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          UBTI pursuant to section 512(b)(3), the deriving of such rents is           
          a “trade or business” for all purposes under section 502.                   
               Petitioner does not expressly contend that the subject                 
          regulation is invalid but contends that it is inconsistent with             
          legislative history.  We disagree.                                          
               Before amendment in 1969, both sections 502 (in defining               
          “trade or business” for purposes of the feeder organization                 
          rules) and 512(b)(3) (in defining UBTI) broadly excluded rents              
          from real property and personal property leased with the real               
          property.8  In 1969, Congress acted to curtail perceived abuses             
          involving exempt organizations’ engaging in commercial activity.            
          See Staff of Joint Comm. on Taxation, General Explanation of the            
          Tax Reform Act of 1969, at 62-63 (J. Comm. Print 1970).  To that            
          end, Congress amended section 512(b)(3) to narrow the exclusion             

               8 Before sec. 502 was amended in 1969, it read in its                  
                    An organization operated for the primary purpose                  
               of carrying on a trade or business for profit shall not                
               be exempt under section 501 on the ground that all of                  
               its profits are payable to one or more organizations                   
               exempt under section 501 from taxation.  For purposes                  
               of this section, the term “trade or business” shall not                
               include the rental by an organization of its real                      
               property (including personal property leased with the                  
               real property).                                                        
               Similarly, before amendment in 1969, sec. 512(b)(3) excluded           
          from the definition of “trade or business”, for purposes of                 
          defining UBTI, “all rents from real property (including personal            
          property leased with the real property).”                                   

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