Proposed Legislation: Partnerships and Self-Dealing

Proposed Legislation: Partnerships and Self-Dealing

News story posted in Legislative on 11 June 1999| comments
audience: National Publication | last updated: 18 May 2011
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Summary

Rep. Tom Campbell (R-California) has introduced H.R. 1955 which, if passed, will exempt certain transactions between partnerships and private foundations from the private foundation excise tax on self-dealing.

H.R. 1955

PGDC SUMMARY:

Rep. Tom Campbell (R-California), introduced H.R. 1955, which, if passed, will exempt "any transaction between a private foundation and a partnership which is a disqualified person...pursuant to any liquidation, merger, redemption, capitalization, or other partnership adjustment, formation, or reorganization" from the tax on self-dealing and will require the Secretary of the Treasury to establish an exemption procedure from such taxes.

FULL TEXT:

106th CONGRESS
1st Session

H.R. 1955

To amend the Internal Revenue Code of 1986 to exempt certain transactions at fair market value between partnerships and private foundations from the tax on self-dealing and to require the Secretary of the Treasury to establish an exemption procedure from such taxes.

IN THE HOUSE OF REPRESENTATIVES

May 26, 1999

Mr. Campbell introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to exempt certain transactions at fair market value between partnerships and private foundations from the tax on self-dealing and to require the Secretary of the Treasury to establish an exemption procedure from such taxes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. TAX ON SELF-DEALING NOT TO APPLY TO CERTAIN TRANSACTIONS.

(a) Certain Partnership Transactions. -- Paragraph (2) of section 4941(d) of the Internal Revenue Code of 1986 (relating to special rule in respect of self-dealing) is amended by striking "and" at the end of subparagraph (G), by striking the period at the end of subparagraph (H) and inserting "; and", and by inserting after subparagraph (H) the following new subparagraph:

"(I) any transaction between a private foundation and a partnership which is a disqualified person (as defined in section 4946(a)) pursuant to any liquidation, merger, redemption, recapitalization, or other partnership adjustment, formation, or reorganization shall not be an act of self-dealing if all of the partnership interests of the same class as that held by the foundation are subject to the same terms and such terms provide for the receipt by the foundation of no less than fair market value for its partnership interests.".

(b) Exemption Procedure From Taxes on Self-Dealing. -- Subsection (d) of section 4941 of such Code (relating to taxes on self-dealing) is amended by adding at the end the following new paragraph:

"(3) Special exemption. -- The Secretary shall establish an exemption procedure for purposes of this subsection. Pursuant to such procedure, the Secretary may grant a conditional or unconditional exemption of any disqualified person or transaction or class of disqualified persons or transactions, from all or part of the restrictions imposed by paragraph (1). The Secretary may not grant an exemption under this paragraph unless he finds that such exemption is --

"(A) administratively feasible,

"(B) in the interests of the private foundation, and

"(C) protective of the rights of the private foundation.

Before granting an exemption under this paragraph, the Secretary shall require adequate notice to be given to interested persons and shall publish notice in the Federal Register of the pendency of such exemption and shall afford interested persons an opportunity to present views.".

(c) Effective Date. -- The amendments made by this section shall apply to transactions occurring after the date of the enactment of this Act.

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