for this purpose. However, under a special rule in IRC §4942(g)(2), amounts that are not actually distributed but instead are set aside for a specific charitable project came be counted as clarifying distributions for the year of the set-aside, even though actual payment doesn’t occur until later.

Keywords: 

Affiliations:  .