Don't count your chickens yet

Don’t Count Your Chickens Yet!

A discussion that occurs at nearly every board meeting (not to mention audit, grants and finance/investment committee meetings) of a private foundation is whether the investments and grants for the year can be “managed” to reduce the excise tax on net investment income to 1 percent. Since the enactment of the Tax Reform Act of 1969, when the tax on net investment income was first introduced, the rate of tax has been 2 percent which could be reduced to 1 percent if the percentage of the current year’s charitable spending exceeded the average of the prior 5 years’ spending.Continue reading