Page:United States Statutes at Large Volume 92 Part 1.djvu/73

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PUBLIC LAW 95-000—MMMM. DD, 1978

PUBLIC LAW 95-227—FEB. 10, 1978

92 STAT. 19

"(B) lending of money or other extension of credit between such a trust and a disqualified person; "(C) furnishing of goods, services, or facilities between such a trust and a disqualified person; "(D) payment of compensation (or payment or reimbursement of expenses) by such a trust to a disqualified person; and

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" (E) transfer to, or use by or for the benefit of, a disquali- *• ' fied person of the income or assets of such a trust. ' "(2) SPECIAL RULES.—For purposes of paragraph (1)— "(A) the transfer of personal property by a disqualified person to such a trust shall be treated as a sale or exchange if the property is subject to a mortgage or similar lien; ' "(B) the furnishing of goods, services, or facilities by a disqualified person to such a trust shall not be an act of selfdealing if the furnishing is without charge and if the goods, services, or facilities so furnished are used exclusively for the purposes specified in section 501(c) (21)(A); and Ante, p. 15. "(C) the payment of compensation (and the payment or • ' reimbursement of expenses) by such a trust to a disqualified person for personal services which are reasonable and necessary to carrying out the exempt purpose of the trust shall not be an act of self-dealing if the compensation (or payment or reimbursement) is not excessive. " (e) DEFINITIONS.—For purposes of this section— "(1) TAXABLE PERIOD.—The term 'taxable period' means, with respect to any act of self-dealing, the period beginning with the date on which the act of self-dealing occurs 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)(1) under section 6212, or "(B) the date on which correction of the act of selfdealing is completed. "(2) AMOUNT INVOLVED.—The term 'amount involved' means, with respect to any act of self-dealing, the greater of the amount of money and the fair market value of the other property given or the amount of money and the fair market value of the other ,?- ' /^ property received; except that in the case of services described in subsection (d)(2)(C), the amount involved shall be only the excess compensation. For purposes of the preceding sentence, the fair market value— "(A) in the case of the taxes imposed by subsection (a), shall be determined as of the date on which the act of selfdealing occurs; and "(B) in the case of taxes imposed by subsection (b), shall be the highest fair market value during the correction period. "(3) CORRECTION.—The terms 'correction' and 'correct' mean, with respect to any act of self-dealing, undoing the transaction to the extent possible, but in any case placing the trust in a financial position not worse than that in which it would be if the disqualified person were dealing under the highest fiduciary standards.