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What are the federal tax laws regarding tipping from public charity to private foundation?

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What are the federal tax laws regarding tipping from public charity to private foundation?

I am trying to find out what the federal tax laws are regarding tipping--the maximum amount that a single foundation can give to a single organization without causing it to lose its public charity status and become a private foundation. I understand that it goes by percentage of income, but I don’t know that the percentage is.

There is no precise answer to the question. In general, a charity which is not a church, school or hospital, must obtain more than one-third of its income from a combination of gifts, grants and contributions and fees for related activities in order to qualify as a public charity and not a private foundation. There are limitations, however, on how much of a gift or fee received from any single organization will count in the numerator of the public support fraction. For a full explanation, see Ready Reference Page - Calculating Public Support Percentage - Part I & II.

Tuesday, September 1, 2009
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