Page:United States Statutes at Large Volume 98 Part 1.djvu/830

 98 STAT. 782

PUBLIC LAW 98-369—JULY 18, 1984 "(A) IN GENERAL.—The term 'base period' means, with respect to any taxable year, the 5 taxable years preceding such taxable year. "(B) N E W PRIVATE FOUNDATIONS, ETC.—If an organization has not been a private foundation throughout the base period referred to in subparagraph (A), the base period shall consist of the taxable years during which such foundation has been in existence. "(5) OTHER DEFINITIONS.—For purposes of this subsection— "(A) QUALIFYING DISTRIBUTION.—The term 'qualifying distribution' has the meaning given such term by section 4942(g). "(B) ASSETS.—The assets of a private foundation for any taxable year shall be treated as equal to the excess determined under section 4942(e)(1). "(6) TREATMENT OF SUCCESSOR ORGANIZATIONS, ETC.—In

26 USC 4940 note.

the

case of— "(A) a private foundation which is a successor to another private foundation, this subsection shall be applied with respect to such successor by taking into account the experience of such other foundation, and "(B) a merger, reorganization, or division of a private foundation, this subsection shall be applied under regulations prescribed by the Secretary." (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 1984. SEC. 304. AMENDMENT TO TAXES ON FAILURE TO DISTRIBUTE INCOME. (a) LIMIT ON AMOUNT OF CERTAIN ADMINISTRATIVE EXPENSES TAKEN INTO ACCOUNT AS QUALIFYING DISTRIBUTIONS.—

26 USC 4942.

(1) Subsection (g) of section 4942 (defining qualified distributions) is amended by adding at the end thereof the following new paragraph: "(4) LIMITATION ON ADMINISTRATIVE EXPENSES ALLOCABLE TO MAKING OF CONTRIBUTIONS, GIFTS, AND GRANTS.—

"(A) IN GENERAL.—The amount of the grant administrative expenses paid during any taxable year which may be taken into account as qualifying distributions shall not exceed the excess (if any) of— "(i).65 percent of the sum of the net assets of the private foundation for such taxable year and the immediately preceding 2 taxable years, over "(ii) the aggregate amount of grant administrative expenses paid during the 2 preceding taxable years which were taken into account as qualifying distributions. "(B) GRANT ADMINISTRATIVE EXPENSES.—For purposes of

this paragraph, the term 'grant administrative expenses' means any administrative expenses which are allocable to the making of qualified grants. "(C) QuAUFiED GRANTS.—For purposes of this paragraph, the term 'qualified grant' means any contribution, gift, or grant which is a qualifying distribution. "(D) NET ASSET.—For purposes of this paragraph, the term 'net assets' means, with respect to any taxable year, the excess determined under subsection (e)(1) for such taxable year.

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