501(c)(3). An Internal Revenue Code paragraph (section 501, subsection c, paragraph 3) designating a tax-exempt, charitable, nonprofit organization. All organizations with this designation are eligible to receive grants from a donor-advised fund.

Foreign bonds. Bonds issued by a foreign corporation or by a foreign government or government agency.

Foreign mutual fund. A mutual fund that invests primarily in non-U.S. securities.

Foreign source income. Income earned from non-U.S. sources, such as dividends paid by foreign corporations. Mutual funds that invest in foreign corporations may earn income from their investments in foreign corporations and distribute this income to fund shareholders in the form of ordinary income dividends. This foreign source income is reported to shareholders on Form 1099-DIV.

Foreign stocks. Represent ownership in a foreign corporation. The stocks of a few large foreign companies are traded on U.S. stock markets, but for the most part, foreign stocks must be purchased in the countries where they are issued.

Foreign tax credit. A credit to eliminate double taxation on foreign income earned by a fund. A fund that has invested in foreign companies and has paid income taxes to foreign governments may pass through the tax benefits resulting from these foreign tax payments to its shareholders in certain circumstances. A fund will report these foreign tax payment amounts to shareholders in box 6 of Form 1099-DIV. This amount may be taken as a foreign tax credit or as a tax deduction by shareholders.