Page:United States Statutes at Large Volume 83.djvu/567

 83 STAT. ]

PUBLIC LAW 91-172-DEC. 30, 1969

539

" (i) if more than 50 percent of the total rent received or accrued under the lease is attributable to personal property described in subparagraph (A) (ii), or " (ii) if the determination of the amount of such rent depends in whole or in part on the income or profits derived by any person from the property leased (other than an amount based on a fixed percentage or percentages of receipts or sales). " (C) There shall be excluded all deductions directly connected with rents excluded under subparagraph (A). "(4) Notwithstanding paragraph (1), (2), (3), or (5), in the case of debt-financed property (as defined m section 514) there Post, p. 543. shall be included, as an item of gross income derived from an unrelated trade or business, the amount ascertained under section 514(a)(1), and there shall be allowed, as a deduction, the amount ascertained under section 514(a)(2)." (B) L I M I T ON SPECIFIC DEDUCTION.—Section 512(b) (12) esAstat. 171. (relating to allowance of specific deduction) is amended to read as follows: " (12) Except for purposes of computing the net operating loss under section 172 and paragraph (6), there shall be allowed a ^°«^ P- 619. specific deduction of $1,000. I n the case of a diocese, province of a religious order, or a convention or association of churches, there shall also be allowed, with respect to each parish, individual church, district, or other local unit, a specific deduction equal to the lower of— " (A) $1,000,or " (B) the gross income derived from any unrelated trade or business regularly carried on by such local unit." (C) SPECIAL RULES FOR CERTAIN ORGANIZATIONS.—Section

512(b) (relating to modifications in determining unrelated business taxable income) is further amended by adding at the end thereof the following: "(15) Notwithstanding paragraphs (1), (2), or (3), amounts of interest, annuities, royalties, and rents derived from any organization (in this paragraph called the 'controlled organization') of which the organization deriving such amounts (in this paragraph called the 'controlling organization') has control (as defined in section 368(c)) shall be included as an item of gross income (whether or not the activity from which such amounts are derived represents a trade or business or is regularly carried on) in an amount which bears the same ratio as— " (A)(i) in the case of a controlled organization which is not exempt from taxation under section 501(a), the excess of the amount of taxable income of the controlled organization over the amount of such organization's taxable income which if derived directly by the controlling organization would not be unrelated business taxable income, or "(ii) in the case of a controlled organization which is exempt from taxation under section 501(a), the amount of unrelated business taxable income of the controlled organization, bears to " (B) the taxable income of the controlled organization (determined in the case of a controlled organization to which subparagraph (A) (ii) applies as if it were not an organization exempt from taxation under section 501(a)), but not less than the amount determined in clause (i) or (ii), as the case may be, of subparagraph (A),

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