Tax990 Knowledge Base

What is Excess Distribution Carryover?

If a private foundation distributes more than its required distributable amount in a given year, the excess can be carried over to the next five years. This is known as excess distribution carryover. The foundation can use this carryover to satisfy future distribution requirements and avoid penalties for undistributed income.

Note: Private foundations cannot create excess distributions this year by designating any part of their qualifying distributions and using the carryover to satisfy this year's distributable amount.