DRAFT — pending professional review

NOT LEGAL OR TAX ADVICE. This module is reference material for the HigherSelf Network cohort. Pending Lumina tone review, outside-CPA review, ERISA-counsel review for any Solo 401(k) or ROBS section, and Grace Fields authorization before external publication. Cohort-facing facts use anonymized framing until written consent is on file.

nonprofit strategy

Excess-benefit safe harbor — § 4958 rebuttable presumption

IRC § 4958; Treas. Reg. § 53.4958-6

Eligibility

Best when: Any HigherSelf Nonprofit transaction with a disqualified person (officer, director, substantial contributor, family member).
Do not use when: Transaction is below FMV to the disqualified person OR documentation is missing.

Mechanics

Three-step procedure

Approval by an authorized body composed of independent persons
Reliance on appropriate comparable data (e.g., comp surveys, FMV appraisals)
Adequate documentation of basis for determination

Documentation

Independent-board minutes
FMV / comp data
Written rationale signed by approving body

Risks & warnings

Penalties if violated:

25% tax on disqualified person
10% tax on organization manager who knowingly approved
200% if uncorrected

Applies to

HigherSelf Nonprofit

Interacts with

Intercompany services at arm's length

Research only — not legal or tax advice