Calculating the Minimum Distribution Requirement

A Guide for Private Foundation Distribution Rules

Private non-operating foundations are required by IRS regulations to make a minimum distribution each year for charitable purposes: roughly 5% of its assets, with certain adjustments, based on the previous year’s assets. (There is no minimum distribution requirement in the founding year.)

Calculating this minimum distribution is complex and includes many components of the foundation’s operations, such as grants, certain administrative expenses, grants repaid or returned to the foundation, cash reserves, tax liability, etc.

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