Page:United States Statutes at Large Volume 68A.djvu/209

 CH. 1—NORMAL TAXES AND SURTAXES

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PART II—TAXATION OF BUSINESS INCOME OF CERTAIN EXEMPT ORGANIZATIONS Sec. 511. Imposition of tax on unrelated business income of charitable organizations, etc. Sec. 512. Unrelated business taxable income. Sec. 513. Unrelated trade or business. Sec. 514. Business leases. Sec. 515. Taxes of foreign countries and possessions of the United States. SEC. 511. IMPOSITION OF TAX ON UNRELATED BUSINESS INCOME OF CHARITABLE, ETC., ORGANIZATIONS. (a) CHARITABLE, E T C., ORGANIZATIONS TAXABLE AT CORPORATION RATES.— (1) IMPOSITION OF TAX.—There is hereby imposed for each tax-

able year on the unrelated business taxable income (as defined in section 512) of every organization described in paragraph (2) a normal tax and a surtax computed as provided in section 11. In making such computation for purposes of this section, the term "taxable income" as used in section 11 shall be read as "unrelated business taxable income". (2) ORGANIZATIONS SUBJECT TO TAX.— (A) ORGANIZATIONS DESCRIBED IN SECTION 501 (C)(2),

(3),

(5), AND (6), AND SECTION 401 (a).—The taxes imposed by paragraph (1) shall apply in the case of any organization (other than a church, a convention or association of churches, or a trust described in subsection (b)) which is exempt, except as provided in this part, from taxation under this subtitle by reason of section 401 (a) or of paragraph (3), (5), or (6) of section 501(c). Such taxes shall also apply in the case of a corporation described in section 501(c)(2) if the income is payable to an organization which itself is subject to the taxes imposed by paragraph (1) or to a church or to a convention or association of churches. (B) STATE COLLEGES AND UNIVERSITIES.—The taxes imposed by paragraph (1) shall apply in the case of any college or university which is an agency or instrumentality of any government or any political subdivision thereof, or which is owned or operated by a government or any political subdivision thereof, or by any agency or instrumentality of one or more governments or political subdivisions. Such taxes shall also apply in the case of any corporation wholly owned by one or more such colleges or universities. (b) T A X ON CHARITABLE, ETC.. T R U S T S. — (1) IMPOSITION OF TAX.—There is hereby imposed for

each taxable year on the unrelated business taxable income of every trust described in paragraph (2) a tax computed as provided in section 1. In making such computation for purposes of this section, the term "taxable income" as used in section 1 shall be read as "unrelated business taxable income" as defined in section 512. (2) CHARITABLE, ETC., TRUSTS SUBJECT TO TAX.—The tax

im-

posed by paragraph (1) shall apply in the case of any trust which is exempt, except as provided in this part, from taxation under this subtitle by reason of section 501(c)(3) or section 401(a) and which, if it were not for such exemption, would be subject to subchapter J § 511(b)(2) 49012°—54

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