January 1, 2023

As foundations near their year‐end, it is time for them to consider how today’s financial actions affect year‐end tax strategies. Below are some of the items to consider before year‐end:

Required Distributions of Income

Private non-operating foundations must annually distribute 5% of the value of their average non-charitable use assets each year. Non-charitable use assets include all assets other than those used directly in carrying out the foundation’s exempt purpose. The foundation’s current year qualifying distributions are applied toward this 5% distributable amount, also referred to as the required minimum distribution or “RMD,” to determine whether the foundation will have any excess distributions carried forward to next year or whether the foundation will need to make it up by the end of the following tax year.

Click here to read the full year-end planning letter.

Click here to read the Washington State and Local Tax Addendum.

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