Private Foundation Tax Law

Private foundation tax law governs how private foundations—primarily non-profit organizations funded by individuals, families, or corporations—must manage their finances and reporting. Foundations are subject to specific tax rules, including an excise tax on net investment income (usually 1-2%) and requirements to distribute a minimum percentage of their assets annually for charitable purposes. These laws promote transparency and restrict certain investments and activities to ensure that the foundation’s funds primarily serve charitable goals. Proper compliance ensures foundations maintain their tax-exempt status while fulfilling their philanthropic missions.