IRS Published Taxpayer Determination Letter 202623019

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document. Native kind: determination letter; this is not a private letter ruling.

# Department of the Treasury Internal Revenue Service Tax Exempt and Government Entities

IRS

Date:

03/10/2026

Employer ID number:

Person to contact:

Name:

ID number:

Telephone:

Fax:

Release Number: 202623019
Release Date: 6/5/26

LEGEND

B = Organization
C = Historical Property
e dollars = Amount
f dollars = Amount
g dollars = Amount
H = Date

UIL: 4942.03-07

Dear
:

Why you are receiving this letter
We received your
request for approval of a set-aside under Internal Revenue Code (IRC)
Section 4942(g)(2). Based on the information furnished. your request is approved.

You are recognized as tax-exempt under IRC Section 501(c)(3) and as a private foundation under IRC
Section 509(a).

What you need to do

Document your approved set-aside(s) in your records as pledges or obligations. You must pay the set-aside
amounts within 60 months after the date of the first set-aside. as required under IRC Section 4942(g)(2).

Take into account the amounts set aside when determining your minimum investment return under IRC Section
4942(e)(1)(A) and the income attributable to your set-asides when computing your adjusted net income under
IRC Section 4942(f).

Description of set-aside request

You propose to set side e dollars to provide funds to restore C, a historic property. C is listed on the National
Register of Historic places and is owned by B. an IRC Section 501(c)(3) public charity. B is working on the
second phase of a historic rehabilitation project to restore exterior. interior, foundation, and mechanical,
electrical, and plumbing systems.

You have a matching grant agreement with B to provide e dollars to fund approximately one-third of the
estimated total cost of the restoration project, which is g dollars. B must raise f dollars of the remaining
estimated costs from other sources. B will use e dollars solely to pay for reimbursable costs of the project such
as labor, materials, fees and permits. The reimbursable costs shall not include costs of publicity, planning,
fundraising, legal or accounting services. financing, and staff salaries.

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The project is better accomplished using a set-aside for the purpose of the matching grant program and the
preservation of control over the term of the project. You believe that the matching grant program is necessary to
stimulate grants from the community at large, due to the extent and cost of the rehabilitation and restoration
needed for C. The approximate five-year period provided in the agreement to raise the necessary matching
funds has been mutually agreed upon as allowing sufficient time to complete the anticipated capital campaign
for the project.

You expect to pay the amount set-aside within 60 months after the set-aside. The agreement provides that the
grant be paid by no later than H.

Basis for our determination

IRC Section 4942(g)(2)(A) states that an amount set aside for a specific project, which includes one or more
purposes described in IRC Section 170(c)(2)(B), may be treated as a qualifying distribution if it meets the
requirements of IRC Section 4942(g)(2)(B).

IRC Section 4942(g)(2)(B) states that an amount set aside for a specific project will meet the requirements of
this subparagraph if, at the time of the set-aside, the foundation establishes that the amount will be paid within
five years and either clause (i) or (ii) are satisfied.

IRC Section 4942(g)(2)(B)(i) is satisfied if, at the time of the set-aside, the private foundation establishes that
the project can better be accomplished using the set-aside than by making an immediate payment.

Treasury Regulation (Treas. Reg.) Section 53.4942(a)-3(b)(1) provides that a private foundation may establish a
project as better accomplished by a set-aside than by immediate payment if the set-aside satisfies the suitability
test described in Treas. Reg. Section 53.4942(a)-3(b)(2).

Treas. Reg. Section 53.4942(a)-3(b)(2) provides that specific projects better accomplished using a set-aside
include, but are not limited to, projects where relatively long-term expenditures must be made requiring more
than one year's income to assure their continuity.

In Revenue Ruling 74-450, 1974-2 C.B. 388, an operating foundation converted a portion of newly acquired
land into a public park under a four-year construction contract. The construction contract payments were to be
made mainly during the final two years. This constituted a "specific project." The foundation's set-aside of all
its excess earnings for four years was treated as a qualifying distribution under IRC Section 4942(g)(2).

## Additional information

This determination is directed only to the organization that requested it. IRC Section 6110(k)(3) provides that it
may not be used or cited as a precedent.

Visit www.irs.gov/setasides for more information.

We'll make this determination letter available for public inspection after deleting personally identifiable information,
as required by IRC Section 6110. Enclosed are Letter 437, Notice of Intention to Disclose -Rulings, and a copy of
the letter that shows our proposed deletions.

. If you disagree with our proposed deletions, follow the instructions in the Letter 437 on how to notify us.

. If you agree with our deletions, you don't need to take any further action.

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Keep a copy of this letter for your records.
If you have questions, you can call the contact the person shown above.
Sincerely,
Stephen A. Martin
Director, Exempt Organizations
Rulings and Agreements

Enclosures:
Redacted Letter 4797
Letter 437

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