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26 USC 271.

PUBLIC LAW 93-625-JAN. 3, 1975

[88 STAH

" (e) OTHER DEFINITIONS.—For purposes of this section— "(1) POLITICAL ORGANIZATION.—The term 'political organization' means a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. "(2) EXEMPT FUNCTION.—The term 'exempt function' means the function of influencing or'attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local public office or office in a political organization, or the election of Presidential or Vice-Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. "(3) CONTRIBUTIONS.—The term 'contributions' has the meaning given to such term by section 271(b)(2). "(4) EXPENDITURES.—The term 'expenditures' has the meaning given to such term by section 271(b)(3). "(f) EXEMPT ORGANIZATION W H I C H I S NOT POLITICAL ORGANIZATION MUST INCLUDE CERTAIN AMOUNTS IN GROSS INCOME.—

26 USC 501.

"Net invest-

inc ome.

26 USC 511.

"(1) IN GENERAL.—If an organization described in section 501(c) which is exempt from tax under section 501(a) expends any amount during the taxable year directly (or through another organization) for an exempt function (within the meaning of subsection (e)(2)), then, notwithstanding any other provision of law, there shall be included in the gross income of such organization for the taxable year, and shall be subject to tax under subsection (b) as if it constituted political organization taxable income, an amount equal to the lesser of— " (A) the net investment income of such organization for the taxable year, or " (B) the aggregate amount so expended during the taxable year for such an exempt function. " ^ 2) N E T INVESTMENT INCOME.

tion, the tcmi 'uct investment income' means the excess of— " (A) the gross amount of income from interest, dividends, rents, and royalties, plus the excess (if any) of gains from the sale or exchange of assets over the losses from the sale or exchange of assets, over " (B) the deductions allowed by this chapter which are directly connected with the production of the income referred to in subparagraph (A). For purposes of the preceding sentence, there shall not be taken into account items taken into account for purposes of the tax imposed by section 511 (relating to tax on unrelated business income). "(3)

26 USC 501.

For purpOSCS of t h i s SubsCC-

CERTAIN SEPARATE SEGREGATED FUNDS.—For purposes of

this subsection and subsection (e)(1), a separate segregated fund (within the meaning of section 610 of title 18 or of any similar State statute, or within the meaning of any State statute which permits the segregation of dues moneys for exempt functions (within the meaning of subsection (e)(2))) which is maintained by an organization described in section 501(c) which is exempt from tax under section 501(a) shall be treated as a separate organization. " (g) TREATMENT or NEWSLETTER F U N D S. —

"(1) IN GENERAL.—For purposes of this section, a fund established and maintained by an individual who holds, has been

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