An Act to exclude from gross income gains from the condemnation of certain forest lands held in trust for the Klamath Indian Tribe.
PL 94-81 (H.R.83), enacted 08/09/1975

PUBLIC LAW 94-81—AUG. 9, 1975 
89 STAT. 417 
Public Law 94-81 
94th Congress 
An Act 
To exclude from gross income gains from the condemnation of certain forest 
lands held in trust for the Klamath Indian Tribe. 
Be it enacted hy the Seriate and House of Representatives 
of the 
United 
States 
of America 
in Congress 
assembled, 
That, for pur-
poses of the Internal Revenue Code of 1954, gain resulting from the 
condemnation, pursuant to Public Law 93-102, of the Klamath Indian 
forest lands held by the trustee for the Klamath Indian Tribe— 
(1) shall be excluded from the gross income of the trust, and 
(2) on the distribution from the trust of the proceeds of such 
condemnation, shall be excluded from the gross income of each 
person receiving such distribution. 
SEC. 2. TRANSFERS OF SECTION 1245 PROPERTY OR SECTION 1250 
PROPERTY TO TAX-EXEMPT ORGANIZATION WHICH USES SUCH 
PROPERTY IN AN UNRELATED TRADE OR BUSINESS. 
(a) AMENDMENTS or SECTION 1245.— 
(1) The second sentence of section 1245(b)(3) (relating to 
gain from dispositions of certain depreciable property) is amended 
by striking out "This" and inserting in lieu thereof "Except as 
provided in paragraph (7), this". 
(2) Section 1245(b) is amended by adding at the end thereof 
the following new paragraph: 
"(7) TRANSFERS TO TAX-EXEMPT ORGANIZATION WHERE PROPERTY 
WILL BE USED IN UNRELATED BUSINESS. 
" ( A ) I N GENERAL.—The second sentence of paragraph (3) 
shall not apply to a disposition of section 1245 property to 
an organization described in section 511(a) (2) or 511(b) (2) 
if, immediately after such disposition, such organization uses 
such property in an unrelated trade or business (as defined in 
section 513). 
" ( B ) LATER CHANGE I N USE.—If any property with respect 
to the disposition of which gain is not recognized by reason 
of subparagraph (A) ceases to be used in an unrelated trade 
or business of the organization acquiring such property, such 
organization acquiring such property, such organization shall 
be treated for purposes of this section as having disposed of 
such property on the date of such cessation.". 
(b) AMENDMENTS TO SECTION 1250.— 
(1) The second sentence of section 1250(d) (3) (relating to gain 
from dispositions of certain depreciable realty) is amended by 
striking out "This" and inserting in lieu thereof "Except as pro-
vided in paragraph (9), this". 
(2) Section 1250(d) is amended by adding at the end thereof 
the following new paragraph: 
"(9) TRANSFERS TO TAX-EXEMPT ORGANIZATION WHERE PROPERTY 
WILL BE USED IN UNRELATED BUSINESS.— 
" ( A ) I N GENERAL.—The second sentence of paragraph (8) 
shall not apply to a disposition of section 1250 property to an 
organization described in section 511(a) (2) or 511(b) (2) if, 
immediately after such disposition, such organization uses 
Aug. 9, 1975 
[H.R. 83] 
Indians. 
Klamath Tribe, 
gains from 
condemnation of 
certain forest 
lands. 
Tax exclusion. 
25 use 564j 
note. 
25 use 564W-2. 
26 use 1245. 
26 use 511. 
26 use 513. 
26 use 1250. 
89 STAT. 418 
PUBLIC LAW 94-81—AUG. 9, 1975 
such property in an unrelated trade or business (as defined 
in section 513). 
" ( B ) LATER CHANGE IX USE.—If any property Avitli respect 
to the disposition of which gain is not recognized by reason of 
subparagraph (A) ceases to be used in an unrelated trade or 
business of the organization acquiring such property, such 
organization shall be treated for purposes of this section as 
having disposed of such property on the date of such 
cessation.". 
26 use 1250 
(c) EFFECTIVE DATE.— 
note. 
(1) I N GENERAL.—Except as provided in paragraph (2) the 
amendments made by this section shall apply to dispositions iafter 
December 31,1969, in taxable years ending after such date. 
(2) ELECTION FOR PAST TRANSACTIONS.—In the case of any dis-
position occurring before the date of the enactment of this Act, 
the amendments made by this section sha,ll apply only if the orga-
nization acquiring the property elects (in the manner provided by 
regulations prescribed by the Secretary of the Treasury or his 
delegate) within 1 year after the date of the enactment of this 
Act to have such amendments apply with respect to such property. 
SEC. 3. DEFINITION OF PRIVATE FOUNDATION. 
(a) Subparagraph (B) of section 509(a) (2) of the Internal Rev-
26 USG 509. 
enue Code of 1954 (relating to permitted extent of private support) is 
a,mended to read as follows: 
" ( B ) normally receives not more than one-third of its support 
in each taxable year from the sum of— 
"(i) gross investment incomes (as dejfined in subsection (e)) 
and 
"(ii) the excess (if any) of the amount of the unrelated 
26 use 512. 
business taxable income (as defined in section 512) ov^er the 
26 use 511. 
amount of the tax imposed by section 511;". 
Effective date. 
(b) The amendment made by this section shall apply to unrelated 
26 use 509 note, 
business taxable income derived from trades and businesses which are 
acquired by the organization after June 30, 1975. 
Approved August 9, 1975. 
LEGISLATIVE HISTORY: 
HOUSE REPORT No. 94-250 (eomm. on Ways and Means). 
SENATE REPORT No. 94-272 (Comm. on Finance). 
CONGRESSIONAL RECORD, Vol 121 (1975): 
June 26, considered and passed House. 
July 11, considered and passed Senate, amended. 
July 25, House concurred in Senate amendment with an amendment. 
Aug. 1, Senate concurred in House amendment to Senate amendment.