Page:United States Statutes at Large Volume 83.djvu/587

 83 STAT. ]

PUBLIC LAW 91-172-DEC. 30, 1%9

559

«(2) AMOUNTS PERMANENTLY SET ASIDE.—In the case of an estate, and in the case of a trust (other than a trust meeting the specifications of subpart B) required by the terms of its governing instrument to set aside amounts which was— " (A) created on or before October 9, 1969, if— " (i) an irrevocable remainder interest is transferred to or for the use of an organization described in section 170(c),or Anfe, p. 553. "(ii) the grantor is at all times after October 9, 1969, under a mental disability to change the terms of the trust; or " (B) established by a will executed on or before October 9, 1969, if— " (i) the testator dies before October 9, 1972, without having republished the will after October 9, 1969, by codicil or otherwise, "(ii) the testator at no time after October 9, 1969, had the right to change the portions of the will which pertain to the trust, or " (iii) the will is not republished by codicil or otherwise before October 9, 1972, and the testator is on such date and at all times thereafter under a mental disability to republish the will by codicil or otherwise, there shall also be allowed as a deduction in computing its taxable income any amount of the gross income, without limitation, which pursuant to the terms of the governing instrument is, during the taxable year, permanently set aside for a purpose specified in section 170(c), or is to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, or for the establishment, acquisition, maintenance, or operation of a public cemetery not operated for profit. I n the case of a trust, the preceding sentence shall apply only to gross income earned with respect to amounts transferred to the trust before October 9, 1969, or transferred under a will to which subparagraph (B) applies. "(3) POOLED INCOME FUNDS.—In the case of a pooled income fund (as defined in paragraph (5)), there shall also be allowed as a deduction in computing its taxable income any amount of the gross income attributable to gain from the sale of a capital asset held for more than 6 months, without limitation, which pursuant to the terms of the governing instrument is, during the taxable year, permanently set aside for a purpose specified in section 170(c). "(4) ADJUSTMENTS.—To the extent that the amount otherwise allowable as a deduction under this subsection consists of gain from the sale or exchange of capital assets held for more than 6 months, proper adjustment shall be made for any deduction allowable to the estate or trust under section 1202 (relating to deduction 26^s*c\'202°' for excess of capital gains over capital losses). In the case of a trust, the deduction allowed by this subsection shall be subject to section 681 (relating to unrelated business income). 52^"'^' ^^* ^'*^' "(5)

DEFINITION OF POOLED INCX)ME FUND.—For purposes of

paragraph (3), a pooled income fund is a trust— " (A) to which each donor transfers property, contributing an irrevocable remainder interest in such property to or for the use of an organization described in section 170(b)(1)(A) (other than in clauses (vii) or (viii)), and retaining an income interest for the life of one or more beneficiaries (living at the time of such transfer),

,,. „

.

�