The IRS provides detailed resources pertaining to the life cycle of private foundations including instructions for the transfer of their assets and voluntary dissolution under Section 507 of the Internal Revenue Code.
For private foundations looking to transfer their assets to a donor-advised fund at the DuPage Foundation, the most common method is a simple distribution of its net assets to us.
Prior to the distribution, all estimated foundation expenses (e.g., invoices, accounting and other administrative fees, etc.) should be paid.
Following the transfer of assets, the private foundation must file a final Form 990-PF, Return of Private Foundation and related state filings for the short tax year in which the private foundation is fully liquidated, dissolved or terminated.
When completing the Return, check the Final Return box in the header on page one of the return; answer yes to the question of whether the private foundation had a liquidation, termination, or dissolution; and provide the information set forth in General Instruction T of the Form 990-PF instructions. This information includes the following:
- A statement attached to the return explaining the termination;
- A certified copy of any liquidation plan, resolution, etc., and all amendments or supplements that were not previously filed;
- A list of the names and addresses of all recipients of assets; and
- An explanation of the nature and fair market value of assets distributed to each recipient.
Prior to the transfer, also consider the special rules that apply to termination of private foundation status and fulfill any additional state requirements.
For further details regarding this process, please see the links below or contact Michael R. Sitrick, JD, Foundation vice president for advancement, via e-mail or at 630.598.5285 with questions.
The content provided above and throughout this website is for informational purposes only and should not be construed as or relied upon as legal or tax advice. The DuPage Foundation does not provide legal or tax advice and recommends that you consult with your tax attorney and other members of your professional advisor team before proceeding with a liquidation, dissolution or termination of a private foundation or any other charitable gift.