Discussion:Help----990PF Start-Up Period rules interpretation
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Discussion Forum Index --> Advanced Tax Questions --> Help----990PF Start-Up Period rules interpretation
Discussion Forum Index --> Tax Questions --> Help----990PF Start-Up Period rules interpretation
| 5 November 2009 | |
| I am working on a 990PF. A question has arised about a Start-up period and the start-up period minimal distribution requirements. My client seems to think that they can defer the required distributions until the end of the start-up period calculated on the 20% of first year, 40% of second year, ect. However, after reading the rules I am concerned that this is not the case because my interpretation of the rules says that the start-up period minimal distribution requirements only apply to assets that are "set-aside". If the assets are not set-aside, then the foundation is required to distribute the 5% of the distributable amount by the end of the preceding year.
Does anybody know whether I interpreted this correctly? Please help. | |
| 5 November 2009 | |
| Not sure if you saw my response a very similar question you asked several days ago, here:
Discussion:990PF-Start-up_period I agree with your interpretation that the start-up period minimum distribution only applies to set-asides. Under the regs I cited in my reply to your previous question, a set-aside that satisfies the cash-distribution test must appear as a dollar-amount entry in the organizations books as a pledge or future obligation. The start-up period minimum amount must be distributed by the end of the start-up period. There is no requirement that says that a particular amount needs to be paid during any particular year during the start-up period. | |
| 5 November 2009 | |
| I just did some research on this topic, you are right, defering the distribution until the end of the start-up period is only applied to Set-Aside that meets either of tests. | |
