In computing the deduction allowable under section
642(c) to a trust, no amount otherwise allowable under section
642(c) as a deduction shall be allowed as a deduction with respect to income of the taxable year which is allocable to its unrelated business income for such year. For purposes of the preceding sentence, the term “unrelated business income” means an amount equal to the amount which, if such trust were exempt from tax under section
501(a) by reason of section
501(c)(3), would be computed as its unrelated business taxable income under section
512 (relating to income derived from certain business activities and from certain property acquired with borrowed funds).
(b) Cross reference
For disallowance of certain charitable, etc., deductions otherwise allowable under section
642(c), see sections
1969—Subsec. (a). Pub. L. 91–172, § 121(d)(2)(B), substituted reference to certain property acquired with borrowed funds for reference to certain leases.
Subsec. (b). Pub. L. 91–172, § 101(j)(18), (19), redesignatedsubsec. (d) as (b) and substituted “sections
4948(c)(4)” for “section
503(e)”. Former subsec. (b), dealing generally with the operation of trusts, was struck out.
Subsec. (c). Pub. L. 91–172, § 101(j)(18), struck out subsec. (c) dealing with accumulated income.
Subsec. (d). Pub. L. 91–172, § 101(j)(19), redesignatedsubsec. (d) as (b).
1968—Subsec. (c). Pub. L. 90–630inserted provision that par. (1) does not apply to income attributable to property transferred to a trust before January 1, 1951, by the creator thereof if the trust was irrevocable on such date and if the income is required to be accumulated pursuant to the mandatory terms of the instrument creating the trust.
Effective Date of 1969 Amendment
Amendment by section 101(j)(18), (19) ofPub. L. 91–172effective Jan. 1, 1970, see section 101(k)(1) ofPub. L. 91–172, set out as an Effective Date note under section
4940 of this title.
Amendment by section 121(d)(2)(B) ofPub. L. 91–172applicable to taxable years beginning after Dec. 31, 1969, see section 121(g) ofPub. L. 91–172, set out as a note under section
511 of this title.
Effective Date of 1968 Amendment
Pub. L. 90–630, § 6(c),Oct. 22, 1968, 82 Stat. 1330, provided that: “The amendments made by subsection (a) [amending section
504 of this title] and (b) [amending this section] shall apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954. For purposes of sections 3814 and 162(g)(4) of the Internal Revenue Code of 1939, provisions having the same effect as such amendments shall be treated as included in such sections effective with respect to taxable years beginning after December 31, 1950.”
The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.
The most recent Classification Table update that we have noticed was Tuesday, August 13, 2013
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Description of Change
Statutes at Large
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