Page:United States Statutes at Large Volume 83.djvu/572

 544

PUBLIC LAW 91-172-DEC. 30, 1969

68A Stat. 170. 26 USC 512.

Ante,

p. 541.

[83 STAT.

" (B) except in the case of income excluded under section 512(b)(5), any property to the extent that the income from such property is taken into account in computing the gross income of any unrelated trade or business; " (C) any property to the extent that the income from such property is excluded by reason of the provisions of paragraph (7), (8), or (9) of section 512(b) m computing the gross income of any unrelated trade or business; or " (D) any property to the extent that it is used in any trade or business described in paragraph (1), (2), or (3) of section 513(a). For purposes of subparagraph (A), substantially all the use of a property shall be considered to be substantially related to the exercise or performance by an organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501 if such property is real property subject to a lease to a medical clinic entered into primarily for purposes which are substantially related (aside from the need of such organization for income or funds or the use it makes of the rents derived) to the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501. " (2) SPECIAL RULE FOR RELATED USES,—For purposes of applying

paragraphs (1)(A), (C), and (D), the use of any property by an exempt organization which is related to an organization shall be treated as use by such organization. " (3) SPECIAL RULES WHEN LAND IS ACQUIRED FOR EXEMPT USE W I T H I N 10 Y E A R S.

" (A) NEIGHBORHOOD LAND.—If an organization acquires

real property for the principal purpose of usin^ the land (commencing within 10 years of the time of acquisition) in the manner described in paragraph (1)(A) and at the time of acquisition the property is in the neignborhood of other property owned by the organization which is used in such manner, the real property acquired for such future use shall not be treated as debt-financed property so long as the organization does not abandon its intent to so use the land within the 10-year period. The preceding sentence shall not apply for any period after the expiration of the 10-year period, and shall apply after the first 5 years of the 10-year period only if the organization establishes to the satisfaction of the Secretary or his delegate that it is reasonably certain that the land will be used in the described manner before the expiration of the 10year period. " (B) OTHER CASES.—If the first sentence of subparagraph

(A) is inapplicable only because— " (i) the acquired land is not in the neighborhood referred to in subparagraph (A), or "(ii) the organization (for the period after the first 5 years of the 10-year period) is unable to establish to the satisfaction of the Secretary or his delegate that it is reasonably certain that the land will be used in the manner described in paragraph (1)(A) before the expiration of the 10-year period, but the land is converted to such use by the organization within the 10-year period, the real property (subject to the provisions of subparagraph (D)) shall not be treated as debtfinanced property for any period before such conversion. For

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