# @edwardcollins_upleveled on Instagram

- **Type:** Video
- **Original URL:** https://www.instagram.com/p/C5geZmROH91
- **Gondola URL:** https://gondola.cc/posts/35104549-edwardcollins-upleveled-instagram
- **Thumbnail:** https://img.gondola.cc/tr:w-,h-,fo-auto/postThumbnails/2038bd23b5.jpg
- **Posted:** 2024-04-08T16:36:48.000+00:00
- **Account Owner:** Edward Collins | Money Lawyer & Wealth Strategist (@edwardcollins_upleveled) — https://gondola.cc/edwardcollins_upleveled

## Caption

Essentially, under section 4941 of the Internal Revenue Code and related regulations, a private foundation’s disqualified persons — those who control and fund the foundation — are prohibited from direct and indirect financial transactions with the foundation unless a specific exception applies.
The term “disqualified person” includes the following:
- a substantial contributor to the foundation;
- foundation managers (officers, directors, trustees, or person with similar powers);
- any owner of more than 20 percent of the combined voting power of a corporation, profits interest of a partnership, or beneficial interest in a trust/association which is a substantial contributor;
- family members (spouses, ancestors, children, grandchildren, great-grandchildren, and spouses of children, grandchildren and great-grandchildren) of an individual described above;
- controlled entities (e.g., a corporation of which disqualified persons own more than 35 percent of the combined voting power); and
- certain government officials.

While the self-dealing rules expressly prohibit compensation to disqualified persons, an important exception allows compensation, payment of expenses and reimbursement of expenses for personal services provided by disqualified persons, if the amounts are reasonable and necessary to carry out the foundation’s exempt purposes, and are not excessive.

In general, reasonable compensation is the amount that would ordinarily be paid for like services by a like enterprise under like circumstances. Consider how much actual services are being rendered and measure that against how much actual work/effort is being engaged in by the foundation each year. If the foundation has a passive investment portfolio that is more of a set it and forget it style and if it only makes one or two distributions to other charities throughout the year, it’s going to be nearly impossible to justify any form or substantial payments to the disqualified person.
#TaxCode #IRS #BusinessOwners #FinancialLiteracy #GetUpleveled

credit (IG):
Michael Hatchett - @michael.hatchett.54
Scott Royal Smith - @scottloveslife 
SF0415

## Stats

- **Views:** 23,176
- **Likes:** 841
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- **Comments:** 16

## Tags

taxcode, irs, businessowners, getupleveled, financialliteracy

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