172
INTERNAL REVENUE CODE OF
1964
SEC. 513. UNRELATED TRADE OR BUSINESS. (a) GENERAL RULE, — The term "unrelated
trade or business" means, in the case of any organization subject to the tax imposed by section 511, any trade or business the conduct of which is not substantially related (aside from the need of such organization for income or funds or the use it makes of the profits derived) to the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501 (or, in the case of an organization described in section 511(a)(2)(B), to the exercise or performance of any purpose or function described in section 501(c)(3)), except that such term does not include any trade or business— (1) in which substantially all the work in carrying on such trade or business is performed for the organization without compensation; or (2) which is carried on, in the case of an organization described in section 501(c)(3) or in the case of a college or university described in section 511(a)(2)(B), by the organization primarily for the convenience of its members, students, patients, officers, or employees; or (3) which is the selling of merchandise, substantially all of which has been received by the organization as gifts or contributions. (b) SPECIAL RULE FOR T R U S T S. — The term "unrelated trade or business" means, in the case of— (1) a trust computing its unrelated business taxable income under section 512 for purposes of section 681; or (2) a trust described in section 401(a) which is exempt from tax under section 501(a); any trade or business regularly carried on by such trust or by a partnership of which it is a member. (c) SPECIAL RULE FOR CERTAIN PUBLISHING BUSINESSES.—If
a
publishing business carried on by an organization during a taxable year beginning before January 1, 1953, is, without regard to this subsection, an unrelated trade or business, but before the beginning of the third succeeding taxable year the business is carried on by it (or by a successor who acquired such business in a liquidation which would have constituted a tax-free exchange under section 112(b)(6) of the Internal Revenue Code of 1939) in such manner that the conduct thereof is substantially related to the exercise or performance by such organization (or such successor) of its educational or other purpose or function described in section 501(c)(3), such publishing business shall not be considered, for the taxable year, as an unrelated trade or business. SEC. 514. BUSINESS LEASES. (a) BUSINESS L E A S E R E N T S
AND DEDUCTIONS.—In
computing
under section 512 the unrelated business taxable income for any taxable year— (1) PERCENTAGE OF RENTS TAKEN INTO ACCOUNT.—There shall be included with respect to each business lease, as an item of gross income derived from an unrelated trade or business, an amount which is the same percentage (but not in excess of 100 percent) of the total rents derived during the taxable year under such lease §513
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