Part III. Enter in column (a) the names of all foundation

managers who took part in the acts of self-dealing listed in Part I, and who knew that the acts were self-dealing (except for foundation managers whose participation was not willful and was due to reasonable cause).

If more than one foundation manager took part in the act of self-dealing, knowing that it was such an act, and participation was willful and not due to reasonable cause, each is individually liable for the entire tax in connection with the act. But the foundation managers liable for the tax may prorate the payment among themselves. Enter in column (c) the tax to be paid by each foundation manager.

Carry the total amount in column (d) for each foundation manager to Part II, line 1.

Caution: The organization should not carry any amount from column (d) to Part II, line 1.

Complete Schedule B if you answered “Yes,” to Form 990-PF, Part VI-B, question 2b.

An initial excise tax of 30% is imposed on a private foundation's undistributed income on the first day of the second or any succeeding tax year after the tax year in connection with which income remains undistributed.

Use the 2025 Form 4720 to report the initial tax on undistributed income for tax years beginning in 2024 or earlier that remains undistributed at the end of the foundation's current tax year beginning in 2025. The initial tax won't apply to a private foundation's undistributed income:

• For any tax year it is an operating foundation (as defined in section 4942(j)(3) and related regulations or in section 4942(j)(5)); or

• To the extent it didn't distribute an amount solely because of an incorrect valuation of assets, provided the foundation satisfies the requirements of section 4942(a)(2); or

• For any year for which the initial tax was previously assessed or a notice of deficiency was issued.

Line 3. Undistributed income is corrected by making sufficient qualifying distributions to compensate for deficient qualifying distributions for a prior tax year. You must attach a statement that describes any qualifying distributions made to correct the undistributed income and the date(s) those distributions were made. If no qualifying distributions have been made to correct the undistributed income, explain why and describe steps you will take to make the necessary qualifying distributions. If applicable, indicate whether the election under section 4942(h) has been made. See the instructions for Form 990-PF, Part XII, lines 4b and 4c.

General Instructions Private foundations may be subject to an excise tax on the amount of any excess holdings, as described later. For purposes of section 4943, donor advised funds and certain supporting organizations are considered private foundations. For more information on the applicability of Schedule C to such organizations, see General rules on the permitted holdings of donor advised funds and certain supporting organizations in a business enterprise, later.

Requirement. If you answered “Yes,” to Form 990-PF, Part VI-B, question 3b; Form 990, Part V, question 8; or Form 5227, Part VIII, question 3b, or otherwise had excess business holdings, complete a Schedule C for each business enterprise in which the foundation had excess business holdings for its tax year beginning in 2025.

Taxes. A private foundation that has excess holdings in a business enterprise may become liable for an excise tax based on the amount of holdings. The initial tax is 10% of the value of the excess holdings and is imposed on the last day of each tax year that ends during the taxable period. The excess holdings are determined on the day during the tax year when they were the largest.

If the foundation keeps the excess business holdings after the initial tax has been imposed, the foundation becomes liable for an additional tax of 200% of the remaining excess

Instructions for Form 4720 (2025) 9

business holdings unless it disposes of them within the taxable period. However, if the foundation disposes of its excess business holdings during the correction period, the additional tax won't be assessed or, if assessed, will be abated and if collected, will be credited or refunded. For information on the correction period, go to IRS.gov TG 60 Taxes on Excess Business Holdings IRC 4943 .

Business enterprise. In general, this means the active conduct of a trade or business, including any activity regularly conducted to produce income from selling goods or performing services, that is an unrelated trade or business described in section 513.

The term “business enterprise” doesn't include a functionally related business, as defined in section 4942(j)(4). In addition, business holdings don't include program-related investments (such as investments in small businesses in economically depressed areas or in corporations to assist in neighborhood renovations) as defined in section 4944(c) and related regulations. Also, business enterprise doesn't include a trade or business at least 95% of the gross income of which comes from passive sources. For more information, go to IRS.gov TG 61 Taxes on Investments which Jeopardize Charitable Purposes IRC 4944 .

Excess business holdings. Excess business holdings is the amount of stock or other interest in a business enterprise that the foundation would have to dispose of to a person other than a disqualified person in order for the foundation's remaining holdings in the enterprise to be permitted holdings (section 4943(c)(1)). Go to IRS.gov TG 60 Taxes on Excess Business Holdings IRC 4943 for more information.

Sole proprietorships. In general, a private foundation can't have any permitted holdings in a business enterprise that is a sole proprietorship. For exceptions, go to IRS.gov TG 60 Taxes on Excess Business Holdings IRC 4943 . For a definition of sole proprietorship, see Regulations section 53.4943-10(e).

Corporate voting stock. This stock entitles a person to vote for the election of directors. Treasury stock and stock that is authorized but unissued isn't voting stock for these purposes. See Regulations sections 53.4943-3(b)(1)(ii) and 53.4943-3(b)(2)(ii). For a partnership (including a limited partnership) or joint venture, the term “profits interest” should be substituted for “voting stock.” For any unincorporated business enterprise that isn't a partnership, joint venture, or sole proprietorship, the term “beneficial interest” should be substituted for “voting stock.” See Regulations section 53.4943-3(c).

Nonvoting stock. Corporate equity interests that don't have voting power should be classified as nonvoting stock. Evidences of indebtedness (including convertible indebtedness), warrants, and other options or rights to acquire stock shouldn't be considered equity interests. See Regulations section 53.4943-3(b)(2).

For a partnership (including a limited partnership) or joint venture, the term “capital interest” should be substituted for “nonvoting stock.” For any unincorporated business that isn't a partnership, joint venture, or sole proprietorship, references to nonvoting stock don't apply for computation of permitted holdings. See Regulations section 53.4943-3(c)(4).

Attribution of business holdings. In determining the holdings in a business enterprise of either a private foundation or a disqualified person, any stock or other interest owned directly or indirectly by or for a corporation,

partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. In general, this rule doesn't apply to certain income interests or remainder interests of a private foundation in a split-interest trust described in section 4947(a)(2). See Regulations section 53.4943-8.

Taxable period. The taxable period begins on the first day the foundation has excess business holdings and ends on the earliest of:

• The mailing date of a notice of deficiency, under section 6212, in connection with the initial tax on excess business holdings related to those holdings;

• The date the excess is eliminated; or

• The date the initial tax on excess business holdings related to those holdings is assessed.

When a notice of deficiency isn't mailed because the restrictions on assessment and collection are waived or because the deficiency is paid, the date of filing the waiver or the date of paying the tax, respectively, will be treated as the end of the taxable period. See Regulations section 53.4943-9.

Exceptions to Tax on Excess Business Holdings

2% de minimis rule. A private foundation won't be treated as having excess business holdings in any enterprise in which it, together with related foundations, as described in the instructions for Form 990-PF (under the definition for “disqualified person” in the General Instructions ), owns not more than 2% of the voting stock and not more than 2% in value of all outstanding shares of all classes of stock.

Disposition of excess business holdings within 90 days. Generally, when a private foundation acquires excess business holdings other than as a result of purchase by the foundation (such as an acquisition by a disqualified person), the foundation won't be taxed on those excess holdings if it disposes of enough of them so that it no longer has an excess. To avoid the tax, the disposition must take place within 90 days from the date the foundation knew, or had reason to know, of the event that caused it to have excess business holdings. That 90-day period will be extended to include the period during which federal or state securities laws prevent the foundation from disposing of those excess business holdings. See Regulations section 53.4943-2(a).

General rules on the permitted holdings of a private foundation in a business enterprise. No excess business holdings tax is imposed (a) if a private foundation and all disqualified persons together hold no more than 20% of the voting stock of a business enterprise, or (b) on nonvoting stock, if all disqualified persons together don't own more than 20% of the voting stock of the business enterprise. If the private foundation and all disqualified persons together don't own more than 35% of the enterprise's voting stock, and effective control is in one or more persons who aren't disqualified persons in connection with the foundation, then 35% may be substituted for 20% wherever it appears in the preceding paragraph. See sections 4943(c)(2) and 4943(c)(3). If a private foundation and all disqualified persons together had holdings in a business enterprise of more than 20% of the voting stock on May 26, 1969, substitute that percentage for 20% and for 35% (if the holding is greater than 35%), using the principles of section 4943(c)(4) that apply.

10 Instructions for Form 4720 (2025)

However, the percentage substituted can't be more than 50%. The percentage substituted under the preceding paragraph is (1) subject to reductions and limitations (see sections 4943(c)(4)(A)(ii) and 4943(c)(4)(D)), and (2) applicable, both in connection with the voting stock and, separately, in connection with the value of all outstanding shares of all classes of stock (see section 4943(c)(4)(A)(iii)).

Interests held by a private foundation (other than donor advised funds and supporting organizations) on May 26, 1969. For private foundations, other than donor advised funds and supporting organizations considered to be private foundations for purposes of section 4943, that had business holdings on May 26, 1969 (or holdings acquired by trust or will as described below), that were more than the current limits permit, there are transitional rules that permit the foundation to dispose of the excess over time without being subject to the tax on excess business holdings.

During the first phase, no excess business holdings tax was imposed on a private foundation for interests held since May 26, 1969, if the foundation had excess holdings on that date. The first phase is:

• A 20-year period beginning on May 26, 1969, if on that date the foundation and all disqualified persons held more than a 95% voting interest in the enterprise (the 20-year first phase expired on May 25, 1989);

• A 15-year period beginning on May 26, 1969, if on that date the foundation and all disqualified persons together had more than a 75% voting stock interest (or more than a 75% profits or beneficial interest of any unincorporated enterprise), or more than a 75% interest in the value of all outstanding shares of all classes of stock (or more than a 75% capital interest of a partnership or joint venture) in the enterprise (the 15-year first phase expired on May 25, 1984); and

• A 10-year period beginning on May 26, 1969, in all other cases in which the foundation had excess business holdings on May 26, 1969. The 10-year first phase expired on May 25,

During the second phase (the 15-year period after the first phase), if the foundation's disqualified persons hold more than 2% of the enterprise's voting stock, the foundation will be liable for tax if the foundation holds more than 25% of the voting stock or if the foundation and its disqualified persons together hold more than 50% of the voting stock.

However, during the second phase, if a foundation's disqualified persons purchase voting stock in a business enterprise after July 18, 1984, causing the combined holdings of the disqualified persons to exceed 2% of the enterprise's voting stock, the foundation has 5 years to reduce its holdings in the enterprise to below its second phase limit before the increase will be treated as held by the foundation. See sections 4943(c)(4)(D) and 4943(c)(6).

The first-phase periods must be suspended pending the outcome of any judicial proceeding the private foundation brings and which is necessary to reform, or to excuse it from compliance with its governing instrument or similar instrument in effect on May 26, 1969. See section 4943(c)(4) (C) and Regulations section 53.4943-4.

Holdings acquired by trust or will. Holdings acquired under the terms of a trust that was irrevocable on May 26, 1969, or under the terms of a will executed by that date, are treated as held by the foundation on May 26, 1969, except that the 15- and 10-year periods of the first phase for the

holdings start on the date of distribution under the trust or will instead of on May 26, 1969. See section 4943(c)(5) and Regulations section 53.4943-5. See section 4943(d)(1) and Regulations section 53.4943-8 for rules relating to constructive holdings held in a corporation, partnership, estate, or trust for the benefit of the foundation.

Gifts or bequests of business holdings. Except as provided in the exception regarding Holdings acquired by trust or will (discussed above), there is a special rule for private foundations that have excess business holdings as a result of a change in holdings after May 26,1969. This rule applies if the change is other than by purchase by the foundation or by disqualified persons (such as through gift or bequest) and the additional holdings result in the foundation having excess business holdings. In that case, the foundation has 5 years to reduce these holdings or those of its disqualified persons to permissible levels to avoid the tax. See section 4943(c)(6) and Regulations section 53.4943-6.

A private foundation that received an unusually large gift or bequest of business holdings after 1969, and that has made a diligent effort to dispose of excess business holdings, may apply for an additional 5-year period to reduce its holdings to permissible levels if certain conditions are met. See section 4943(c)(7).

General rules on the permitted holdings of donor ad- vised funds and certain supporting organizations in a business enterprise. Rules similar to those described above for interests held by private foundations on May 26, 1969, will be applied to determine if donor advised funds or certain supporting organizations with interests as of August 17, 2006, have any excess business holdings. However, the date of August 17, 2006, will be substituted for May 26, 1969.

Donor advised fund. In general, a donor advised fund is a fund or account separately identified by reference to contributions of a donor or donors that is owned and controlled by a sponsoring organization and for which the donor has or expects to have advisory privileges concerning the distribution or investment of the funds. See Schedule K , later, for further details.

Sponsoring organization. A sponsoring organization is any section 170(c) organization other than governmental entities (described in section 170(c)(1) and (2)(A)) that isn't a private foundation, as defined in section 509(a)(3), that maintains one or more donor advised funds. See section 4966(d)(1).

Supporting organizations. Only certain supporting organizations are subject to the excess business holdings tax under section 4943. These include (1) Type III supporting organizations that aren't functionally integrated, and (2) Type II supporting organizations that accept any gift or contribution from a person who by himself or in connection with a related party controls the supported organization that the Type II supporting organization supports. (See the 2025 Instructions for Schedule A (Form 990), Part I, question 11, for help in determining the type of your supporting organization.)

Readjustments, distributions, or changes in relative val- ue of different classes of stock. See Regulations section 53.4943-4(d)(10) for special rules whereby increases in the percentage of value of holdings in a corporation that result solely from changes in the relative values of different classes of stock won't result in excess business holdings.

See Regulations section 53.4943-6(d) for rules on treatment of increases in holdings due to readjustments, distributions, or redemptions.

Instructions for Form 4720 (2025) 11

See Regulations section 53.4943-7 for special rules for readjustments involving grandfathered holdings.

Exceptions from self-dealing taxes on certain disposi- tions of excess business holdings. Section 101(I)(2)(B) of the Tax Reform Act of 1969 provides for a limited exception from self-dealing taxes for private foundations that dispose of certain excess business holdings to disqualified persons, as long as the sales price equals or is more than fair market value.

The excess business holdings involved are interests that are subject to the section 4941 transitional rules for May 26, 1969, holdings. These interests would also be subject to the excess business holdings tax if they were not reduced by the required amount.

Specific Instructions Complete columns (a) and (b) of Schedule C if sections 4943(c)(4), 4943(c)(3) (using the principles of 4943(c)(4)), or 4943(c)(5) apply.

Complete column (a) and column (c) (if applicable) if sections 4943(c)(2) or 4943(c)(3) (using the principles of 4943(c)(2)) apply.

Complete Schedule C for that day during the tax year when the foundation's excess holdings in the enterprise were largest.

Line 1. Enter in column (a) the percentage of voting stock the foundation holds in the business enterprise.

If the foundation is using the rules or principles for determining present holdings under section 4943(c)(4)(A) or (D) (or rules similar to that for donor advised funds and certain supporting organizations), enter in column (b) the percentage of value the foundation holds in all outstanding shares of all classes of stock.

Don't include in either column (a) or (b) stock treated as held by disqualified persons:

• Under section 4943(c)(6) or Regulations sections 53.4943-6 and 53.4943-10(d), or

• During the first phase if the first phase is still in effect (see Regulations sections 53.4943-4(a), (b), and (c)).

Line 2. If the foundation is using the rules or principles for determining present holdings under section 4943(c)(4) (or rules similar to that for donor advised funds and certain supporting organizations), refer to that section and Regulations section 53.4943-4(d) to determine which entries to record in columns (a) and (b). Enter in column (a) the excess of the substituted combined voting level over the disqualified person voting level. Enter in column (b) the excess of the substituted combined value level over the disqualified person value level.

If the foundation is using the rules or principles for determining permitted holdings under section 4943(c)(2), refer to that section to determine which entries to record in column (a). Enter in column (a) the percentage, using the general rule (section 4943(c)(2)(A)) or the 35% rule (see section 4943(c)(2)(B)), if applicable, of permitted holdings the foundation may have in the enterprise's voting stock. If the foundation determines the permitted holdings under section 4943(c)(2)(B), attach a statement showing effective control by a third party.

Line 3. Enter the value of any stock, interest, etc., in the business enterprise that the foundation is required to dispose of so the foundation's holdings in the enterprise are permitted. See section 4943 and related regulations.

A private foundation using the section 4943(c)(4) rules, or a donor advised fund or supporting organization using rules similar to that, has excess holdings if line 1 is more than line 2 in either column (a) or column (b). Don't include in column (b) the value of any voting stock included in column (a).

A private foundation using the section 4943(c)(2) rules has excess holdings if line 1 is more than line 2 in column (a) or if the private foundation holds nonvoting stock and all disqualified persons together own more than 20% (or 35%, if applicable) of the enterprise's voting stock, interest, etc. In the latter case, enter in column (c) the value of all nonvoting stock the foundation holds.

Line 4. Enter the value of excess holdings disposed of under the 90-day rule in Regulations section 53.4943-2(a)(1)(ii). If other conditions preclude imposition of tax on excess business holdings, include the value of the nontaxable amount on this line and check the appropriate boxes on the statement page attached to the electronic version of Form 4720. Organizations not required to file electronically may attach an explanation.

Line 5. Compute the excess holdings in a business enterprise subject to tax.

Line 8. Excess business holdings are corrected by taking action as needed such that the foundation no longer has excess business holdings in a business enterprise. Answer “Yes,” if the excess business holdings have been corrected in whole or in part.

• If correction has been made, provide a detailed description of any correction made, and the date of each correction. If correction is made in more than one transaction, describe each transaction separately.

• If correction has not been made, provide a detailed explanation of why correction hasn't been made and what steps are being taken to make the correction.

General Instructions

Requirement. Complete Schedule D if you answered “Yes,” to Form 990-PF, Part VI-B, question 4a or b; or Form 5227, Part VIII, question 4a or b. Each manager of the organization or trust that answered "Yes," to Form 990-PF, Part VI-B, question 4a or b; or Form 5227, Part VIII, question 4a or b and who took part in making the investment should also complete Schedule D. Report each investment separately. Paying tax and filing a Form 4720 are required for each year or part of a year in the taxable period that applies to the investments that jeopardize the foundation's charitable purpose. Generally, the taxable period begins with the date of the investment and ends with the date corrective action is completed, a notice of deficiency is mailed, or the initial tax is assessed, whichever comes first. Therefore, in addition to investments made in 2025, include all investments subject to tax that were made before 2025 if those investments were not removed from jeopardy before 2025 and the initial tax was not assessed before 2025.

Taxable investments. An investment to be taxed on this schedule is an investment by a private foundation that jeopardizes the carrying out of its exempt purposes (for example, if it is determined that the foundation managers, in

12 Instructions for Form 4720 (2025)

making the investment, didn't exercise ordinary business care and prudence, under prevailing facts and circumstances, in providing for the long- and short-term financial needs of the foundation to carry out its exempt purposes). See Regulations section 53.4944-1(a)(2). An investment isn't taxed on this schedule if it is a program-related investment; that is, one whose primary purpose is one or more of those described in section 170(c) (2)(B) (religious, charitable, educational, etc.). A significant purpose of such an investment can't be the production of income or the appreciation of property. See section 4944(c) and Regulations section 53.4944-3.

Initial taxes on foundation. The initial tax is 10% of the amount invested for each year or part of a year in the taxable period.

Initial taxes on foundation managers. When a tax is imposed on an investment that jeopardizes the charitable purpose of the foundation, the tax will be 10% of the investment for each year or part of a year in the taxable period, up to $10,000 for any one investment. It is imposed on all foundation managers who took part in the act, knowing that it was such an act, except for foundation managers whose participation was not willful and was due to reasonable cause. Any foundation manager who took part in making the investment must pay the tax.

Specific Instructions