{"data":{"id":"us-ky/krs-273.400","jurisdiction":"us-ky","citation":"KRS 273.400","heading":"Definition -- Internal Revenue Code -- Acts prohibited -- Policy of state","body":"regarding charitable trust -- Liability of trustee -- Powers of Attorney General.\nNotwithstanding any other provisions of this chapter:\n(1) \"Internal Revenue Code\" as used in th is section means the Internal Revenue Code\nof 1954, in effect on January 1, 1970, including all appropriate provisions of the\nTax Reform Act of 1969 at the date specified in that law, exclusive of any\namendments made subsequent to December 31, 1969.\n(2) No corporation which is a \"private foundation\" as defined in Section 509 of the\nInternal Revenue Code shall:\n(a) Engage in any act of \"self -dealing\" (as defined in Section 4941(d) of the\nInternal Revenue Code) which would give rise to any liability for any t ax\nimposed by Section 4941 of the Internal Revenue Code;\n(b) Retain any \"excess business holdings\" (as defined in Section 4943(c) of the\nInternal Revenue Code) which would give rise to any liability for any tax\nimposed by Section 4943 of the Internal Revenue Code;\n(c) Make any investment which would jeopardize the carrying out of any of its\nexempt purposes, within the meaning of Section 4944 of the Internal Revenue\nCode, so as to give rise to any liability for any tax imposed by Section 4944 of\nthe Internal Revenue Code;\n(d) Make any \"taxable expenditures\" (as defined in Section 4945(d) of the\nInternal Revenue Code) which would give rise to any liability for any tax\nimposed by Section 4945 of the Internal Revenue Code.\n(3) Each corporation which is a \"privat e foundation\" as defined in Section 509 of the\nInternal Revenue Code shall, for the purposes specified in its articles, distribute at\nsuch time and in such manner, for each taxable year, amounts at least sufficient to\navoid liability for any tax imposed by Section 4942 of the Internal Revenue Code.\n(4) Subsections (2) and (3) of this section express the continuing policy of this state\nwith respect to charitable trust interests and are enacted to assist corporations which\nare \"private foundations\" as defined in Section 509 of the Internal Revenue Code in\nmaintaining various tax benefits extended to them, and shall apply to any\ncorporations described therein; provided, however, subsections (2) and (3) of this\nsection shall not apply to a corporation in existen ce on July 1, 1972 to the extent\nthat such corporation shall provide to the contrary by amendment to its articles of\nincorporation adopted after July 1, 1972.\n(5) Violation of a provision of subsection (2) or (3) of this section by a corporation to\nwhich said provisions are applicable shall not work a forfeiture or dissolution of the\ncorporation. No trustee, director or officer of a corporation to which the provisions\nof subsection (2) or (3) of this section are applicable shall be personally liable for a\nviolation of a prohibition or requirement of said provisions unless he participated in\nsuch violation knowing that it was a violation, nor shall such trustee, director or\nofficer be personally liable if such violation was not willful and was due to\nreasonable cause; provided, however, that this subsection does not exonerate a\ntrustee, director or officer from any responsibility or liability to which he is subject\nunder any other rule of law, whether or not duplicated in subsection (2) or (3) of this\nsection.\n(6) Except as provided in subsection (5) of this section, nothing in this section shall\nimpair the rights and powers of the courts or the Attorney General of this state with\nrespect to any such corporation.\n(7) In furtherance of the continuing policy of this state to assist charitable trust interests\nin maintaining various tax benefits extended to them, the provisions of subsections\n(2) and (3) of this section shall be deemed to have been in force and effect on\nJanuary 1, 1970; provided, however, the provisions of subsections (2) and (3) of this\nsection shall apply to a corporation organized before January 1, 1970 which is a\n\"private foundation\" as defined in Section 509 of the Internal Revenue Code only\non and after the first day of its first taxable year (for federal tax purposes) beginning\non or after January 1, 1972.","path":["KRS Chapter 273"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=13731","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:53:25Z","sha256":"7763024666b5764e4c118ac090b6eb5bd0c8efaf1b0d273c400bcc64ec1b1aee","source_id":"us-ky","stale":false,"prev":"us-ky/krs-273.392","next":"us-ky/krs-273.401"},"notice":"GroundRules: Original legal text. Not legal advice."}