Notice 2015-62: Investments by private foundations

Notice 2015-62: Investments by private foundations

The IRS today released an advance version of Notice 2015-62 as guidance under Code section 4944 with respect to investments made by private foundations for purposes described in section 170(c)(2)(B), but that are not “program-related investments” as defined by section 4944(c) or the regulations.


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Notice 2015-62 [PDF 16 KB] addresses questions concerning whether certain investments made by a private foundation—that is, an investment that furthers its charitable purposes, but is not a “program-related investment” because a significant purpose of the investment is the production of income or the appreciation of property—are subject to the excise tax imposed under section 4944.

Notice 2015-62 explains that only a “jeopardizing investment” is subject to tax under section 4944, and that an investment made by a private foundation will not be considered to be a jeopardizing investment “…if in making the investment, the foundation managers exercise ordinary business care and prudence…in providing for the long-term and short-term financial needs of the foundation to carry out its charitable purposes.”


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