Assist, Inc., a § 501(c)(3) organization, receives the following sources of support during the tax year.
General public for services rendered$22,000
Governmental unit A for services rendered30,000
Governmental unit B for services rendered3,000
Governmental unit C for services rendered8,000
Gross investment income19,000
Contributions from individual disqualified persons18,000
Is Assist, Inc., classified as a private foundation? Explain.
What will be an ideal response?
To not be classified as a private foundation, Assist must receive broad public support. To receive broad public support, Assist must satisfy both an external support test and an internal support test.?The external support test requires that more than one-third of Assist’s support for the taxable year come from the governmental units and the general public. For this purpose, support from a governmental unit is counted only to the extent of the greater of $5,000 or 1% of the total support.??
| Governmental unit A | $ 5,000 |
| Governmental unit B | 3,000 |
| Governmental unit C | 5,000 |
| General public | 22,000 |
| External support | $35,000 |
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