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exempt function, the fact remains that Congress enacted a
nonrecognition provision that is limited to a narrowly defined
set of circumstances. The benefits of section 512(a)(3)(D) are
limited to gains realized on the sale of property that is used
directly in the performance of the organization's exempt
function. Petitioner has failed to demonstrate that the gain
that it realized on the sale of the 11 homesites fits within the
terms of section 512(a)(3)(D). Moreover, we are not satisfied
that the legislative history relied upon by petitioner rises to
the level of unequivocal evidence of legislative purpose
sufficient to ignore the literal terms of the controlling
statute. Accordingly, we agree with respondent that petitioner
was obligated to recognize and report the gain on its 1987 tax
return.
We have considered petitioner's remaining arguments and find
them unpersuasive. To reflect the foregoing,
Decision will be entered
for respondent.
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