N.Y. Estates, Powers & Trusts Law § 8-1.8: Private foundations: administration of certain trusts as defined

§ 8-1.8 Private foundations: administration of certain trusts as defined

in the United States internal revenue code of 1954

(a) For purposes of this section, a "trust" means a private foundation

as defined in section 509 of the United States Internal Revenue Code of

1986 ("code") including a private foundation charitable trust as defined

in section 4947(a)(1) of the code, or a split-interest trust as defined

in section 4947(a)(2) of the code, whether heretofore or hereafter

created which is administered by a trustee described in subparagraph

(a)(1) of section 8-1.4. The administration of a trust, as herein

defined, is subject to the following provisions:

(1) The trust shall distribute for each taxable year such amounts at

such time and in such manner as sufficient for such trust to avoid

liability for any tax imposed on undistributed income under section 4942

of the code.

(2) The trust shall not engage in any act of self-dealing which would

result in the taxation of any amount involved with respect to any such

act of self-dealing under section 4941 of the code.

(3) The trust shall not retain any excess business holdings which

would result in the taxation of any such excess business holdings under

section 4943 of the code unless the trust is exempt from section 4943 of

the code pursuant to section 4947(b)(3)(A) or (B) of the code.

(4) The trust shall not make any investments in such a manner as to

jeopardize the carrying out of any such trust's exempt purposes which

would result in the taxation of any such investments under section 4944

of the code unless the trust is exempt from section 4944 of the code

pursuant to section 4947(b)(3)(A) or (B) of the code.

(5) The trust shall not make any taxable expenditures which would

result in the liability of the trust for any tax imposed on any such

taxable expenditures under section 4945 of the code.

Except as provided in paragraph (b), this paragraph applies

notwithstanding any provision of the governing instrument of a trust.

(b) Paragraph (a) shall not apply with respect to assets transferred

in trust prior to the effective date of this section to the extent that

it conflicts with any mandatory direction in the governing instrument of

the trust unless such conflicting direction is removed as impracticable

under this article or in any other manner provided by law. The absence

of a specific provision in the governing instrument of the trust for the

current use of the principal of the fund, or the presence in such an

instrument of a provision, as to the principal of a fund, limited to the

principal's being held, invested and reinvested, is not such a

conflicting mandatory direction.

(b-1) A trust, as defined in paragraph (a) of this section, required

by section 6104(d) of the code to make available for public inspection

its annual return shall publish notice of the availability of such

return for inspection. Such notice shall be published, not later than

the day prescribed for filing such annual return (determined with regard

to any extension of time for filing), in a newspaper designated by the

clerk of the county in which the principal office of the trust is

located, having general circulation in that county. When such county is

located within a city with a population of one million or more, such

designation shall be as though the notice were a notice or advertisement

of judicial proceedings. The notice shall state that the annual return

of the trust is available at its principal office for inspection during

regular business hours by any citizen who requests it within one hundred

eighty days after the date of such publication, and shall state the

address and the telephone number of the trust's principal office and the

name of its principal manager. A copy or notice published in a newspaper

other than the newspaper or newspapers designated by the county clerk

shall not be deemed to be one of the publications required by this

paragraph.

(c) All references in this section to sections of the code shall be to

such sections as amended from time to time, or to corresponding

provisions of subsequent internal revenue laws.

(d) Nothing in this act shall impair the rights and powers of the

courts or the attorney-general of this state.