A bill to amend the Internal Revenue Code of 1954 to make certain changes in the tax treatment of private foundations.

Amends the Internal Revenue Code to provide that the income tax deduction for charitable contributions to private foundations shall be the same as the deduction allowed for contributions to public charities (50 percent of taxpayer adjusted gross income). Eliminates distinctions between public charities and private foundations for purposes of the tax deduction for charitable contributions.

Exempts grants made to charitable organizations by a private foundation from the excise tax penalties on private foundation taxable expenditures, if the foundation making the grant has not made grants to the organization in excess of $15,000 during the calendar year.

Permits the abatement of excise tax penalties imposed on private foundations if the Secretary of the Treasury determines that the activity giving rise to the tax penalty was due to reasonable cause and not to intentional disregard of rules and regulations, and was corrected within the specified time period for corrections.

Redefines "members of family" for purposes of identifying disqualified persons under the private foundation self- dealing rules, to include the individual's spouse, ancestors, and children, and the spouses of the individual's children.

Limits the amount of private foundation income which is required to be distributed for a taxable year to the amount of the minimum investment return, as defined under the private foundation excise tax penalty rules, (currently, the greater of minimum investment return or adjusted net income).

Classifies expenses for the production of gross investment income or for the management of investment property as qualifying distributions for purposes of requirements relating to the distribution of private foundation distributable income.

Excludes capital gain income from the computation of net investment income for purposes of computing the two percent tax on the investment income of private foundations.