Editorial Notes
References in Text

The date of the enactment of this subsection, referred to in subsec. (f)(1)(A), (B)(ii), is the date of enactment of Pub. L. 109–280, which was approved Aug. 17, 2006.

Codification

Sections 1221(a)(2) and 1241(a), (b) of Pub. L. 109–280, which directed the amendment of section 509 without specifying the act to be amended, were executed to this section, which is section 509 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress. See 2006 Amendment notes below.

Amendments

2006—Subsec. (a)(3)(B). Pub. L. 109–280, § 1241(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “is operated, supervised, or controlled by or in connection with one or more organizations described in paragraph (1) or (2), and”. See Codification note above.

Subsec. (e). Pub. L. 109–280, § 1221(a)(2), inserted at end “Such term shall also include income from sources similar to those in the preceding sentence.” See Codification note above.

Subsec. (f). Pub. L. 109–280, § 1241(b), added subsec. (f). See Codification note above.

1978—Subsec. (e). Pub. L. 95–345 inserted provision relating to payments with respect to securities loans.

1975—Subsec. (a)(2)(B). Pub. L. 94–81 designated existing provisions as cl. (i) and added cl. (ii).

Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment

Pub. L. 109–280, title XII, § 1221(c), Aug. 17, 2006, 120 Stat. 1089, provided that: “The amendments made by this section [amending this section and section 4940 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [Aug. 17, 2006].”

Pub. L. 109–280, title XII, § 1241(e), Aug. 17, 2006, 120 Stat. 1103, provided that:

“(1)
In general.—
The amendments made by subsections (a) and (b) [amending this section] shall take effect on the date of the enactment of this Act [Aug. 17, 2006].
“(2)
Charitable trusts which are type iii supporting organizations.—
Subsection (c) [enacting provisions set out as a note below] shall take effect—
“(A)
in the case of trusts operated in connection with an organization described in paragraph (1) or (2) of section 509(a) of the Internal Revenue Code of 1986 on the date of the enactment of this Act, on the date that is one year after the date of the enactment of this Act, and
“(B)
in the case of any other trust, on the date of the enactment of this Act.”

Effective Date of 1978 Amendment

Pub. L. 95–345, § 2(e), Aug. 15, 1978, 92 Stat. 483, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “The amendments made by this section [enacting section 1058 of this title and amending sections 509, 512, 514, 851, and 4940 of this title] apply with respect to—

“(1)
amounts received after December 31, 1976, as payments with respect to securities loans (as defined in section 512(a)(5) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), and
“(2)
transfers of securities, under agreements described in section 1058 of such Code, occurring after such date.”

Effective Date of 1975 Amendment

Pub. L. 94–81, § 3(b), Aug. 9, 1975, 89 Stat. 418, provided that: “The amendment made by this section [amending this section] shall apply to unrelated business taxable income derived from trades and businesses which are acquired by the organization after June 30, 1975.”

Effective Date

Section effective Jan. 1, 1970, see section 101(k)(1) of Pub. L. 91–172, set out as a note under section 4940 of this title.

Savings Provision

Applicability of subsec. (a) of this section to testamentary trusts, see section 101(l)(7) of Pub. L. 91–172, set out as a note under section 4940 of this title.

Charitable Trusts Which Are Type III Supporting Organizations

Pub. L. 109–280, title XII, § 1241(c), Aug. 17, 2006, 120 Stat. 1103, provided that: “For purposes of section 509(a)(3)(B)(iii) of the Internal Revenue Code of 1986, an organization which is a trust shall not be considered to be operated in connection with any organization described in paragraph (1) or (2) of section 509(a) of such Code solely because—

“(1)
it is a charitable trust under State law,
“(2)
the supported organization (as defined in section 509(f)(3) of such Code) is a beneficiary of such trust, and
“(3)
the supported organization (as so defined) has the power to enforce the trust and compel an accounting.”

Payout Requirements for Type III Supporting Organizations

Pub. L. 109–280, title XII, § 1241(d), Aug. 17, 2006, 120 Stat. 1103, provided that:

“(1)
In general.—
The Secretary of the Treasury shall promulgate new regulations under section 509 of the Internal Revenue Code of 1986 on payments required by type III supporting organizations which are not functionally integrated type III supporting organizations. Such regulations shall require such organizations to make distributions of a percentage of either income or assets to supported organizations (as defined in section 509(f)(3) of such Code) in order to ensure that a significant amount is paid to such organizations.
“(2)
Type iii supporting organization; functionally integrated type iii supporting organization.—
For purposes of paragraph (1), the terms ‘type III supporting organization’ and ‘functionally integrated type III supporting organization’ have the meanings given such terms under subparagraphs (A) and (B) section 4943(f)(5) of the Internal Revenue Code of 1986 (as added by this Act), respectively.”