Question
Can I invest my surplus funds?
Answer

Yes. Campaign funds or surplus funds may be invested in bonds, certificates, tax-exempt securities, savings accounts or other similar instruments in financial institutions or in mutual funds. Financial institutions other than banks, savings and loan associations, and credit unions may NOT be used as the campaign depository into which contributions are deposited and out of which campaign expenditures are made. However, brokerage houses and other financial institutions may be used for investing campaign funds so long as the investment by the brokerage house or other institution is in the form of bonds, certificates, tax-exempt securities, and mutual funds.

Notify the PDC when you invest campaign or surplus funds

If you invest campaign funds, take the following steps:

  • Notify PDC by letter of the date, amount, and the name of the financial institution where the surplus is invested.  Do not report the investment as an expenditure on Schedule A or on the C-4 report.
  • Deposit all interest, dividends or income earned by the investment into the investment account.  
  • When the investment is terminated, re-deposit the principal plus the accrued earnings into the original campaign account.  Notify PDC by letter that this re-deposit has been made. Do not report this transfer as a contribution on the C-3. Report any income made on the investment as a miscellaneous receipt on line 1d of the C-3 report. If the balance of the investment account is lower when you terminate the account than when it began, report the difference as a monetary expenditure.
  • Check with the IRS or your personal tax consultant about any tax liability that the investment may create.

 

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