Unrelated Debt-financed Income of Tax-exempt Organizations: Hearing, Eighty-ninth Congress, Second Session. August 29, 1966U.S. Government Printing Office, 1966 - 60 pages Considers H.R. 15942 and identical H.R. 15943, to tax tax-exempt organizations' income generated from business not related to the organizations' charitable functions, including investment borrowing. |
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acquisition indebtedness adjusted basis amount assets bootstrap sale bootstrap transaction borrowed funds business lease business taxable income capital gains rates capital gains treatment CHAIRMAN charitable organizations charity church Clay Brown Commissioner Committee computing CONGRESS THE LIBRARY CURTIS debt-financed property deductions depreciation dividends downpayment enacted exempt organiza exempt organizations fact financed Fortuna Government gross income income tax income-producing Institute interest Internal Revenue Code June 27 leaseback LEBOW lessee corporation LIBRARY OF CONGRES LIBRARY OF CONGRESS ment National Tax Equality ness ordinary income owners paid payment percent present problems produced profits proposed legislation provisions purchase price purposes received religious organizations rent rental income respondents result section 514 sellers selling statement Supreme Court Surrey tax base Tax Court Tax Equality Association tax exemption tax on unrelated tax-exempt organization taxation taxpayers tion trade or business transfer Treasury Department unrelated business income unrelated business taxable unrelated debt-financed income WILBUR D Young Israel
Popular passages
Page 15 - ... unrelated trade or business' means, in the case of any organization subject to the tax imposed by section 511, any trade or business the conduct of which is not substantially related (aside from the need of such organization for income or funds or the use it makes of the profits derived) to the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501...
Page 13 - unrelated business taxable income" means the gross income derived by any organization from any unrelated trade or business (as defined in section 513) regularly carried on by it, less the deductions allowed by this chapter which are directly connected with the carrying on of such trade or business, both computed with the exceptions, additions, and limitations provided in subsection (b). In the case of an organization described in section 511 which is a foreign organization, the unrelated business...
Page 5 - sale" is a word of precise legal import, both at law and in equity. It means at all times a contract between parties to give and to pass rights of property for money, which the buyer pays or promises to pay to the seller for the thing bought and sold.
Page 13 - to relieve the taxpayer from * * * excessive tax burdens on gains resulting from a conversion of capital investments, and to remove the deterrent effect of those burdens on such conversions.
Page 6 - ... property sold, changes his status from that of a creditor to one having a proprietary stake, within the purview of the statute. We conclude that the Circuit Court of Appeals was in error in holding that, as respects any of the property transferred to the Water Company, the transaction was other than a sale or exchange upon which gain or loss must be reckoned in accordance with the provisions of the revenue act dealing with the recognition of gain or loss upon a sale or exchange.
Page 26 - For purposes of this section, the term "debt-financed property" means any property which is held to produce income and with respect to which there is an acquisition indebtedness...
Page 28 - Accelerated depreciation ordinarily has the effect of deferring tax on income from depreciable property. However, under the approach of the proposed bills, an exempt organization would become a taxpayer only for a limited period of time — while acquisition indebtedness remains outstanding — and would during that time be taxed on a declining proportion of its income. In that setting, accelerated depreciation can be used for more than mere tax deferral; it can be used to reduce the total amount...
Page 15 - Incurred but for such acquisition or improvement and the Incurrence of such Indebtedness was reasonably foreseeable at the time of such acquisition or Improvement. (2) Property acquired subject to mortgage, etc. Where real property Is acquired subject to a mortgage or other similar lien, the amount of the Indebtedness secured by such mortgage or lien shall be considered...
Page 15 - ... indebtedness incurred after the acquisition or improvement of such property if such indebtedness would not have been incurred but for such acquisition or improvement and the incurrence of such indebtedness was reasonably foreseeable at the time of such acquisition or improvement.
Page 5 - Court has long held that the term "capital asset" is to be construed narrowly in accordance with the purpose of Congress to afford capital-gains treatment only in situations typically involving the realization of appreciation in value accrued over a substantial period of time, and thus to ameliorate the hardship of taxation of the entire gain in one year, Burnet v.