Page:United States Statutes at Large Volume 83.djvu/530

 502

68A Stat. 770. 26 USC 6212.

26 USC 6213.

PUBLIC LAW 91-172-DEC. 30, 1969

[83 STAT.

"(e) OTHER DEFINITIONS.—For purposes of this section— "(1) TAXABLE PERIOD.—The term 'taxable period' means, with respect to any act of self-dealing, the period beginning with the date on which the act of self-dealing occurs and ending on whichever of the following is the earlier: (A) the date of mailing of a notice of deficiency with respect to the tax imposed by subsection (a)(1) under section 6212, or (B) the date on which correction of the act of self-dealing is completed. "(2) AMOUNT INVOLVED.—The term 'amount involved' means, with respect to any act of self-dealing, the greater of the amount of money and the fair market value of the other property given or the amount of money and the fair market value of the other property received; except that, in the case of services described in subsection (d)(2)(E), the amount involved shall be only the excess compensation. For purposes of the preceding sentence, the fair market value— " (A) in the case of the taxes imposed by subsection (a), shall be determined as of the date on which the act of selfdealing occurs; and " (B) in the case of the taxes imposed by subsection (b), shall be the highest fair market value during the correction period. "(3) CORRECTION.—The terms 'correction' and 'correct' mean, with respect to any act of self-dealing, undoing the transaction to the extent possible, but in any case placing the private foundation in a financial position not worse than that in which it would be if the disqualified person were dealing under the highest fiduciary standards. " (4) CORRECTION PERIOD.—The term 'correction period' means, with respect to any act of self-dealing, the period beginning with the date on which the act of self-dealing occurs and ending 90 days after the date of mailing of a notice of deficiency with respect to the tax imposed by subsection (b)(1) 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 or his delegate determines is reasonable and necessary to bring about correction of the act of self-dealing. "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)), o r "(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

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