Source: http://thinkandcode.info/Private-Foundations-p10795/
Timestamp: 2019-04-23 22:45:49+00:00

Document:
Tax Management Portfolio, Private Foundations — Excess Business Holdings, No. 473, explains the application and operation of §4943 of the Internal Revenue Code, which imposes an excise tax on the excess business holdings of private foundations and certain supporting organizations.
Tax Management Portfolio, Private Foundations — Excess Business Holdings, No. 473, explains the application and operation of §4943 of the Internal Revenue Code, which imposes an excise tax on the excess business holdings of private foundations and certain supporting organizations. The portfolio discusses the special rules for the required divestiture of a private foundation's excess business holdings held on May 26, 1969, the effective date of §4943. These rules permit a private foundation a phased divestiture period of up to 20 years to dispose of its pre-May 27, 1969, excess business holdings until they have been reduced to the permitted level.
The portfolio also explains the exception to the excess business holdings rules for functionally related businesses, as well as the complex rules governing the acquisition of excess business holdings after May 26, 1969. There is a discussion of how the holdings of disqualified persons with respect to the private foundation can have an effect on the calculation of the private foundation's own holdings. Finally, there is a discussion of how the 10% initial tax (as increased from 5% by the Pension Protection Act of 2006) and 200% additional tax are calculated and imposed and the administrative and judicial remedies available to the foundation. The discussions are illustrated by comprehensive examples throughout the portfolio. It is important to note that the Pension Protection Act of 2006, P.L. 109-280, made substantive changes to §4943. In addition, certain provisions of the Tax Relief and Health Care Act of 2006, P.L. 109-432, indirectly affect some of the regulations associated with §4943. This Portfolio reflects changes to §4943 and its accompanying regulations made by the Pension Protection Act of 2006 and the Tax Relief and Health Care Act of 2006. To date, in most instances new regulations to §4943 have not yet been promulgated to reflect the provisions of this legislation.
The Worksheets contain, inter alia, the legislative history of §4943, which was added to the Code by §101(b) of the Tax Reform Act of 1969.
This portfolio may be cited as Horwood and Wiktor, 473 T.M., Private Foundations — Excess Business Holdings.
Mr. Horwood is with the law firm of Horwood Marcus & Berk Chtd. He has written extensively in legal journals and other trade publications, and has lectured throughout the United States on various business, estate, and tax-related issues. Mr. Horwood is a Fellow of the American College of Trust and Estate Counsel (ACTEC) and is associated with numerous professional organizations, including the advisory boards of Tax Management, The Journal of Taxation of Investments, The Art Institute of Chicago, The Field Museum, and the Chicago Estate Planning Council. He is a graduate of Colgate University and the University of Pennsylvania Law School. He also holds an M.B.A. in Financial Management from American University and an LL.M. in Taxation from George Washington University. Mr. Horwood was formerly with the National Office of the Internal Revenue Service in Washington, D.C.
Mr. Wiktor is with the law firm of Horwood Marcus & Berk Chtd. and concentrates on all facets of wealth and charitable planning. His practice involves estate planning, including taxation, trust and estate administration, asset protection, business succession planning and charitable gift giving techniques. John has also represented individuals and charitable organizations as beneficiaries in will and trust disputes, individual and corporate fiduciaries in will and trust construction matters and individuals in contested guardianship proceedings. He has given numerous lectures on several wealth planning techniques and charitable gift agreements. John received his J.D. with honors, from the Loyola University Chicago, School of Law, and his B.A. in History from the University of Michigan.
Christopher G. Stoneman, B.A. (Law) Cambridge University (1949); LL.B., University of Virginia (1957); M.A., New York University (1989); member, American Bar Association, New York and Vermont Bars; former Fellow, American College of Trusts and Estates Counsel; author of several other Portfolios in the estate planning field.
C. Holdings in a "Business Enterprise"
D. Quantum of "Business Holdings"
2. Holdings Acquired Under Pre-May 27, 1969, Trusts, Wills, Etc.
4. Holdings Acquired Under Post-May 26, 1969, Trusts, Etc.
c. Meaning of "Correction Period"
c. Meaning of "Taxable Event"
d. Meaning of "Correction Period"

References: §4943
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 §101