2 TITLE II-INDIVIDUAL DEDUCTIONS SUBTITLE A-CHARITABLE CONTRIBUTIONS Sec. 201. Charitable contributions. SUBTITLE B-FARM LOSSES, ETC. Sec. 211. Gain from disposition of property used in farming where farm losses offset non farm income. SUBTITLE A-LIMIT ON TAX PREFERENCES AND ALLOCATION OF DEDUCTIONS Sec. 301. Limit on tax preferences for individuals, estates, and trusts. SUBTITLE B-INCOME AVERAGING Sec. 311. Income averaging. SUBTITLE C-RESTRICTED PROPERTY Sec. 321. Restricted property. SUBTITLE D-OTHER DEFERRED COMPENSATION Sec. 331. Deferred compensation. SUBTITLE E-ACCUMULATION TRUSTS, MULTIPLE TRUSTS, ETC. Sec. 341. Treatment of excess distributions by trusts. Sec. 342. Trust income for benefit of a spouse. TITLE IV-ADJUSTMENTS PRIMARILY AFFECTING CORPORATIONS SUBTITLE A-MULTIPLE CORPORATIONS Sec. 401. Multiple corporations. SUBTITLE B-DEBT-FINANCED CORPORATE ACQUISITIONS AND RELATED PROBLEMS Sec. 411. Interest on indebtedness incurred by corporations to acquire stock or assets of another corporation. Sec. 412. Installment method. Sec. 413. Bonds and other evidences of indebtedness. Sec. 414. Limitation on deduction of bond premium upon repurchase. 3 TITLE IV-ADJUSTMENTS PRIMARILY AFFECTING CORPORATIONS-Continued SUBTITLE C-STOCK DIVIDENDS Sec. 421. Stock dividends. SUBTITLE D-FOREIGN TAX CREDIT Sec. 431. Foreign tax credit reduction in case of foreign losses. Sec. 432. Separate limitation on foreign tax credit with respect to foreign mineral income. SUBTITLE E-FINANCIAL INSTITUTIONS Sec. 441. Reserve for losses on loans; net operating loss carrybacks. Sec. 442. Mutual savings banks, etc. Sec. 443. Treatment of bonds, etc., held by financial institutions. Sec. 444. Foreign deposits in United States banks. SUBTITLE F-DEPRECIATION ALLOWED REGULATED INDUSTRIES; EARNINGS AND PROFITS ADJUSTMENT FOR DEPRECIATION Sec. 451. Public utility property. Sec. 452. Effect on earnings and profits. SUBTITLE G-ALTERNATIVE CAPITAL GAIN RATE FOR CORPORATIONS Sec. 461. Increase of rate. TITLE V-ADJUSTMENTS AFFECTING INDIVIDUALS AND CORPORATIONS SUBTITLE A-NATURAL RESOURCES Sec. 501. Natural resources. SUBTITLE B-CAPITAL GAINS AND LOSSES Sec. 511. Repeal of alternative capital gains tax for individuals. Sec. 513. Letters, memorandums, etc. Sec. 514. Holding period of capital assets. Sec. 515. Total distributions from qualified pension, etc., plans. Sec. 516. Other changes in capital gains treatment. SUBTITLE C-REAL ESTATE DEPRECIATION Sec. 521. Depreciation of real estate. Sec. 531. Cooperatives. SUBTITLE D-COOPERATIVES SUBTITLE E-SUBCHAPTER S CORPORATIONS Sec. 541. Qualified pension, etc., plans of small business corporations. 1 4 TITLE VI-STATE AND LOCAL OBLIGATIONS Sec. 601. Interest on certain governmental obligations. Sec. 602. United States to pay fixed percentage of interest yield on taxable issues. TITLE VII-EXTENSION OF TAX SURCHARGE AND EXCISE Sec. 701. Extension of tax surcharge. Sec. 702. Continuation of excise taxes on communications services and on automobiles. Sec. 703. Termination of investment credit. Sec. 704. Amortization of pollution control facilities. Sec. 705. Depreciation of certain railroad rolling stock. TITLE VIII-ADJUSTMENT OF TAX BURDEN FOR INDIVIDUALS Sec. 801. Low income allowance; increase in standard deduction. Sec. 802. Fifty-percent maximum rate on earned income. Sec. 803. Intermediate tax rates; surviving spouse treatment. Sec. 804. Tax rates. Sec. 805. Collection of income tax at source on wages. (c) AMENDMENT OF 1954 CODE.-Except as otherwise 2 expressly provided, whenever in this Act an amendment or 3 repeal is expressed in terms of an amendment to, or repeal of, 4 a section or other provision, the reference shall be considered 5 to be made to a section or other provision of the Internal 6 Revenue Code of 1954. 7 8 9 10 11 TITLE I-TAX EXEMPT ORGANIZATIONS Subtitle A-Private Foundations SEC. 101. PRIVATE FOUNDATIONS. (a) IN GENERAL.-Subchapter F of chapter 1 (relat 12 ing to exempt organizations) is amended by redesignating 13 parts II, III, and IV as parts III, IV, and V, respectively, 14 and by inserting after part I the following new part: 1 5 "PART II-PRIVATE FOUNDATIONS "Sec. 506. Tax on private foundation investment income. "Sec. 509. Private foundation defined. 2 "SEC. 506. TAX ON PRIVATE FOUNDATION INVESTMENT 3 4 INCOME. "(a) IMPOSITION OF TAX.-There is hereby imposed 5 for each taxable year on the net investment income of every 6 private foundation (as defined in section 509) a tax equal 7 to 7 percent of such income. 8 "(b) NET INVESTMENT INCOME Defined.— 9 10 "(1) IN GENERAL.-For purposes of subsection (a), the net investment income is the amount by 11 which (A) the gross investment income and the net 1272 capital gain, exceed (B) the deductions allowed by 13 paragraph (3) and the net capital loss. "(2) GROSS INVESTMENT INCOME.-For purposes of paragraph (1), the term 'gross investment income', means the gross amount of income from interest, divi dends, rents, and royalties, but not including any such income to the extent included in computing the tax imposed by section 511. "(3) DEDUCTIONS.-For purposes of paragraph (1), there shall be allowed as a deduction all the ordi nary and necessary expenses paid or incurred for the production or collection of gross investment income or for the management, conservation, or maintenance of property held for the production of such income. “(4) CAPITAL GAINS AND LOSSES.-For purposes of paragraph (1), in determining net capital gain or loss "(A) The basis 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. "(B) There shall be taken into account only the sale or other disposition of property used for the production of interest, dividends, rents, and royal ties, and property used for the production of income included in computing the tax imposed by section 511 (except to the extent gain or loss from the sale or other disposition of such property is taken into account for purposes of such tax). "SEC. 507. TAX ON TERMINATION OF PRIVATE FOUNDA TION STATUS. "(a) GENERAL RULE.-There is hereby imposed on 23 each organization which is referred to in subsection (d) or 24 25 (e) of section 508 a tax equal to the lower of "(1) the amount which the private foundation |