Page:United States Statutes at Large Volume 98 Part 1.djvu/831

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 783

"(E) TRANSITIONAL RULE.—In the case of any preceding taxable year which begins before January 1, 1985, the amount of the grant administrative expenses taken into account under subparagraph (A)(ii) shall not exceed.65 percent of the net assets of the private foundation for such taxable year. "(F) TERMINATION.—This paragraph shall not apply to taxable years beginning after December 31, 1990." (2) Subparagraph (A) of section 4942(g)(1) (defining qualifying 26 USC 4942. distribution) is amended by striking out "including administrative expenses" and inserting in lieu thereof "including that portion of reasonable and necessary administrative expenses". (b) REQUIRED DISTRIBUTION INCREASED BY AMOUNT OF CERTAIN REPAYMENTS, ETC.—Paragraph (1) of section 4942(d) (defining dis-

tributable amount) is amended to read as follows: "(1) the sum of the minimum investment return plus the amounts described in subsection (f)(2)(C), reduced by". (c) EFFECTIVE DATE.—The amendments made by this section shall 26 USC 4942 apply to taxable years beginning after December 31, 1984. ^°^SEC. 305. ABATEMENT OF FIRST TIER TAXES IN CERTAIN CASES.

(a) GENERAL RULE.—Subchapter C of chapter 42 (relating to abatement of second tier taxes) is amended by redesignating section 4962 as section 4963 and by inserting after section 4961 the following new 26 USC 4963. section: "SEC. 4962. ABATEMENT OF PRIVATE FOUNDATION FIRST TIER TAXES IN 26 USC 4962. CERTAIN CASES.

"(a) GENERAL RULE.—If it is established to the satisfaction of the Secretary that— "(1) a taxable event was due to reasonable cause and not to willful neglect, and "(2) such event was corrected within the correction period for such event, then any private foundation first tier tax imposed with respect to such event (including interest) shall not be assessed and, if assessed, the assessment shall be abated and, if collected, shall be credited or refunded as an overpa5mient. "(b) PRIVATE FOUNDATION FIRST TIER TAX.—For purposes of this section, the term 'private foundation first tier tax' means any first tier tax imposed by subchapter A of chapter 42, except that such 26 USC 4940. term shall not include the tax imposed by section 4941(a) (relating to initial tax on self-dealing)." (b) CONFORMING AMENDMENTS.— 26 USC prec. (1) The heading of subchapter C of chapter 42 is amended to 4961. read as follows:

"Subchapter C—Abatement of First and Second Tier Taxes in Certain Cases". (2) The table of sections for subchapter C of chapter 42 is amended by striking out the item relating to section 4962 and inserting in lieu thereof the following: "Sec. 4962. Abatement of private foundation first tier taxes in certain cases. "Sec. 4963. Definitions."

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