The excise tax imposed on a private foundation's investment income can be imposed as an initial (first-level) tax but cannot be imposed as an additional (second-level) tax.

Question

Quizplus · Accepted Answer

Private foundations are subject to an excise tax on their net investment income, which is considered a first-level tax. This tax is calculated on the foundation's investment income and requires the foundation to pay a percentage of the income they earn from investments to the government. However, an additional or second-level tax cannot be imposed on a private foundation's investment income.

The Excise Tax Imposed on a Private Foundation's Investment Income