83 STAT. ]
PUBLIC LAW 91-172-DEC. 30, 1969
499
" (B) MODIFICATIONS.—For purposes of subparagraph (A)" (i) The deduction provided by section 167 shall be ^J^^°^*' P^' ^^^' allowed, but only on the basis of the straight line method of depreciation. "(ii) The deduction for depletion provided by section 611 shall be allowed, but such deduction shall be deteresA stat, 207. mined without regard to section 613 (relating to percent^^ ^^^ ^'^^' age depletion). Post, p. 629. "(4:) CAPITAL GAINS AND LOSSES.—For purposes of paragraph
(1) in determining net capital gain— " (A) There shall be taken into account only gains and losses from the sale or other disposition of property used for the production of interest, dividends, rents, and royalties, and property used for the production of income included in computing the tax imposed by section 511 (except to" the extent ^osf, p. sse. gain or loss from the sale or other disposition of such property is taken into account for purposes of such tax). " (B) The basis for determining gain in the case of property held by the private foundation on December 31, 1969, and continuously thereafter to the date of its disposition shall be deemed to be not less than the fair market value of such property on December 31, 1969. " (C) Losses from sales or other dispositions of property shall be allowed only to the extent of gams from such sales or other dispositions, and there shall be no capital loss carryovers. "(5) TAX-EXEMPT INCOME.—For purposes of this section, net investment income shall be determined by applying section 103 Post. p. sse. (relating to interest on certain governmental obligations) and section 265 (relating to expenses and interest relating to tax- ^^l^f^l): ^^' 78 Stat. 56. exempt income). "SEC. 4941. TAXES ON SELF-DEALING. " (a) INITIAL TAXES.—
" (1) O N SELF-DEALER.—There is hereby imposed a tax on each act of self-dealing between a disqualified person and a private foundation. The rate of tax shall be equal to 5 percent of the amount involved with respect to the act of self-dealing for each year (or part thereof) in the taxable period. The tax imposed by this paragraph shall be paid by any disqualified person (other than a foundation manager acting only as such) who participates in the act of self-dealing. I n the case of a government official (as defined in section 4946(c)), a tax shall be imposed by this paragraph only if such disqualified person participates in the act of self-dealing knowing that it is such an act. "(2) O N FOUNDATION MANAGER.—In any case in which a tax is imposed by paragraph (1), there is hereby imposed on the participation of any foundation manager in an act of self-dealing between a disqualified person and a private foundation, knowing that it is such an act, a tax equal to 21/1 percent of the amount involved with respect to the act of self-dealing for each year (or part thereof) in the taxable period, unless such participation is not willful and is due to reasonable cause. The tax imposed by this paragraph shall be paid by any foundation manager who participated in the act of self-dealing.
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