Page:United States Statutes at Large Volume 90 Part 2.djvu/245

 PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1713

TITLE XIII—TAX EXEMPT ORGANIZATIONS SEC. 1301. DISPOSITION OF PRIVATE FOUNDATION PROPERTY UNDER TRANSITION RULES OF TAX REFORM ACT OF 1969. (a) IN GENERAL.—Paragraph (2) of section 101(1) of the Tax Reform Act of 1969 (relating to private foundations savings provisions) is amended— (1) by striking out "and" at the end of subparagraph (D); (2) by striking out the period at the end of subparagraph (E) and inserting in lieu thereof "; and"; and (3) by adding at the end thereof the following new subparagraph: " (F) the sale, exchange, or other disposition (other than by lease) of property which is owned by a private foundation to a disqualified person if— "(i) such foundation is leasing substantially all of such property under a lease to which subparagraph (C) applies. " (ii) the disposition to such disqualified person occurs before January 1, 1978, and "(iii) such foundation receives in return for the disposition to such disqualified person an amount which equals or exceeds the fair market value of such property at the time of the disposition or at the time (after June 30, 1976) a contract for the disposition was previously executed in a transaction which would not constitute a prohibited transaction (within the meaning of section 503(b) or any corresponding provision of prior law).". (b) EFFECTIVE DATE.—The amendments made by subsection (a) shall apply to dispositions after the date of the enactment of this Act in taxable years ending after such date. SEC. 1302. NEW PRIVATE FOUNDATION SET-ASIDES. (a) IN GENERAL.—Section 4942(g)(2) (relating to definition of qualifying distributions) is amended to read as follows: "(2)

26 USC 4940 "°*®"

26 USC 4940 °°*^26 USC 4942.

CERTAIN SET-ASIDES.—

"(A) IN GENERAL.—For all taxable years beginning ou or Effective date, after January 1, 1975, subject to such terms and conditions as may be prescribed by the Secretary, an amount set aside for a specific project which comes within one or more purposes described in section 170(c)(2)(B) may be treated as a qualifying distribution if it meets the requirements of subparagraph (B). "(B) REQUIREMENTS.—An amount set aside for a specific project shall meet the requirements of this subparagraph if at the time of the set-aside the foundation establishes to the satisfaction of the Secretary that the amount will be paid for the specific project within 5 years, and either— "(i) at the time of the set-aside the private foundation establishes to the satisfaction of the Secretary that the project is one which can better be accomplished by such set-aside than by immediate payment of funds, or " ( i i)(I) the project will not be completed before the end of the taxable year of the foundation in which the set-aside is made,

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