Usually, these foundations are subjected to a tax of 2% on net investment income under section 4940(a). But a few private foundations that meet the requirements of section 4940(e) may qualify for a 1% tax. Certain exempt operating foundations described in section 4940(d)(2) may not owe any tax at all. For an organization making an election under section 41(e)(6)(D), section 4940 doesn't apply. However, an exempt foreign private foundation is subjected to a 4% tax on their gross investment income derived from U.S sources.