PFS2307. Transactions with Disqualified Persons: Allowable Financial Transactions and Reasonable Contemporaneous Documentation

One of the driving forces behind separating private foundations from public charities was Congress's desire to prohibit financial transactions between private foundations and disqualified persons. There are exceptions to the prohibitions whether it be stock redemptions or payment of reasonable compensation for professional services. This session will discuss the exceptions as well as the importance of documenting the due diligence steps taken by those charged with governance and their reliance on independent opinions of reasonableness for any fair value assessments. This session will also discuss the impact of Announcement 2021-18 which revoked Announcement 2001-33 related to compensation reporting by private foundations.

Learning Objectives:

• Distinguish who is a disqualified person
• Indicate what is an allowable transaction
• Recognize what constitutes self-dealing, and how to properly correct and report