Definition

(1) A disqualified person as defined in Section 4958(f)(1) is:

a. Any person who was, at any time during the 5-year period ending on the date

of the transaction, in a position to exercise substantial influence over the affairs of the organization,

b. A member of the family of a disqualified person,

c. A 35% controlled entity,

d. A person described in a, b, or c above of a related Section 509(a)(3)

supporting organization to the ATEO,

e. A donor/donor advisor described in Section 4958(f)(7) involved in a

transaction with a DAF, or

f. An investment advisor defined in Section 4958(f)(8) with respect to a

sponsoring organization of a DAF.

See Section 4958(f)(1) and Treas. Reg. 53.4958-3(a)(1).

(2) Per Section 4958(f)(4), family members are generally determined under Section

4946(d) with one exception. Section 4958 family members will include brothers and sisters (by whole or half-blood) of the individual and their spouses. Treas. Reg. 53.4958-3(b)(1) defines a disqualified person’s family members as limited to the following:

a. Spouse

b. Brothers or sisters (by whole or half-blood)

11

c. Spouses of brothers or sisters (by whole or half-blood)

d. Ancestors

e. Children and their spouses

f. Grandchildren and their spouses

g. Great grandchildren and their spouses

Note: For purposes of the above family members, a legally adopted child of an individual is treated as a child of such individual by blood.

(3) Section 4958(f)(3) and Treas. Reg. 53.4958-3(b)(2) define a 35% controlled entity

as:

a. A corporation where disqualified persons own more than 35% of the

combined voting power.

Note: Combined voting power includes voting power represented by direct or indirect holdings of voting stock but not voting rights held as a director, trustee, or other fiduciary.

b. A partnership where disqualified persons own more than 35% of the profits

interest; and

c. A trust or estate where disqualified persons own more than 35% of the

beneficial interest.

Note: A disqualified person who owns 35% of a limited liability company (LLC) interest is treated in the same manner as under Section 7701. See also Treas. Reg. 301.7701-1 to 301.7701-3.

(4) Donor and donor advisors under Section 4958(f)(7) are:

a. Persons described in Section 4966(d)(2)(A)(iii),

b. A member of the family of those individuals, or

c. A 35% controlled entity as defined in Section 4958(f)(3).

(5) Investment Advisors defined in Section 4958(f)(8) are:

a. Persons (other than employees) compensated by a sponsoring organization

for managing the investment of, or providing investment advice with respect to, assets maintained in DAFs owned by the sponsoring organization.

b. A member of the family of an investment advisor, or

c. A 35% controlled entity as defined in Section 4958(f)(3).