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at 848-849. Individual seats were installed in FGA in prepara-
tion for the concert productions that MCA intended to put on.
The Museum has offered no aesthetic reasons for installing
individual seats in FGA (a completely earthen structure which
itself can be described as a work of art), and the record
contains no evidence that the facility was upgraded for any
reasons other than commercial ones. Further, we note that the
productions put on by MCA involved popular performers and
commanded premium ticket prices. Finally, the amount of money
involved with the Second Lease was substantial. On the basis of
these facts, we conclude the Museum leased FGA primarily to make
a profit and not to substantially further its exempt purposes.
The Museum argues that, even if the lease proceeds represent
unrelated business income, they fall within the passive real-
estate exception to UBTI. Section 512(b)(3) specifically
excludes real property rents from UBTI. However, in order to
satisfy the passive rent exception, the leasing arrangement must
meet certain guidelines. First, the landlord may not render
substantial services under the lease for the convenience of the
tenant. Sec. 1.512(b)-1(c)(5), Income Tax Regs. Second, the
statute prescribes that the determination of rent must not
depend, in whole or in part, on the income or profits derived by
any person from the leased property (other than an amount based
on a fixed percentage of receipts or sales). Sec.
512(b)(3)(B)(ii). Respondent attacks the arrangement with MCA on
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