
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC4942]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                 Subtitle D--Miscellaneous Excise Taxes
 
     CHAPTER 42--PRIVATE FOUNDATIONS; AND CERTAIN OTHER TAX-EXEMPT 
                              ORGANIZATIONS
 
                    Subchapter A--Private Foundations
 
Sec. 4942. Taxes on failure to distribute income


(a) Initial tax

    There is hereby imposed on the undistributed income of a private 
foundation for any taxable year, which has not been distributed before 
the first day of the second (or any succeeding) taxable year following 
such taxable year (if such first day falls within the taxable period), a 
tax equal to 15 percent of the amount of such income remaining 
undistributed at the beginning of such second (or succeeding) taxable 
year. The tax imposed by this subsection shall not apply to the 
undistributed income of a private foundation--
        (1) for any taxable year for which it is an operating foundation 
    (as defined in subsection (j)(3)), or
        (2) to the extent that the foundation failed to distribute any 
    amount solely because of an incorrect valuation of assets under 
    subsection (e), if--
            (A) the failure to value the assets properly was not willful 
        and was due to reasonable cause,
            (B) such amount is distributed as qualifying distributions 
        (within the meaning of subsection (g)) by the foundation during 
        the allowable distribution period (as defined in subsection 
        (j)(2)),
            (C) the foundation notifies the Secretary that such amount 
        has been distributed (within the meaning of subparagraph (B)) to 
        correct such failure, and
            (D) such distribution is treated under subsection (h)(2) as 
        made out of the undistributed income for the taxable year for 
        which a tax would (except for this paragraph) have been imposed 
        under this subsection.

(b) Additional tax

    In any case in which an initial tax is imposed under subsection (a) 
on the undistributed income of a private foundation for any taxable 
year, if any portion of such income remains undistributed at the close 
of the taxable period, there is hereby imposed a tax equal to 100 
percent of the amount remaining undistributed at such time.

(c) Undistributed income

    For purposes of this section, the term ``undistributed income'' 
means, with respect to any private foundation for any taxable year as of 
any time, the amount by which--
        (1) the distributable amount for such taxable year, exceeds
        (2) the qualifying distributions made before such time out of 
    such distributable amount.

(d) Distributable amount

    For purposes of this section, the term ``distributable amount'' 
means, with respect to any foundation for any taxable year, an amount 
equal to--
        (1) the sum of the minimum investment return plus the amounts 
    described in subsection (f)(2)(C), reduced by
        (2) the sum of the taxes imposed on such private foundation for 
    the taxable year under subtitle A and section 4940.

(e) Minimum investment return

                           (1) In general

        For purposes of subsection (d), the minimum investment return 
    for any private foundation for any taxable year is 5 percent of the 
    excess of--
            (A) the aggregate fair market value of all assets of the 
        foundation other than those which are used (or held for use) 
        directly in carrying out the foundation's exempt purpose, over
            (B) the acquisition indebtedness with respect to such assets 
        (determined under section 514(c)(1) without regard to the 
        taxable year in which the indebtedness was incurred).

                            (2) Valuation

        (A) In general

            For purposes of paragraph (1)(A), the fair market value of 
        securities for which market quotations are readily available 
        shall be determined on a monthly basis. For all other assets, 
        the fair market value shall be determined at such times and in 
        such manner as the Secretary shall by regulations prescribe.

        (B) Reductions in value for blockage or similar factors

            In determining the value of any securities under this 
        paragraph, the fair market value of such securities (determined 
        without regard to any reduction in value) shall not be reduced 
        unless, and only to the extent that, the private foundation 
        establishes that as a result of--
                (i) the size of the block of such securities,
                (ii) the fact that the securities held are securities in 
            a closely held corporation, or
                (iii) the fact that the sale of such securities would 
            result in a forced or distress sale,

        the securities could not be liquidated within a reasonable 
        period of time except at a price less than such fair market 
        value. Any reduction in value allowable under this subparagraph 
        shall not exceed 10 percent of such fair market value.

(f) Adjusted net income

                             (1) Defined

        For purposes of subsection (j), the term ``adjusted net income'' 
    means the excess (if any) of--
            (A) the gross income for the taxable year (determined with 
        the income modifications provided by paragraph (2)), over
            (B) the sum of the deductions (determined with the deduction 
        modifications provided by paragraph (3)) which would be allowed 
        to a corporation subject to the tax imposed by section 11 for 
        the taxable year.

                      (2) Income modifications

        The income modifications referred to in paragraph (1)(A) are as 
    follows:
            (A) section 103 (relating to State and local bonds) shall 
        not apply,
            (B) capital gains and losses from the sale or other 
        disposition of property shall be taken into account only in an 
        amount equal to any net short-term capital gain for the taxable 
        year;
            (C) there shall be taken into account--
                (i) amounts received or accrued as repayments of amounts 
            which were taken into account as a qualifying distribution 
            within the meaning of subsection (g)(1)(A) for any taxable 
            year;
                (ii) notwithstanding subparagraph (B), amounts received 
            or accrued from the sale or other disposition of property to 
            the extent that the acquisition of such property was taken 
            into account as a qualifying distribution (within the 
            meaning of subsection (g)(1)(B)) for any taxable year; and
                (iii) any amount set aside under subsection (g)(2) to 
            the extent it is determined that such amount is not 
            necessary for the purposes for which it was set aside; and

            (D) section 483 (relating to imputed interest) shall not 
        apply in the case of a binding contract made in a taxable year 
        beginning before January 1, 1970.

                     (3) Deduction modifications

        The deduction modifications referred to in paragraph (1)(B) are 
    as follows:
            (A) no deduction shall be allowed other than all the 
        ordinary and necessary expenses paid or incurred for the 
        production or collection of gross income or for the management, 
        conservation, or maintenance of property held for the production 
        of such income and the allowances for depreciation and depletion 
        determined under section 4940(c)(3)(B), and
            (B) section 265 (relating to expenses and interest relating 
        to tax-exempt interest) shall not apply.

                        (4) Transitional rule

        For purposes of paragraph (2)(B), the basis (for purposes of 
    determining gain) of property held by a private foundation on 
    December 31, 1969, and continuously thereafter to the date of its 
    disposition, shall be deemed to be not less than the fair market 
    value of such property on December 31, 1969.

(g) Qualifying distributions defined

                           (1) In general

        For purposes of this section, the term ``qualifying 
    distribution'' means--
            (A) any amount (including that portion of reasonable and 
        necessary administrative expenses) paid to accomplish one or 
        more purposes described in section 170(c)(2)(B), other than any 
        contribution to (i) an organization controlled (directly or 
        indirectly) by the foundation or one or more disqualified 
        persons (as defined in section 4946) with respect to the 
        foundation, except as provided in paragraph (3), or (ii) a 
        private foundation which is not an operating foundation (as 
        defined in subsection (j)(3)), except as provided in paragraph 
        (3), or
            (B) any amount paid to acquire an asset used (or held for 
        use) directly in carrying out one or more purposes described in 
        section 170(c)(2)(B).

                       (2) Certain set-asides

        (A) In general

            For all taxable years beginning on or after January 1, 1975, 
        subject to such terms and conditions as may be prescribed by the 
        Secretary, an amount set aside for a specific project which 
        comes within one or more purposes described in section 
        170(c)(2)(B) may be treated as a qualifying distribution if it 
        meets the requirements of subparagraph (B).

        (B) Requirements

            An amount set aside for a specific project shall meet the 
        requirements of this subparagraph if at the time of the set-
        aside the foundation establishes to the satisfaction of the 
        Secretary that the amount will be paid for the specific project 
        within 5 years, and either--
                (i) at the time of the set-aside the private foundation 
            establishes to the satisfaction of the Secretary that the 
            project is one which can better be accomplished by such set-
            aside than by immediate payment of funds, or
                (ii)(I) the project will not be completed before the end 
            of the taxable year of the foundation in which the set-aside 
            is made,
                (II) the private foundation in each taxable year 
            beginning after December 31, 1975 (or after the end of the 
            fourth taxable year following the year of its creation, 
            whichever is later), distributes amounts, in cash or its 
            equivalent, equal to not less than the distributable amount 
            determined under subsection (d) (without regard to 
            subsection (i)) for purposes described in section 
            170(c)(2)(B) (including but not limited to payments with 
            respect to set-asides which were treated as qualifying 
            distributions in one or more prior years), and
                (III) the private foundation has distributed (including 
            but not limited to payments with respect to set-asides which 
            were treated as qualifying distributions in one or more 
            prior years) during the four taxable years immediately 
            preceding its first taxable year beginning after December 
            31, 1975, or the fifth taxable year following the year of 
            its creation, whichever is later, an aggregate amount, in 
            cash or its equivalent, of not less than the sum of the 
            following: 80 percent of the first preceding taxable year's 
            distributable amount; 60 percent of the second preceding 
            taxable year's distributable amount; 40 percent of the third 
            preceding taxable year's distributable amount; and 20 
            percent of the fourth preceding taxable year's distributable 
            amount.

        (C) Certain failures to distribute

            If, for any taxable year to which clause (ii)(II) of 
        subparagraph (B) applies, the private foundation fails to 
        distribute in cash or its equivalent amounts not less than those 
        required by such clause and--
                (i) the failure to distribute such amounts was not 
            willful and was due to reasonable cause, and
                (ii) the foundation distributes an amount in cash or its 
            equivalent which is not less than the difference between the 
            amounts required to be distributed under clause (ii)(II) of 
            subparagraph (B) and the amounts actually distributed in 
            cash or its equivalent during that taxable year within the 
            correction period (as defined in section 4963(e)),

        such distribution in cash or its equivalent shall be treated for 
        the purposes of this subparagraph as made during such year.

        (D) Reduction in distribution amount

            If, during the taxable years in the adjustment period for 
        which the organization is a private foundation, the foundation 
        distributes amounts in cash or its equivalent which exceed the 
        amount required to be distributed under clause (ii)(II) of 
        subparagraph (B) (including but not limited to payments with 
        respect to set-asides which were treated as qualifying 
        distributions in prior years), then for purposes of this 
        subsection the distribution required under clause (ii)(II) of 
        subparagraph (B) for the taxable year shall be reduced by an 
        amount equal to such excess.

        (E) Adjustment period

            For purposes of subparagraph (D), with respect to any 
        taxable year of a private foundation, the taxable years in the 
        adjustment period are the taxable years (not exceeding 5) 
        beginning after December 31, 1975, and immediately preceding the 
        taxable year.

    In the case of a set-aside which satisfies the requirements of 
    clause (i) of subparagraph (B), for good cause shown, the period for 
    paying the amount set aside may be extended by the Secretary.

    (3) Certain contributions to section 501(c)(3) organizations

        For purposes of this section, the term ``qualifying 
    distribution'' includes a contribution to a section 501(c)(3) 
    organization described in paragraph (1)(A)(i) or (ii) if--
            (A) not later than the close of the first taxable year after 
        its taxable year in which such contribution is received, such 
        organization makes a distribution equal to the amount of such 
        contribution and such distribution is a qualifying distribution 
        (within the meaning of paragraph (1) or (2), without regard to 
        this paragraph) which is treated under subsection (h) as a 
        distribution out of corpus (or would be so treated if such 
        section 501(c)(3) organization were a private foundation which 
        is not an operating foundation), and
            (B) the private foundation making the contribution obtains 
        adequate records or other sufficient evidence from such 
        organization showing that the qualifying distribution described 
        in subparagraph (A) has been made by such organization.

       (4) Limitation on administrative expenses allocable to 
                 making of contributions, gifts, and grants

        (A) In general

            The amount of the grant administrative expenses paid during 
        any taxable year which may be taken into account as qualifying 
        distributions shall not exceed the excess (if any) of--
                (i) .65 percent of the sum of the net assets of the 
            private foundation for such taxable year and the immediately 
            preceding 2 taxable years, over
                (ii) the aggregate amount of grant administrative 
            expenses paid during the 2 preceding taxable years which 
            were taken into account as qualifying distributions.

        (B) Grant administrative expenses

            For purposes of this paragraph, the term ``grant 
        administrative expenses'' means any administrative expenses 
        which are allocable to the making of qualified grants.

        (C) Qualified grants

            For purposes of this paragraph, the term ``qualified grant'' 
        means any contribution, gift, or grant which is a qualifying 
        distribution.

        (D) Net asset

            For purposes of this paragraph, the term ``net assets'' 
        means, with respect to any taxable year, the excess determined 
        under subsection (e)(1) for such taxable year.

        (E) Transitional rule

            In the case of any preceding taxable year which begins 
        before January 1, 1985, the amount of the grant administrative 
        expenses taken into account under subparagraph (A)(ii) shall not 
        exceed .65 percent of the net assets of the private foundation 
        for such taxable year.

        (F) Termination

            This paragraph shall not apply to taxable years beginning 
        after December 31, 1990.

(h) Treatment of qualifying distributions

                           (1) In general

        Except as provided in paragraph (2), any qualifying distribution 
    made during a taxable year shall be treated as made--
            (A) first out of the undistributed income of the immediately 
        preceding taxable year (if the private foundation was subject to 
        the tax imposed by this section for such preceding taxable year) 
        to the extent thereof,
            (B) second out of the undistributed income for the taxable 
        year to the extent thereof, and
            (C) then out of corpus.

    For purposes of this paragraph, distributions shall be taken into 
    account in the order of time in which made.

    (2) Correction of deficient distributions for prior taxable 
                                 years, etc.

        In the case of any qualifying distribution which (under 
    paragraph (1)) is not treated as made out of the undistributed 
    income of the immediately preceding taxable year, the foundation may 
    elect to treat any portion of such distribution as made out of the 
    undistributed income of a designated prior taxable year or out of 
    corpus. The election shall be made by the foundation at such time 
    and in such manner as the Secretary shall by regulations prescribe.

(i) Adjustment of distributable amount where distributions during prior 
        years have exceeded income

                           (1) In general

        If, for the taxable years in the adjustment period for which an 
    organization is a private foundation--
            (A) the aggregate qualifying distributions treated (under 
        subsection (h)) as made out of the undistributed income for such 
        taxable year or as made out of corpus (except to the extent 
        subsection (g)(3) with respect to the recipient private 
        foundation or section 170(b)(1)(E)(ii) applies) during such 
        taxable years, exceed
            (B) the distributable amounts for such taxable years 
        (determined without regard to this subsection),

    then, for purposes of this section (other than subsection (h)), the 
    distributable amount for the taxable year shall be reduced by an 
    amount equal to such excess.

               (2) Taxable years in adjustment period

        For purposes of paragraph (1), with respect to any taxable year 
    of a private foundation the taxable years in the adjustment period 
    are the taxable years (not exceeding 5) beginning after December 31, 
    1969, and immediately preceding the taxable year.

(j) Other definitions

    For purposes of this section--

                         (1) Taxable period

        The term ``taxable period'' means, with respect to the 
    undistributed income for any taxable year, the period beginning with 
    the first day of the taxable year and ending on the earlier of--
            (A) the date of mailing of a notice of deficiency with 
        respect to the tax imposed by subsection (a) under section 6212, 
        or
            (B) the date on which the tax imposed by subsection (a) is 
        assessed.

                  (2) Allowable distribution period

        The term ``allowable distribution period'' means, with respect 
    to any private foundation, the period beginning with the first day 
    of the first taxable year following the taxable year in which the 
    incorrect valuation (described in subsection (a)(2)) occurred and 
    ending 90 days after the date of mailing of a notice of deficiency 
    (with respect to the tax imposed by subsection (a)) under section 
    6212 extended by--
            (A) any period in which a deficiency cannot be assessed 
        under section 6213(a), and
            (B) any other period which the Secretary determines is 
        reasonable and necessary to permit a distribution of 
        undistributed income under this section.

                      (3) Operating foundation

        For purposes of this section, the term ``operating foundation'' 
    means any organization--
            (A) which makes qualifying distributions (within the meaning 
        of paragraph (1) or (2) of subsection (g)) directly for the 
        active conduct of the activities constituting the purpose or 
        function for which it is organized and operated equal to 
        substantially all of the lesser of--
                (i) its adjusted net income (as defined in subsection 
            (f)), or
                (ii) its minimum investment return; and

            (B)(i) substantially more than half of the assets of which 
        are devoted directly to such activities or to functionally 
        related businesses (as defined in paragraph (4)), or to both, or 
        are stock of a corporation which is controlled by the foundation 
        and substantially all of the assets of which are so devoted.
            (ii) which normally makes qualifying distributions (within 
        the meaning of paragraph (1) or (2) of subsection (g)) directly 
        for the active conduct of the activities constituting the 
        purpose or function for which it is organized and operated in an 
        amount not less than two-thirds of its minimum investment return 
        (as defined in subsection (e)), or
            (iii) substantially all of the support (other than gross 
        investment income as defined in section 509(e)) of which is 
        normally received from the general public and from 5 or more 
        exempt organizations which are not described in section 
        4946(a)(1)(H) with respect to each other or the recipient 
        foundation; not more than 25 percent of the support (other than 
        gross investment income) of which is normally received from any 
        one such exempt organization; and not more than half of the 
        support of which is normally received from gross investment 
        income.

    Notwithstanding the provisions of subparagraph (A), if the 
    qualifying distributions (within the meaning of paragraph (1) or (2) 
    of subsection (g)) of an organization for the taxable year exceed 
    the minimum investment return for the taxable year, clause (ii) of 
    subparagraph (A) shall not apply unless substantially all of such 
    qualifying distributions are made directly for the active conduct of 
    the activities constituting the purpose or function for which it is 
    organized and operated.

                  (4) Functionally related business

        The term ``functionally related business'' means--
            (A) a trade or business which is not an unrelated trade or 
        business (as defined in section 513), or
            (B) an activity which is carried on within a larger 
        aggregate of similar activities or within a larger complex of 
        other endeavors which is related (aside from the need of the 
        organization for income or funds or the use it makes of the 
        profits derived) to the exempt purposes of the organization.

                 (5) Certain elderly care facilities

        For purposes of this section (but no other provisions of this 
    title), the term ``operating foundation'' includes any organization 
    which, on May 26, 1969, and at all times thereafter before the close 
    of the taxable year, operated and maintained as its principal 
    functional purpose facilities for the long-term care, comfort, 
    maintenance, or education of permanently and totally disabled 
    persons, elderly persons, needy widows, or children but only if such 
    organization meets the requirements of paragraph (3)(B)(ii).

(Added Pub. L. 91-172, title I, Sec. 101(b), Dec. 30, 1969, 83 Stat. 
502; amended Pub. L. 94-455, title XIII, Secs. 1302(a), 1303(a), 
1310(a), title XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1713, 
1715, 1729, 1834; Pub. L. 95-600, title V, Sec. 522(a), Nov. 6, 1978, 92 
Stat. 2885; Pub. L. 96-596, Sec. 2(a)(1)(C), (2)(B), (3)(B), (4)(A), 
Dec. 24, 1980, 94 Stat. 3469-3472; Pub. L. 97-34, title VIII, 
Sec. 823(a), Aug. 13, 1981, 95 Stat. 351; Pub. L. 97-448, title I, 
Sec. 108(b), Jan. 12, 1983, 96 Stat. 2391; Pub. L. 98-369, div. A, title 
III, Secs. 304(a), (b), 305(b)(4), 314(a)(1), (2), July 18, 1984, 98 
Stat. 782-784, 787; Pub. L. 99-514, title XIII, Sec. 1301(j)(6), Oct. 
22, 1986, 100 Stat. 2658.)


                               Amendments

    1986--Subsec. (f)(2)(A). Pub. L. 99-514 substituted ``(relating to 
State and local bonds)'' for ``(relating to interest on certain 
governmental obligations)''.
    1984--Subsec. (a)(2)(B). Pub. L. 98-369, Sec. 314(a)(1), substituted 
``subsection (j)(2)'' for ``subsection (j)(4)''.
    Subsec. (d)(1). Pub. L. 98-369, Sec. 304(b), substituted ``the sum 
of the minimum investment return plus the amounts described in 
subsection (f)(2)(C), reduced by'' for ``the minimum investment return 
reduced by''.
    Subsec. (f)(1). Pub. L. 98-369, Sec. 314(a)(2), substituted 
``subsection (j)'' for ``subsection (d)''.
    Subsec. (g)(1)(A). Pub. L. 98-369, Sec. 304(a)(2), substituted 
``including that portion of reasonable and necessary administrative 
expenses'' for ``including administrative expenses''.
    Subsec. (g)(2)(C)(ii). Pub. L. 98-369, Sec. 305(b)(4), substituted 
``section 4963(e)'' for ``section 4962(e)''.
    Subsec. (g)(4). Pub. L. 98-369, Sec. 304(a)(1), added par. (4).
    1983--Subsec. (j)(3)(A)(i). Pub. L. 97-448 substituted ``or'' for 
``and'' at the end.
    1981--Subsec. (d)(1). Pub. L. 97-34, Sec. 823(a)(1), struck out ``or 
the adjusted net income (whichever is higher)'' after ``return''.
    Subsec. (j)(3). Pub. L. 97-34, Sec. 823(a)(2), (3), inserted in 
subpar. (A) ``the lesser of'' after ``substantially all of'', designated 
existing provisions as cl. (i), added cl. (ii), and inserted provision 
respecting applicability of subpar. (A)(ii).
    1980--Subsec. (b). Pub. L. 96-596, Sec. 2(a)(1)(C), substituted 
``taxable period'' for ``correction period''.
    Subsec. (g)(2)(C)(ii). Pub. L. 96-596, Sec. 2(a)(4)(A), substituted 
``the correction period (as defined in section 4962(e))'' for ``the 
initial correction period provided in subsection (j)(2)''.
    Subsec. (j)(1). Pub. L. 96-596, Sec. 2(a)(2)(B), substituted 
provision ending the taxable period on the earlier of the date of 
mailing of a notice of deficiency with respect to the tax imposed by 
subsec. (a) of this section under section 6212 of this title or the date 
on which the tax imposed by subsec. (a) of this section is assessed for 
provision ending the taxable period on the date of mailing the notice of 
deficiency with respect to a tax imposed by subsec. (a) of this section 
under section 6212 of this title.
    Subsec. (j)(2). Pub. L. 96-596, Sec. 2(a)(3)(B)(i), (iii), 
redesignated par. (4) as (2) and struck out former par. (2), which 
defined correction period, with respect to any private foundation for 
any taxable year, as the period beginning with the first day of the 
taxable year and ending 90 days after the date of mailing a notice of 
deficiency with respect to the tax imposed by subsec. (b) of this 
section under section 6212 of this title, extended by any period in 
which a deficiency cannot be assessed under section 6213(a) of this 
title and any other period which the Secretary determines is reasonable 
and necessary to permit a distribution of undistributed income.
    Subsec. (j)(3)(B)(i). Pub. L. 96-596, Sec. 2(a)(3)(B)(ii), 
substituted ``paragraph (4)'' for ``paragraph (5)''.
    Subsec. (j)(4) to (6). Pub. L. 96-596, Sec. 2(a)(3)(B)(iii), (iv), 
redesignated pars. (5) and (6) as (4) and (5), respectively.
    1978--Subsec. (j)(6). Pub. L. 95-600 added par. (6).
    1976--Subsec. (a)(2)(C). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck 
out ``or his delegate'' after ``Secretary''.
    Subsec. (e). Pub. L. 94-455, Sec. 1303(a), among other changes, 
substituted provisions establishing a fixed percentage rate to be used 
in computing the minimum investment return for any private foundation 
for provisions establishing a variable applicable percentage rate of 7 
percent in 1970 and an applicable rate to be determined by the Secretary 
after 1970, for use in computing the minimum investment return for any 
private foundation and inserted provisions relating to reduction in 
value for blockage or similar factors.
    Subsec. (f)(2)(D). Pub. L. 94-455, Sec. 1310(a), added subpar. (D).
    Subsec. (g)(2). Pub. L. 94-455, Sec. 1302(a), among other changes, 
inserted reference to all taxable years beginning on or after Jan. 1, 
1975, requirement that the project will not be completed before the end 
of the taxable year of the foundation in which the set-aside is made, 
and subpars. (C) to (E).
    Subsecs. (h)(2), (j)(2)(B). Pub. L. 94-455, Sec. 1906(b)(13)(A), 
struck out ``or his delegate'' after ``Secretary''.


                    Effective Date of 1986 Amendment

    Amendment by Pub. L. 99-514 applicable to bonds issued after Aug. 
15, 1986, except as otherwise provided, see sections 1311 to 1318 of 
Pub. L. 99-514, set out as an Effective Date; Transitional Rules note 
under section 141 of this title.


                    Effective Date of 1984 Amendment

    Section 304(c) of Pub. L. 98-369 provided that: ``The amendments 
made by this section [amending this section] shall apply to taxable 
years beginning after December 31, 1984.''
    Amendment by section 305(b)(4) of Pub. L. 98-369 applicable to 
taxable events occurring after Dec. 31, 1984, see section 305(c) of Pub. 
L. 98-369, set out as an Effective Date note under section 4962 of this 
title.
    Section 314(a)(4) of Pub. L. 98-369 provided that: ``The amendments 
made by this subsection [amending this section and section 6501 of this 
title] shall take effect on the date of the enactment of this Act [July 
18, 1984].''.


                    Effective Date of 1983 Amendment

    Amendment by Pub. L. 97-448 effective, except as otherwise provided, 
as if it had been included in the provision of the Economic Recovery Tax 
Act of 1981, Pub. L. 97-34, to which such amendment relates, see section 
109 of Pub. L. 97-448, set out as a note under section 1 of this title.


                    Effective Date of 1981 Amendment

    Section 823(b) of Pub. L. 97-34 provided that: ``The amendments made 
by this section [amending this section] shall apply to taxable years 
beginning after December 31, 1981.''


                    Effective Date of 1980 Amendment

    For effective date of amendment by Pub. L. 96-596 with respect to 
any first tier tax and to any second tier tax, see section 2(d) of Pub. 
L. 96-596, set out as an Effective Date note under section 4961 of this 
title.


                    Effective Date of 1978 Amendment

    Section 522(b) of Pub. L. 95-600 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply to taxable years 
beginning after December 31, 1969.''


                    Effective Date of 1976 Amendment

    Section 1302(c) of Pub. L. 94-455 provided that: ``The amendments 
made by this section [amending this section and section 6501 of this 
title] shall apply to taxable years beginning after December 31, 1974.''
    Section 1303(b) of Pub. L. 94-455 provided that: ``The amendment 
made by this section [amending this section] applies to taxable years 
beginning after December 31, 1975.''
    Section 1310(b) of Pub. L. 94-455 provided that: ``The amendments 
made by this section [amending this section] shall apply to taxable 
years ending after the date of the enactment of this Act [Oct. 4, 
1976].''


                            Savings Provision

    Applicability of section to organizations organized before May 27, 
1969, see section 101(l)(3) of Pub. L. 91-172, set out as a note under 
section 4940 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 150, 170, 508, 2055, 2503, 
4940, 4943, 4948, 4963, 6110, 6213, 6501, 7422, 7428 of this title.
