Page:United States Statutes at Large Volume 92 Part 1.djvu/535

 PUBLIC LAW 95-345—AUG. 15, 1978

Public Law 95-345 95th Congress

92 STAT. 481

An Act

To amend the Internal Revenue Code of 1954 with respect to the treatment of mutual or cooperative telephone company income from nonmember telephone companies, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. TREATMENT OF MUTUAL OR COOPERATIVE TELEPHONE COMPANY INCOME FROM NONMEMBER TELEPHONE COMPANY. (a) IN GENERAL. — Paragraph (12) of section 501(c) of the Internal Revenue Code of 1954 (relating to certain organizations exempt from income tax) is amended by adding at the end thereof the following new sentence: " I n the case of any mutual or cooperative telephone company, the preceding sentence shall be applied without taking into account any income received or accrued from a nonmember telephone company for the performance of communication services which involve members of such mutual or cooperative telephone company.". (b) EFFECTIVE D A T E. — The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 1974. SEC. 2. LENDING OF SECURITIES BY EXEMPT ORGANIZATIONS.

Aug. 15. 1978 [H.R. 7581]

Internal Revenue Code of 1954, amendments.

26 USC 501.

26 USC 501 note.

(a) TREATMENT OF INCOME F R O M P A Y M E N T S W I T H RESPECT TO SECURITIES L O A N S. — (1) INCLUSION I N GROSS INVESTMENT INCOME FOR PURPOSES OF

DEFINING PRIVATE FOUNDATION.—Section 509(e) of the I n t e r n a l

Revenue Code of 1954 (relating to definition of gross investment income) is amended by inserting "payments with respect to securities loans (as defined in section 512(a)(5)), " after "dividends,". (2)

Infra.

EXCLUSION FROM UNRELATED BUSINESS TAXABLE INCOME.—

Section 5 1 2 (b)(1) of such Code (relating to modifications of unrelated business taxable income) is amended by inserting "payments with respect to securities loans (as defined in section 512 (a)(5)), after "interest,". (3)

26 USC 509.

REGULATED INVESTMENT COMPANY INCOME.—Section

26 USC 512.

851

(b)(2) of such Code (relating to limitations on regulated invest- 26 USC 851. ment company income) is amended by inserting "payments with respect to securities loans (as defined in section 5 1 2 (a)(5)), " after "interest,". (4) INCLUSION I N NET INVESTMENT INCOME or PRIVATE FOUNDA-

TIONS.—Section 4 9 4 0 (c)(2) of such Code (relating to gross investment income) is amended by inserting "payments with respect to securities loans (as defined in section 512(a)(5)), " after "rents,". (b)

DEFINITION

OF PAYSIENTS

WITH

RESPECT

TO

26 USC 4940.

SECURITIES

LOANS.—Section 512(a) of such Code (relating to definition of unrelated business taxable income) is amended by adding at the end thereof the following new paragraph: "(5) DEFINITION OF PAYMENTS W I T H RESPECT TO SECURITIES LOANS.—

" (A) The term 'payments with respect to securities loans' includes all amounts received in respect of a security (as

26 USC 512.

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