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Section 509 provides in pertinent part:
(a) General Rule.--For purposes of this title, the term
"private foundation" means a domestic * * * organization
described in section 501(c)(3) other than--
* * * * * * *
(2) an organization which--
(A) normally receives more than one-third of
its support in each taxable year from any
combination of--
(i) gifts, grants, contributions, or
membership fees, and
(ii) gross receipts from admissions,
sales of merchandise, performance of
services, or furnishing of facilities, in an
activity which is not an unrelated trade or
business (within the meaning of section 513)
* * *
(B) normally receives not more than one-
third of its support in each taxable year from
the sum of--
(i) gross investment income * * * and
(ii) the excess (if any) of the amount
of the unrelated business taxable income (as
defined in section 512) over the amount of
the tax imposed by section 511.
Respondent contends that petitioner is not a publicly
supported organization pursuant to section 509(a)(2) because it
received all of its support from pickle card sales which is an
unrelated trade or business; petitioner must therefore be
characterized as a private foundation. Thus, our determination
hinges upon whether the pickle card sales constitute an unrelated
trade or business.
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Last modified: May 25, 2011