Treasury Regulations (26 C.F.R.)
26 CFR § 53.4944-4
Special rules.
# (a) Joint and several liability.
In any case where more than one foundation manager is liable for the tax imposed under section 4944 (a)(2) or (b)(2) with respect to any one jeopardizing investment, all such foundation managers shall be jointly and severally liable for the tax imposed under each such paragraph with respect to such investment.
# (b) Limits on liability for management.
With respect to anyone jeopardizing investment, the maximum aggregate amount of tax collectible under section 4944(a)(2) from all foundation managers shall not exceed $5,000, and the maximum aggregate amount of tax collectible under section 4944(b)(2) from all foundation managers shall not exceed $10,000.
# (c) Examples.
The provisions of this section may be illustrated by the following examples:
Example 1.
A, B, and C are foundation managers of X, a private foundation. Assume that A, B, and C are liable for both initial and additional taxes under sections 4944(a)(2) and 4944(b)(2), respectively, for the following investments by X: an investment of $5,000 in the common stock of corporation M, and an investment of $10,000 in the common stock of corporation N. A, B, and C will be jointly and severally liable for the following initial taxes under section 4944(a)(2): a tax of $250 (i.e., 5 percent of $5,000) for each year (or part thereof) in the taxable period (as defined in section 4944(e)(1)) for the investment in M, and a tax of $500 (i.e., 5 percent of $10,000) for each year (or part thereof) in the taxable period for the investment in N. Further, A, B, and C will be jointly and severally liable for the following additional taxes under section 4944(b)(2): a tax of $250 (i.e., 5 percent of $5,000) for the investment in M, and a tax of $500 (i.e., 5 percent of $10,000) for the investment in N.
Example 2.
Assume the facts as stated in Example (1), except that X has invested $500,000 in the common stock of M, and $1 million in the common stock of N. A, B, and C will be jointly and severally liable for the following initial taxes under section 4944(a)(2): a tax of $5,000 for the investment in M, and a tax of $5,000 for the investment in N. Further, A, B, and C will be jointly and severally liable for the following additional taxes under section 4944(b) (2): a tax of $10,000 for the investment in M, and a tax of $10,000 for the investment in N.
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In this part (40 sections)
- 53.4942(a)-1 · (a)-1 Taxes for failure to distribute income.
- 53.4942(a)-2 · (a)-2 Computation of undistributed income.
- 53.4942(a)-3 · (a)-3 Qualifying distributions defined.
- 53.4942(b)-1 · (b)-1 Operating foundations.
- 53.4942(b)-2 · (b)-2 Alternative tests.
- 53.4942(b)-3 · (b)-3 Determination of compliance with operating…
- 53.4943-1 · General rule; purpose.
- 53.4943-2 · Imposition of tax on excess business holdings of private…
- 53.4943-3 · Determination of excess business holdings.
- 53.4943-4 · Present holdings.
- 53.4943-5 · Present holdings acquired by trust or a will.
- 53.4943-6 · Five-year period to dispose of gifts, bequests, etc.
- 53.4943-7 · Special rules for readjustments involving grandfathered…
- 53.4943-8 · Business holdings; constructive ownership.
- 53.4943-9 · Business holdings; certain periods.
- 53.4943-10 · Business enterprise; definition.
- 53.4943-11 · Effective/applicability date.
- 53.4944-1 · Initial taxes.
- 53.4944-2 · Additional taxes.
- 53.4944-3 · Exception for program-related investments.
- 53.4944-4 · Special rules.
- 53.4944-5 · Definitions.
- 53.4944-6 · Special rules for investments made prior to January 1, 1970.
- 53.4945-1 · Taxes on taxable expenditures.
- 53.4945-2 · Propaganda influencing legislation.
- 53.4945-3 · Influencing elections and carrying on voter registration…
- 53.4945-4 · Grants to individuals.
- 53.4945-5 · Grants to organizations.
- 53.4945-6 · Expenditures for noncharitable purposes.
- 53.4946-1 · Definitions and special rules.
- 53.4947-1 · Application of tax.
- 53.4947-2 · Special rules.
- 53.4948-1 · Application of taxes and denial of exemption with respect…
- 53.4951-1 · Black lung trusts—taxes on self-dealing.
- 53.4952-1 · Black lung trusts—taxes on taxable expenditures.
- 53.4955-1 · Tax on political expenditures.
- 53.4958-0 · Table of contents.
- 53.4958-1 · Taxes on excess benefit transactions.
- 53.4958-2 · Definition of applicable tax-exempt organization.
- 53.4958-3 · Definition of disqualified person.