
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 107-16 Section 542(e)(4)]
[CITE: 26USC4947]

 
                     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. 4947. Application of taxes to certain nonexempt trusts


(a) Application of tax

                        (1) Charitable trusts

        For purposes of part II of subchapter F of chapter 1 (other than 
    section 508(a), (b), and (c)) and for purposes of this chapter, a 
    trust which is not exempt from taxation under section 501(a), all of 
    the unexpired interests in which are devoted to one or more of the 
    purposes described in section 170(c)(2)(B), and for which a 
    deduction was allowed under section 170, 545(b)(2), 556(b)(2), 
    642(c), 2055, 2106(a)(2), or 2522 (or the corresponding provisions 
    of prior law), shall be treated as an organization described in 
    section 501(c)(3). For purposes of section 509(a)(3)(A), such a 
    trust shall be treated as if organized on the day on which it first 
    becomes subject to this paragraph.

                      (2) Split-interest trusts

        In the case of a trust which is not exempt from tax under 
    section 501(a), not all of the unexpired interests in which are 
    devoted to one or more of the purposes described in section 
    170(c)(2)(B), and which has amounts in trust for which a deduction 
    was allowed under section 170, 545(b)(2), 556(b)(2), 642(c), 2055, 
    2106(a)(2), or 2522, section 507 (relating to termination of private 
    foundation status), section 508(e) (relating to governing 
    instruments) to the extent applicable to a trust described in this 
    paragraph, section 4941 (relating to taxes on self-dealing), section 
    4943 (relating to taxes on excess business holdings) except as 
    provided in subsection (b)(3), section 4944 (relating to investments 
    which jeopardize charitable purpose) except as provided in 
    subsection (b)(3), and section 4945 (relating to taxes on taxable 
    expenditures) shall apply as if such trust were a private 
    foundation. This paragraph shall not apply with respect to--
            (A) any amounts payable under the terms of such trust to 
        income beneficiaries, unless a deduction was allowed under 
        section 170(f)(2)(B), 2055(e)(2)(B), or 2522(c)(2)(B),
            (B) any amounts in trust other than amounts for which a 
        deduction was allowed under section 170, 545(b)(2), 556(b)(2), 
        642(c), 2055, 2106(a)(2), or 2522, if such other amounts are 
        segregated from amounts for which no deduction was allowable, or
            (C) any amounts transferred in trust before May 27, 1969.

                       (3) Segregated amounts

        For purposes of paragraph (2)(B), a trust with respect to which 
    amounts are segregated shall separately account for the various 
    income, deduction, and other items properly attributable to each of 
    such segregated amounts.

(b) Special rules

                           (1) Regulations

        The Secretary shall prescribe such regulations as may be 
    necessary to carry out the purposes of this section.

                   (2) Limit to segregated amounts

        If any amounts in the trust are segregated within the meaning of 
    subsection (a)(2)(B) of this section, the value of the net assets 
    for purposes of subsections (c)(2) and (g) of section 507 shall be 
    limited to such segregated amounts.

                     (3) Sections 4943 and 4944

        Sections 4943 and 4944 shall not apply to a trust which is 
    described in subsection (a)(2) if--
            (A) all the income interest (and none of the remainder 
        interest) of such trust is devoted solely to one or more of the 
        purposes described in section 170(c)(2)(B), and all amounts in 
        such trust for which a deduction was allowed under section 170, 
        545(b)(2), 556(b)(2), 642(c), 2055, 2106(a)(2), or 2522 have an 
        aggregate value not more than 60 percent of the aggregate fair 
        market value of all amounts in such trusts, or
            (B) a deduction was allowed under section 170, 545(b)(2), 
        556(b)(2), 642(c), 2055, 2106(a)(2), or 2522 for amounts payable 
        under the terms of such trust to every remainder beneficiary but 
        not to any income beneficiary.

                           (4) Section 507

        The provisions of section 507(a) shall not apply to a trust 
    which is described in subsection (a)(2) by reason of a distribution 
    of qualified employer securities (as defined in section 664(g)(4)) 
    to an employee stock ownership plan (as defined in section 
    4975(e)(7)) in a qualified gratuitous transfer (as defined by 
    section 664(g)).

(Added Pub. L. 91-172, title I, Sec. 101(b), Dec. 30, 1969, 83 Stat. 
517; amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct. 4, 
1976, 90 Stat. 1834; Pub. L. 105-34, title XV, Sec. 1530(c)(9), Aug. 5, 
1997, 111 Stat. 1079.)


                               Amendments

    1997--Subsec. (b)(4). Pub. L. 105-34 added par. (4).
    1976--Subsec. (b)(1). Pub. L. 94-455 struck out ``or his delegate'' 
after ``Secretary''.


                    Effective Date of 1997 Amendment

    Amendment by Pub. L. 105-34 applicable to transfers made by trusts 
to, or for the use of, an employee stock ownership plan after Aug. 5, 
1997, see section 1530(d) of Pub. L. 105-34, set out as a note under 
section 401 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 508, 644, 2055, 4943, 6033, 
6034, 6049 of this title.
