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TITLE 26-INTERNAL REVENUE CODE (e) Definition of gross investment income For purposes of subsection (d), the term "gross investment income" means the gross amount of income from interest, dividends, rents, and royalties, but not including any such income to the extent included in computing the tax imposed by section 511. (Added Pub. L. 91-172, title I, § 101(a), Dec. 30, 1969, 83 Stat. 496, and amended Pub. L. 94-81, § 3(a), Aug. 9, 1975, 89 Stat. 418.) AMENDMENTS 1975-Subsec. (a)(2)(B). Pub. L. 94-81 designated ex- isting provisions as cl. (i), and added cl. (ii). ErFECTIVE DATE OF 1975 AmzNDms Nr Section 3(b) of Pub. L. 94-81 provided that: "The amendment made by this section [amending subsec- tion (a)(2)(B) of this section] shall apply to unrelated business taxable income derived from trades and busi- nesses 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 an Effective Date note under section 4940 of this title. SAVINGS PROVISION Applicability of subsec. (a) of this section to testa- mentary trusts, see section 101(l)(7) of Pub. L. 91-172, set out as Savings Provisions note under section 4940 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 170, 501, 507, 508, 527, 542, 3121, 4942, 4945, 4947, 6033, 6043, 6056, 6104, 6111 of this title; title 42 sections 3001-1, 410. PART III-TAXATION OF BUSINESS INCOME OF CERTAIN EXEMPT ORGANI- ZATIONS Sec. 511. Imposition of tax on unrelated business income of charitable organizations, etc. 1 512. Unrelated business taxable income. 513. Unrelated trade or business. 514. Unrelated debt-financed income. 515. Taxes of foreign countries and possessions of the United States. AMENDMENTS 1669-Pub. L. 91-172, title I, §§ 101(a), 121(d)(3)(C), Dec. 30, 1969, 83 Stat. 492, 548, substituted "Part III" for "Part II" as the Part designation and substituted "Unrelated debt-financed income" for "Business leases" in item 514, CROSS REFERENCES Organization considered as exempt from income taxes for purpose of any law referring thereto, not- withstanding its taxability under this part, see section 501 of this title. PART REFERREI TO IN OTHER SECTIONS This part is referred to in section 501 of this title. 'So in original. Does not conform to section catch- line. § 511. Imposition of tax on unrelated business income of charitable, etc., organizations (a) Charitable, etc., organizations taxable at corpora. tion rates (1) Imposition of tax There is hereby imposed for each taxable year on the unrelated business taxable income (as defined in section 512) of every or- ganization described in paragraph (2) a normal tax and a surtax computed as pro- vided in section 11. In making such computa- tion for purposes of this section, the term "taxable income" as used in section 11 shall be read as "unrelated business taxable income". (2) Organizations subject to tax (A) Organizations described in sections 401(a) and 501(c) The taxes imposed by paragraph (1) shall apply in the case of any organization (other than a trust described in subsection (b) or an organization described in section 501(c)(1)) which is exempt, except as pro- vided in this part or part II (relating to pri- vate foundations), from taxation under this subtitle by reason of section 501(a). (B) State colleges and universities The taxes imposed by paragraph (1) shall apply in the case of any college or universi- ty which is an agency or instrumentality of any government or any political subdivision thereof, or which is owned or operated by a government or any political subdivision thereof, or by any agency or instrumental- ity of one or more governments or political subdivisions. Such taxes shall also apply in the case of any corporation wholly owned by one or more such colleges or universities. (b) Tax on charitable, etc., trusts (1) Imposition of tax There is hereby imposed for each taxable year on the unrelated business taxable income of every trust described in paragraph (2) a tax computed as provided in section l(d). In making such computation for purposes of this section, the term "taxable income" as used in section 1 shall be read as "unrelated business taxable income" as defined in section 512. (2) Charitable, etc., trusts subject to tax The tax imposed by paragraph (1) shall apply in the case of any trust which is exempt, except as provided in this part or part II (relating to private foundations), from taxation under this subtitle by reason of sec- tion 501(a) and which, if it were not for such exemption, would be subject to subchapter J (sec. 641 and following, relating to estates, trusts, beneficiaries, and decedents). (c) Special rule for section 501(c)(2) corporations If a corporation described in section 501(c)(2)- (1) pays any amount of its net income for a taxable year to an organization exempt from taxation under section 501(a) (or which would pay such an amount but for the fact that the expenses of collecting its income exceed its income), and 71-999 0 - 78 - 27 (Vol. 7) Page 389