A private foundation can be subject to an excise tax on:
A) Making jeopardizing investments.
B) Engaging in self-dealing.
C) Both a. and b.
D) Neither a. nor b.

Question

Quizplus · Accepted Answer

A private foundation can be subject to an excise tax on making jeopardizing investments or engaging in self-dealing. Jeopardizing investments refer to investments that threaten a foundation's ability to carry out its charitable purposes. Self-dealing happens when a foundation enters into a transaction with a disqualified person, such as a foundation manager, a substantial contributor, or their family members, which results in private benefit.

A Private Foundation Can Be Subject to an Excise Tax