Page:United States Statutes at Large Volume 83.djvu/531

 83 STAT. ]

PUBLIC LAW 91-172-DEC. 30, 1969

503

during the allowable distribution period (as defined in subsection (j)(4)), " (C) the foundation notifies the Secretary or his delegate 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) ADDiTioisrAL 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 correction period, there is hereby imposed a tax equal to 100 percent of the amount remaining undistributed ajt such time. "(c) UNDISTRIBUTED INCOME.—For purposes of this section, the Definition. 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 A M O U N T. — For purposes of this section, the Definition. term 'distributable amount' means, with respect to any foundation for any taxable year, an amount equal to— " (1) the minimum investment return or the adjusted net income (whichever is higher), reduced by "(2) the sum of the taxes imposed on such private foundation for the taxable year under subtitle A and section 4940. ^^ ^^^ ris63. " (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 the amount determined by multiplying— " (A) the excess of (i) the aggregate fair market value of all assets of the foundation other than those being used (or held for use) directly in carrying out the foundation's exempt purpose over (ii) the acquisition indebtedness with respect to such assets (determined under section 514(c)(1), but without regard to the taxable year in which the indebtedness was incurred), by " (B) the applicable percentage for such year, determined under paragraph (3). "(2) VALUATION.—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 or his delegate shall by regulations prescribe. " (3) APPLICABLE PERCENTAGE.—For purposes of

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paragraph

(1)(B), the applicable percentage for taxable years beginning in 1970 is 6 percent. The applicable percentage for any taxable year beginning after 1970 shall be determined and published by the Secretary or his delegate and shall bear a relationship to 6 percent which the Secretary or his delegate determines to be comparable to the relationship which the money rates and investment yields for the calendar year immediately preceding the beginning of the taxable year bear to the money rates and investment yields for the calendar year 1969. " (4) TRANSITIONAL RULES.—

"For special rules applicable to organizations created before May 27, 1969, see section 101(1)(3) of the Tax Reform Act of 1969.

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