Trusts for benevolent public purpose; general rules
Sec. 21. Subject to the provisions of this section and of section 23
of this chapter, every trust for a benevolent public purpose that is
subject to the provisions of Subchapter A of Chapter 42 of Subtitle
D of the Internal Revenue Code shall:
(1) distribute each taxable year amounts sufficient for such trust
to avoid liability for the tax imposed by Section 4942 of the
Internal Revenue Code, except that this subdivision shall not
apply to split-interest trusts;
(2) not engage in any act of self-dealing (as defined in Section
4941(d) of the Internal Revenue Code) which would subject
such trust to liability for the taxes imposed by Section 4941 of
the Internal Revenue Code;
(3) not retain any excess business holding (as defined in Section
4943(c) of the Internal Revenue Code) which would subject
such trust to liability for the taxes imposed by Section 4943 of
the Internal Revenue Code;
(4) not make any investment which would jeopardize the
carrying out of any of such trust's exempt purposes (within the
meaning of Section 4944 of the Internal Revenue Code) and
which would subject such trust to liability for the taxes imposed
by Section 4944 of the Internal Revenue Code; and
(5) not make any taxable expenditure (as defined in Section
4945(d) of the Internal Revenue Code) which would subject
such trust to liability for the taxes imposed by Section 4945 of
the Internal Revenue Code.
The provisions of this section shall not apply to split-interest trusts
or amounts thereof to the extent that such split-interest trusts and
amounts are not, under Section 4947 of the Internal Revenue Code,
subject to the prohibitions applicable to private foundations.
(Formerly: Acts 1971, P.L.416, SEC.6.) As amended by P.L.2-1987,
SEC.48; P.L.41-2000, SEC.6.
Last modified: May 27, 2006