§ 4942.
(j)
Other definitions
For purposes of this section—
(1)
Taxable period
The term “taxable period” means, with respect to the undistributed income for any taxable year, the period beginning with the first day of the taxable year and ending on the earlier of—
(A)
the date of mailing of a notice of deficiency with respect to the tax imposed by subsection (a) under section 6212, or
(B)
the date on which the tax imposed by subsection (a) is assessed.
(2)
Allowable distribution period
The term “allowable distribution period” means, with respect to any private foundation, the period beginning with the first day of the first taxable year following the taxable year in which the incorrect valuation (described in subsection (a)(2)) occurred and ending 90 days after the date of mailing of a notice of deficiency (with respect to the tax imposed by subsection (a)) under section 6212 extended by—
(A)
any period in which a deficiency cannot be assessed under section 6213(a), and
(B)
any other period which the Secretary determines is reasonable and necessary to permit a distribution of undistributed income under this section.
(3)
Operating foundation
For purposes of this section, the term “operating foundation” means any organization—
(A)
which makes qualifying distributions (within the meaning of paragraph (1) or (2) of subsection (g)) directly for the active conduct of the activities constituting the purpose or function for which it is organized and operated equal to substantially all of the lesser of—
(i)
its adjusted net income (as defined in subsection (f)), or
(ii)
its minimum investment return; and
(B)
(i)
substantially more than half of the assets of which are devoted directly to such activities or to functionally related businesses (as defined in paragraph (4)), or to both, or are stock of a corporation which is controlled by the foundation and substantially all of the assets of which are so devoted,
(ii)
which normally makes qualifying distributions (within the meaning of paragraph (1) or (2) of subsection (g)) directly for the active conduct of the activities constituting the purpose or function for which it is organized and operated in an amount not less than two-thirds of its minimum investment return (as defined in subsection (e)), or
(iii)
substantially all of the support (other than gross investment income as defined in section 509(e)) of which is normally received from the general public and from 5 or more exempt organizations which are not described in section 4946(a)(1)(H) with respect to each other or the recipient foundation; not more than 25 percent of the support (other than gross investment income) of which is normally received from any one such exempt organization; and not more than half of the support of which is normally received from gross investment income.
Notwithstanding the provisions of subparagraph (A), if the qualifying distributions (within the meaning of paragraph (1) or (2) of subsection (g)) of an organization for the taxable year exceed the minimum investment return for the taxable year, clause (ii) of subparagraph (A) shall not apply unless substantially all of such qualifying distributions are made directly for the active conduct of the activities constituting the purpose or function for which it is organized and operated.
(4)
Functionally related business
The term “functionally related business” means—
(A)
a trade or business which is not an unrelated trade or business (as defined in section 513), or
(B)
an activity which is carried on within a larger aggregate of similar activities or within a larger complex of other endeavors which is related (aside from the need of the organization for income or funds or the use it makes of the profits derived) to the exempt purposes of the organization.
(5)
Certain elderly care facilities
(Added [Pub. L. 91–172, title I, § 101(b)], Dec. 30, 1969, [83 Stat. 502]; amended [Pub. L. 94–455, title XIII], §§ 1302(a), 1303(a), 1310(a), title XIX, § 1906(b)(13)(A), Oct. 4, 1976, [90 Stat. 1713], 1715, 1729, 1834; [Pub. L. 95–600, title V, § 522(a)], Nov. 6, 1978, [92 Stat. 2885]; [Pub. L. 96–596, § 2(a)(1)(C)], (2)(B), (3)(B), (4)(A), Dec. 24, 1980, [94 Stat. 3469–3472]; [Pub. L. 97–34, title VIII, § 823(a)], Aug. 13, 1981, [95 Stat. 351]; [Pub. L. 97–448, title I, § 108(b)], Jan. 12, 1983, [96 Stat. 2391]; [Pub. L. 98–369, div. A, title III], §§ 304(a), (b), 305(b)(4), 314(a)(1), (2), July 18, 1984, [98 Stat. 782–784], 787; [Pub. L. 99–514, title XIII, § 1301(j)(6)], Oct. 22, 1986, [100 Stat. 2658]; [Pub. L. 109–280, title XII], §§ 1212(b), 1244(a), Aug. 17, 2006, [120 Stat. 1074], 1107; [Pub. L. 110–172, § 11(a)(14)(D)], Dec. 29, 2007, [121 Stat. 2485]; [Pub. L. 113–295, div. A, title II, § 221(a)(105)], Dec. 19, 2014, [128 Stat. 4053].)