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GiftLaw Pro Home   >  Chapter 7 - Charitable Organizations  >  7.2 Private Foundations  >  7.2.9 Private Operating Foundations  >  Basic Quiz

Basic Quiz - 7.2.9 Private Operating Foundations

1. A private operating foundation (POF) is a type of private foundation granted tax-exempt status under Sec. 501(c)(3).
           
2. A POF is unlike a traditional private foundation in that a POF carries on activities in furtherance of its charitable purpose.
           
3. Art museums are classic examples of a POF.
           
4. Since a POF is a type of private foundation, the POF is subject to the 5% minimum charitable distribution requirement.
           
5. Donor's whom contribute to POFs are only able to claim a deduction for their cost basis in the contributed property.
           
6. Ladee Lucke is a wealthy landowner in Nevada. Ms. Lucke has made an annual contribution to a private foundation in the Clark County area every year for the last 10 years. This year, Ms. Lucke has decided to make her contribution to a private operating foundation, a local art museum. Ms. Lucke has settled on contributing $10,000. Ms. Lucke's cash contribution is deductible up to 50% of her adjusted gross income in the year of contribution.
           
7. In order to qualify as a POF, a foundation must meet an "income test."
           
8. The "income" test is the only test that a charity must meet to be classified as a POF.
           
9. The endowment test requires a charity to spend more than 3/4 on activities in furtherance of its exempt purpose.
           
10. If a POF fails to qualify as a POF in any given year, POF status will be withdrawn for the life of the foundation.