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.
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.”
For more information, contact:
D. Greg Goller | +1 (703) 286-8391 | email@example.com
© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.