Page:United States Statutes at Large Volume 90 Part 2.djvu/1229

 PUBLIC LAW 94-568—OCT. 20, 1976

90 STAT. 2697

Public Law 94-568 94th Congress An Act To amend the Internal Revenue Code of 1954 with respect to the tax treatment of social clubs and certain other membership organizations, to provide for a study of tax incentives for recycling, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) section 501(c)(7) of the I n t e r n a l Revenue Code of 1954 (relating to exempt organizations) is amended to read as follows: " (7) Clubs organized for pleasure, recreation, and other nonprofitable purposes, substantially all of the activities of which are for such purposes and no part of the net earnings of which inures to the benefit of any private shareholder." (b) Section 5 1 2 (a)(3)(A) of such Code (relating to unrelated business taxable income) is amended by adding at the end thereof the following new sentence: " For purposes of the preceding sentence, the deductions provided by sections 243,244, and 245 (relating to dividends received by corporations) shall be treated as not directly connected with the production of gross income." (c) Section 277(a) of such Code (relating to deductions incurred by certain membership organizations in transactions with members) is amended by adding at the end thereof the following new sentence: " The deductions provided by sections 243, 244, and 245 (relating to dividends received by corporations) shall not be allowed to any orga* nization to which this section applies for the taxable year." (d) The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. SEC. 2. (a) Section 501 of the I n t e r n a l Revenue Code of 1954 (relating to exemption from tax on corporations, certain trusts, etc.) is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection: "(g)

Oct. 20, 1976 [H.R. 1144]

Taxes. Exempt organizations. 26 USC 501.

26 USC 512, 26 USC 243., 244, 245. 26 USC 277.

26 USC 501 note. 26 USC 501,

PROHIBITION OF DISCRIMINATION BY CERTAIN SOCIAL C L U B S. —

Notwithstanding subsection (a), an organization which is described in subsection (c)(7) shall not be exempt from taxation under subsection (a) for any taxable year if, at any time during such taxable year, the charter, bylaws, or other governing instrument, of such organization or any written policy statement of such organization contains a provision which provides for discrimination against any person on the basis of race, color, or religion.". (b) The amendment made by subsection (a) shall apply to taxable Effective date. 26 USC 501 note. years begining after the date of the enactment of this Act. SEC. 3. (a) Paragraph (2) of section 301(g) of the T a x Reform 26 USC 56 note. Act of 1976 (relating to effective date for minimum tax provisions) is Ante, p. 1549. amended to read as follows: "(2)

T A X CARRYOVER.

" (A) IN GENERAL.—Except as provided in subparagraph (B), the amount of any tax carryover under section 56(c) of the I n t e r n a l Revenue Code of 1954 from a taxable year 26 USC 56. beginning before January 1, 1976, shall not be allowed as a tax carryover for any taxable year beginning after December 31, 1975.

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