Tax Warrior Chronicles

Rogue One: A Single Tax on Foundation Investment Income Story

Posted on Wed, Jan 22, 2020

By: Keisha Price, CPA, MST

 

A Long Time Ago in a Tax System Far, Far, Away…Private Foundations were subject to a 2% tax on net investment income generated from the Foundation’s charitable assets. This 2% tax could be reduced to 1% if the foundation’s current year charitable distributions exceeded its average charitable distributions over the prior five years…until now!

 

Makes Sense Right?

Well yes! It makes sense for a foundation with a clear charitable purpose, effective directorship, and meaningful assets to give more for the greater good of the galaxy each year and that deserves a tax break.

 

Constructing the Death Star

Let’s say the good and benevolent founder of the foundation

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