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TITLE 26-INTERNAL REVENUE CODE residents of the Commonwealth of Puerto Rico shall be treated as an organization described in section 401(a) of such Code (section 401(a) of this title] if such trust- "(A) forms part of a pension, profit-sharing, or stock bonus plan, and "(B) is exempt from income tax under the laws of the Commonwealth of Puerto Rico. "(2) Election to have provisions of, and amendments made by, Title II of this Act apply. "(A) If the administrator of a pension, profit-shar- ing, or stock bonus plan which is created or orga- nized in Puerto Rico elects, at such time and in such manner as the Secretary of the Treasury may re- quire, to have the provisions of this paragraph apply, for plan years beginning after the date of election any trust forming a part of such plan shall be treated as a trust created or organized in the United States for purposes of sec ion 401(a) of the Internal Revenue Code of 1954 [section 401(a) of this title]. "(B) An election under subparagraph (A), once made, is irrevocable. "(C) This paragraph applies to plan years begin- ning after the date of enactment of this Act [Sept. 2, 1974] "(D) The source of any distributions made under a plan which makes an election under this paragraph to participants and beneficiaries residing outside of the United States shall be determined, for purposes of subchapter N of chapter 1 of the Internal Rev- enue Code of 1954 (this title] by the Secretary of the Treasury in accordance with regulations pre- scribed by him. For purposes of this subparagraph the United States means the United States as de- fined in section 7701(a)(9) of the Internal Revenue Code of 1954 [section 7701(a)(9), of this title]." EXCHANGES FOR SALE OF POULTRY Pub. L. 89-44, title VIII, § 811, June 21, 1965, 79 Stat. 169, provided that certain corporations, associations, or organizations organized and operated exclusively for the purpose of providing an exchange for the sale of poultry growers of a particular locality shall be treated for purposes of this title as an exempt organi- zation and that such exemption shall apply to taxable years beginning after Dec. 31, 1953, and ending after Aug. 16, 1954, which begin before Jan. 1, 1966. CROSS REFERENCES Business lease indebtedness, see section 514 of this title. Constructive ownership of stock rule inapplicable to tax exempt employees' trust, see section 318 of this title. Corporate deductions for dividends received in appli- cable to dividends from corporation exempt from tax under this section, see section 246 of this title. Deduction for contributions of employer to employ- ees' trust or annuity plan and compensation under a deferred-payment plan, see section 404 of this title. Denial of exemption, see section 504 of this title. Disallowance of losses with respect to transactions between persons and certain tax exempt educational and charitable organizations, see section 267 of this title. Exclusion of services performed in employ of organi- zation exempt from tax under this section- Employment under Federal Unemployment Tax Act, see section 3308 of this title. Employment under title II of the Social Security Act, see section 410 of Title 42, The Public Health and Welfare. Feeder organizations, see section 502 of this title. Imposition of tax on unrelated business income of charitable, etc., organizations, see section 511 of this title. Includible corporation relative to consolidated re- turns as excluding corporation exempt from tax under this section, see section 1504 of this title. Lottery under wagering taxes as excluding drawings conducted by organization exempt from tax under this section, see section 4421 of this title. Nonforfeitable rights relative to employees' death benefits, see section 101 of this title. Partial exclusion of dividends received by individuals inapplicable to dividends from corporation exempt from tax under this section, see section 116 of this title. Prohibition on interests in nonbanking organizations inapplicable to certain bank holding companies exempt under this section, see section 1843 of Title 12, Banks and Banking. Requirements for exemption, see section 503 of this title. Returns by exempt organizations, see section 6033 of this title. Scholarships and fellowship grants to individuals who are not candidates for degrees as excludible from gross income where grantor is an organization de- scribed in this section. see section 117 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 37, 72, 101, 103, 104. 116, 117, 170, 219, 246, 267, 274, 311, 318, 382, 401 to 405, 408 to 412, 414, 415, 502, 504, 507, 508, 509, 511, 512, 513, 514, 527, 542, 642, 681, 805, 821, 871, 911, 992, 1504, 1563, 2039, 2055, 2517, 2522, 3121, 3303, 3306, 3401, 4041, 4221, 4251, 4253, 4294, 4421, 4911, 4940, 4941, 4942, 4945, 4947, 4948, 4975, 5214, 6033, 6043. 6047, 6104, 6110, 6420, 6421, 6424, 6427, 6501, 7428, 7609, 7802, 9012 of this title; title 5 sections 3102, 4111; title 12 section 1843: title 15 sections 77c, 1291; title 18 sections 1511, 195k, title 20 sections 76m, 1681; title 29 sections 169, 303, 706, 1002, 1051, 1052, 1081, 1086, 1321; title 40 sections 483, 484; title 42 sections 300e-9, 409, 410, 1395x, 1760, 1766, 1784, 2000e, 2996b, 3056; title 50 section 790. SECTION REFERRED TO IN D.C. CODE This section is referred to in sections 1-1162, 2-2103, 46-301, 46-303 of the District of Columbia Code. § 502. Feeder organizations (a) General rule An organization operated for the primary purpose of carrying on a trade or business for profit shall not be exempt from taxation under section 501 on the ground that all of its profits are payable to one or more organizations exempt from taxation under section 501. (b) Special rule For purposes of this section, the term "trade or business" shall not include- (1) the deriving of rents which would be ex- cluded under section 512(b)(3), if section 512 applied to the organization, (2) any trade or business in which substan- tially all the work in carrying on such trade or business is performed for the organization without compensation, or (3) any trade or business which is the sell- ing of merchandise, substantially all of which has been received by the organization as gifts or contributions. (Aug. 16, 1954, ch. 736, 68A Stat. 166; Dec. 30, 1969, Pub. L. 91-172, title I, § 121(b)(7), 83 Stat. 542.) AMENDMENTS 1969-Pub. L. 91-172 redesignated first sentence of existing provisions as subsec. (a), and substantial por- tion of second sentence as subsec. (b)(1). and, in subsec. (b)(1) as so redesignated, inserted reference to section 512 of this title, and added pars. (2) and (3). Page 381 § 502