r/title-26-INTERNAL-REVENUE-CODE wiki — defined terms

“LIFO method” applies in that section

The term “LIFO method” means the method provided by section 472(b). (4) Transitional rules (A) In general In the case of a year of change under this section— (i) the inventory pools shall— (I) in the case of the 1st taxable year to which such an election applies, be established in accordance with the major categories in the applicable Government price index, or (II) in the case of the 1st taxable year after such election ceases to apply, be established in the manner provided by regulations under section 472; (ii) the aggregate dollar amount of the taxpayer’s inventory as of the beginning of the year of change shall be the same as the aggregate dollar value as of the close of the taxable …

“major category” applies in that section

The term “major category” means— (A) in the case of the Producer Price Index, any of the 2-digit standard industrial classifications in the Producer Prices Data Report, or (B) in the case of the Consumer Price Index, any of the general expenditure categories in the Consumer Price Index Detailed Report. (c) Eligible small business For purposes of this section, a taxpayer is an eligible small business for any taxable year if the average annual gross receipts of the taxpayer for the 3 preceding taxable years do not exceed $5,000,000. For purposes of the preceding sentence, rules similar to the rules of section 448(c)(3) shall apply.

“commodity” applies in that section

the term “commodity” means— (A) any commodity which is actively traded (within the meaning of section 1092(d)(1)); (B) any notional principal contract with respect to any commodity described in subparagraph (A); (C) any evidence of an interest in, or a derivative instrument in, any commodity described in subparagraph (A) or (B), including any option, forward contract, futures contract, short position, and any similar instrument in such a commodity; and (D) any position which— (i) is not a commodity described in subparagraph (A), (B), or (C), (ii) is a hedge with respect to such a commodity, and (iii) is clearly identified in the taxpayer’s records as being described in this subparagraph …

“dealer in securities” applies in that section

The term “dealer in securities” means a taxpayer who— (A) regularly purchases securities from or sells securities to customers in the ordinary course of a trade or business; or (B) regularly offers to enter into, assume, offset, assign or otherwise terminate positions in securities with customers in the ordinary course of a trade or business. (2) Security defined

“hedge” applies in that section

The term “hedge” means any position which manages the dealer’s risk of interest rate or price changes or currency fluctuations, including any position which is reasonably expected to become a hedge within 60 days after the acquisition of the position. (4) Special rules for certain receivables (A) In general Paragraph (2)(C) shall not include any nonfinancial customer paper. (B) Nonfinancial customer paper For purposes of subparagraph (A),

“nonfinancial customer paper” applies in that section

the term “nonfinancial customer paper” means any receivable which— (i) is a note, bond, debenture, or other evidence of indebtedness; (ii) arises out of the sale of nonfinancial goods or services by a person the principal activity of which is the selling or providing of nonfinancial goods or services; and (iii) is held by such person (or a person who bears a relationship to such person described in section 267(b) or 707(b)) at all times since issue.

“security” applies in that section

The term “security” means any— (A) share of stock in a corporation; (B) partnership or beneficial ownership interest in a widely held or publicly traded partnership or trust; (C) note, bond, debenture, or other evidence of indebtedness; (D) interest rate, currency, or equity notional principal contract; (E) evidence of an interest in, or a derivative financial instrument in, any security described in subparagraph (A), (B), (C), or (D), or any currency, including any option, forward contract, short position, and any similar financial instrument in such a security or currency; and (F) position which— (i) is not a security described in subparagraph (A), (B), (C), (D), or (E), (ii) is a hedge …

“eligible terminated S corporation” applies in that section

the term “eligible terminated S corporation” means any C corporation— (A) which— (i) was an S corporation on the day before the date of the enactment of the Tax Cuts and Jobs Act, and (ii) during the 2-year period beginning on the date of such enactment makes a revocation of its election under section 1362(a), and (B) the owners of the stock of which, determined on the date such revocation is made, are the same owners (and in identical proportions) as on the date of such enactment.

“debt instrument” applies in that section

the term “debt instrument” has the meaning given such term by section 1275(a)(1). (d) Exceptions and limitations (1) Coordination with original issue discount rules This section shall not apply to any debt instrument for which an issue price is determined under section 1273(b) (other than paragraph (4) thereof) or section 1274. (2) Sales prices of $3,000 or less This section shall not apply to any payment on account of the sale or exchange of property if it can be determined at the time of such sale or exchange that the sales price cannot exceed $3,000.

“qualified sale” applies in that section

the term “qualified sale” means any sale or exchange of land by an individual to a member of such individual’s family (within the meaning of section 267(c)(4)). (3) $500,000 limitation Paragraph (1) shall not apply to any qualified sale between individuals made during any calendar year to the extent that the sales price for such sale (when added to the aggregate sales price for prior qualified sales between such individuals during the calendar year) exceeds $500,000. (4) Nonresident alien individuals Paragraph (1) shall not apply to any sale or exchange if any party to such sale or exchange is a nonresident alien individual.

“total unstated interest” applies in that section

the term “total unstated interest” means, with respect to a contract for the sale or exchange of property, an amount equal to the excess of— (1) the sum of the payments to which this section applies which are due under the contract, over (2) the sum of the present values of such payments and the present values of any interest payments due under the contract. For purposes of the preceding sentence, the present value of a payment shall be determined under the rules of section 1274(b)(2) using a discount rate equal to the applicable Federal rate determined under section 1274(d).

“agricultural” applies throughout this title

the term “agricultural” includes the art or science of cultivating land, harvesting crops or aquatic resources, or raising livestock. (h) Expenditures by public charities to influence legislation (1) General rule In the case of an organization to which this subsection applies, exemption from taxation under subsection (a) shall be denied because a substantial part of the activities of such organization consists of carrying on propaganda, or otherwise attempting, to influence legislation, but only if such organization normally— (A) makes lobbying expenditures in excess of the lobbying ceiling amount for such organization for each taxable year, or (B) makes grass roots expenditures in excess …

“asset exchange or conversion transaction” applies in that section

the term “asset exchange or conversion transaction” means any voluntary exchange or involuntary conversion of any property related to generating, transmitting, distributing, or selling electric energy by a mutual or cooperative electric company, the gain from which qualifies for deferred recognition under section 1031 or 1033, but only if the replacement property acquired by such company pursuant to such section constitutes property which is used, or to be used, for— (i) generating, transmitting, distributing, or selling electric energy, or (ii) producing, transmitting, distributing, or selling natural gas.

“base year” applies in that section

the term “base year” means— (I) the calendar year preceding the start-up year, or (II) at the election of the mutual or cooperative electric company, the second or third calendar years preceding the start-up year. (vi) For purposes of this subparagraph, the recovery period is the 7-year period beginning with the start-up year. (vii) For purposes of this subparagraph, the start-up year is the first year that the mutual or cooperative electric company offers nondiscriminatory open access or the calendar year which includes the date of the enactment of this subparagraph, if later, at the election of such company.

“Black Lung Acts” applies in that section

The term “Black Lung Acts” means part C of title IV of the Federal Mine Safety and Health Act of 1977, and any State law providing compensation for disability or death due to that pneumoconiosis.;

“charitable gift annuity” applies in that section

the term “charitable gift annuity” means an annuity if— (A) a portion of the amount paid in connection with the issuance of the annuity is allowable as a deduction under section 170 or 2055, and (B) the annuity is described in section 514(c)(5) (determined as if any amount paid in cash in connection with such issuance were property). (n) Charitable risk pools (1) In general For purposes of this title— (A) a qualified charitable risk pool shall be treated as an organization organized and operated exclusively for charitable purposes, and (B) subsection (m) shall not apply to a qualified charitable risk pool. (2) Qualified charitable risk pool For purposes of this subsection,

“controlled group” applies in that section

the term “controlled group” has the meaning given such term by section 831(b)(2)(B)(ii), 1 except that in applying section 831(b)(2)(B)(ii) 1 for purposes of this subparagraph, subparagraphs (B) and (C) of section 1563(b)(2) shall be disregarded. (16) Corporations organized by an association subject to part IV of this subchapter or members thereof, for the purpose of financing the ordinary crop operations of such members or other producers, and operated in conjunction with such association.

“credit counseling services” applies in that section

The term “credit counseling services” means— (i) the providing of educational information to the general public on budgeting, personal finance, financial literacy, saving and spending practices, and the sound use of consumer credit, (ii) the assisting of individuals and families with financial problems by providing them with counseling, or (iii) a combination of the activities described in clauses (i) and (ii). (B) Debt management plan services

“debt management plan services” applies in that section

The term “debt management plan services” means services related to the repayment, consolidation, or restructuring of a consumer’s debt, and includes the negotiation with creditors of lower interest rates, the waiver or reduction of fees, and the marketing and processing of debt management plans.

“dependent” applies in that section

the term “dependent” shall include any individual who is a child (as defined in section 152(f)(1)) of a member who as of the end of the calendar year has not attained age 27. (10) Domestic fraternal societies, orders, or associations, operating under the lodge system— (A) the net earnings of which are devoted exclusively to religious, charitable, scientific, literary, educational, and fraternal purposes, and (B) which do not provide for the payment of life, sick, accident, or other benefits.

“educational purposes” applies in that section

the term “educational purposes” includes the providing of care of children away from their homes if— (1) substantially all of the care provided by the organization is for purposes of enabling individuals to be gainfully employed, and (2) the services provided by the organization are available to the general public. (l) Government corporations exempt under subsection (c)(1) For purposes of subsection (c)(1), the following organizations are described in this subsection: (1) The Central Liquidity Facility established under title III of the Federal Credit Union Act ( 12 U.S.C. 1795 et seq.). (2) The Resolution Trust Corporation established under section 21A 1 of the Federal Home Loan Bank Act.

“FERC” applies in that section

the term “FERC” means— (i) the Federal Energy Regulatory Commission, or (ii) in the case of any utility with respect to which all of the electricity generated, transmitted, or distributed by such utility is generated, transmitted, distributed, and consumed in the same State, the State agency of such State with the authority to regulate electric utilities. (F) For purposes of subparagraph (C)(iv),

“grass roots expenditures” applies in that section

The term “grass roots expenditures” means expenditures for the purpose of influencing legislation (as defined in section 4911(d) without regard to paragraph (1)(B) thereof). (D) Grass roots ceiling amount The grass roots ceiling amount for any organization for any taxable year is 150 percent of the grass roots nontaxable amount for such organization for such taxable year, determined under section 4911.

“incidental expenses” applies in that section

The term “incidental expenses” includes legal, accounting, actuarial, and trustee expenses. (22) A trust created or organized in the United States and established in writing by the plan sponsors of multiemployer plans if— (A) the purpose of such trust is exclu­sively— (i) to pay any amount described in section 4223(c) or (h) of the Employee Retirement Income Security Act of 1974, and (ii) to pay reasonable and necessary administrative expenses in connection with the establishment and operation of the trust and the processing of claims against the trust, (B) no part of the assets of the trust may be used for, or diverted to, any purpose other than— (i) the purposes described in subparagraph …

“load loss transaction” applies in that section

the term “load loss transaction” means any wholesale or retail sale of electric energy (other than to members) to the extent that the aggregate sales during the recovery period do not exceed the load loss mitigation sales limit for such period. (iii) For purposes of clause (ii), the load loss mitigation sales limit for the recovery period is the sum of the annual load losses for each year of such period.

“lobbying expenditures” applies in that section

The term “lobbying expenditures” means expenditures for the purpose of influencing legislation (as defined in section 4911(d)). (B) Lobbying ceiling amount The lobbying ceiling amount for any organization for any taxable year is 150 percent of the lobbying nontaxable amount for such organization for such taxable year, determined under section 4911. (C) Grass roots expenditures

“miner” applies in that section

The term “miner” has the same meaning as such term has when used in section 402(d) of the Black Lung Benefits Act ( 30 U.S.C. 902(d) ).;

“nonmember charitable organization” applies in that section

The term “nonmember charitable organization” means any organization which is described in subsection (c)(3) and exempt from tax under subsection (a) and which is not a member of the risk pool and does not benefit (directly or indirectly) from the insurance coverage provided by the pool to its members.

“nuclear decommissioning transaction” applies in that section

the term “nuclear decommissioning transaction” means— (i) any transfer into a trust, fund, or instrument established to pay any nuclear decommissioning costs if the transfer is in connection with the transfer of the mutual or cooperative electric company’s interest in a nuclear power plant or nuclear power plant unit, (ii) any distribution from any trust, fund, or instrument established to pay any nuclear decommissioning costs, or (iii) any earnings from any trust, fund, or instrument established to pay any nuclear decommissioning costs. (G) For purposes of subparagraph (C)(v),

“qualified amateur sports organization” applies in that section

the term “qualified amateur sports organization” means any organization organized and operated exclusively to foster national or international amateur sports competition if such organization is also organized and operated primarily to conduct national or international competition in sports or to support and develop amateur athletes for national or international competition in sports. (k) Treatment of certain organizations providing child care For purposes of subsection (c)(3) of this section and sections 170(c)(2), 2055(a)(2), and 2522(a)(2),

“qualified charitable risk pool” applies in that section

the term “qualified charitable risk pool” means any organization— (A) which is organized and operated solely to pool insurable risks of its members (other than risks related to medical malpractice) and to provide information to its members with respect to loss control and risk management, (B) which is comprised solely of members that are organizations described in subsection (c)(3) and exempt from tax under subsection (a), and (C) which meets the organizational requirements of paragraph (3).

“qualified investments” applies in that section

The term “qualified investments” means— (I) public debt securities of the United States, (II) obligations of a State or local government which are not in default as to principal or interest, and (III) time or demand deposits in a bank (as defined in section 581) or an insured credit union (within the meaning of section 101(7) of the Federal Credit Union Act, 12 U.S.C. 1752(7) ) located in the United States.;

“qualified pole rental” applies in that section

the term “qualified pole rental” means any rental of a pole (or other structure used to support wires) if such pole (or other structure)— (i) is used by the telephone or electric company to support one or more wires which are used by such company in providing telephone or electric services to its members, and (ii) is used pursuant to the rental to support one or more wires (in addition to the wires described in clause (i)) for use in connection with the transmission by wire of electricity or of telephone or other communications. For purposes of the preceding sentence,

“qualified subsidiary” applies throughout this title

the term “qualified subsidiary” means any corporation if, at all times during the period such corporation was in existence, 100 percent of the stock of such corporation is held by the corporation or trust described in subparagraph (A). (iii) For purposes of this subtitle, if any corporation which was a qualified subsidiary ceases to meet the requirements of clause (ii), such corporation shall be treated as a new corporation acquiring all of its assets (and assuming all of its liabilities) immediately before such cessation from the corporation or trust described in subparagraph (A) in exchange for its stock. (F) For purposes of subparagraph (A),

“real property” applies throughout this title

the term “real property” includes any personal property which is leased under, or in connection with, a lease of real property, but only if the rent attributable to such personal property (determined under the rules of section 856(d)(1)) for the taxable year does not exceed 15 percent of the total rent for the taxable year attributable to both the real and personal property leased under, or in connection with, such lease. (G) (i) An organization shall not be treated as failing to be described in this paragraph merely by reason of the receipt of any otherwise disqualifying income which is incidentally derived from the holding of real property.

“rental” applies in that section

the term “rental” includes any sale of the right to use the pole (or other structure). (E) For purposes of subparagraph (C)(ii),

“startup capital” applies in that section

The term “startup capital” means any capital contributed to, and any program-related investments (within the meaning of section 4944(c)) made in, the risk pool before such pool commences operations. (B) Nonmember charitable organization

“supplemental unemployment compensation benefits” applies in that section

The term “supplemental unemployment compensation benefits” means only— (i) benefits which are paid to an employee because of his involuntary separation from the employment of the employer (whether or not such separation is temporary) resulting directly from a reduction in force, the discontinuance of a plant or operation, or other similar conditions, and (ii) sick and accident benefits subordinate to the benefits described in clause (i).

“prohibited transaction” applies in that section

the term “prohibited transaction” means any transaction in which an organization subject to the provisions of this section— (1) lends any part of its income or corpus, without the receipt of adequate security and a reasonable rate of interest, to; (2) pays any compensation, in excess of a reasonable allowance for salaries or other compensation for personal services actually rendered, to; (3) makes any part of its services available on a preferential basis to; (4) makes any substantial purchase of securities or any other property, for more than adequate consideration in money or money’s worth, from; (5) sells any substantial part of its securities or other property, for less than an adequate …

“trustee” applies in that section

the term “trustee” means, with respect to any trust for which there is more than one trustee who is independent of the employer, a majority of such independent trustees. For purposes of paragraph (3), the determination as to whether any amount loaned by the trust to the employer is loaned without the receipt of adequate security shall be made without regard to subsection (e).

“compensation” applies in that section

the term “compensation” has the meaning given such term by section 414(s). (7) Compensation limit A plan shall not be treated as meeting the requirements of this subsection unless under the plan the annual compensation of each employee taken into account for any year does not exceed $200,000. The Secretary shall adjust the $200,000 amount at the same time, and by the same amount, as any adjustment under section 401(a)(17)(B). This paragraph shall not apply in determining whether the requirements of section 79(d) are met.

“related person” applies throughout its part

the term “related person” means, with respect to any person, any other person who would be a disqualified person (within the meaning of section 4946) by reason of his relationship to such person. In the case of a contributor which is a corporation, the term also includes any officer or director of such corporation. (3) Regulations For purposes of this section, the determination as to whether and to what extent there would have been any increase in tax shall be made in accordance with regulations prescribed by the Secretary.

“substantial contributor” applies throughout its part

the term “substantial contributor” means any person who contributed or bequeathed an aggregate amount of more than $5,000 to the private foundation, if such amount is more than 2 percent of the total contributions and bequests received by the foundation before the close of the taxable year of the foundation in which the contribution or bequest is received by the foundation from such person. In the case of a trust, the term “substantial contributor” also means the creator of the trust.

“gross investment income” applies throughout its part

the term “gross investment income” means the gross amount of income from interest, dividends, payments with respect to securities loans (as defined in section 512(a)(5)), rents, and royalties, but not including any such income to the extent included in computing the tax imposed by section 511. Such term shall also include income from sources similar to those in the preceding sentence.

“private foundation” applies throughout this title

the term “private foundation” means a domestic or foreign organization described in section 501(c)(3) other than— (1) an organization described in section 170(b)(1)(A) (other than in clauses (vii) and (viii)); (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), not including such receipts from any person, or from any bureau or similar agency of a …

“support” applies throughout its part

the term “support” includes (but is not limited to)— (1) gifts, grants, contributions, or membership fees, (2) gross receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities in any activity which is not an unrelated trade or business (within the meaning of section 513), (3) net income from unrelated business activities, whether or not such activities are carried on regularly as a trade or business, (4) gross investment income (as defined in subsection (e)), (5) tax revenues levied for the benefit of an organization and either paid to or expended on behalf of such organization, and (6) the value of services or facilities (exclusive of services or …

“supported organization” applies in that section

the term “supported organization” means, with respect to an organization described in subsection (a)(3), an organization described in paragraph (1) or (2) of subsection (a)— (A) for whose benefit the organization described in subsection (a)(3) is organized and operated, or (B) with respect to which the organization performs the functions of, or carries out the purposes of.

“control” applies in that section

The term “control” means— (I) in the case of a corporation, ownership (by vote or value) of more than 50 percent of the stock in such corporation, (II) in the case of a partnership, ownership of more than 50 percent of the profits interests or capital interests in such partnership, or (III) in any other case, ownership of more than 50 percent of the beneficial interests in the entity. (ii) Constructive ownership .— Section 318 (relating to constructive ownership of stock) shall apply for purposes of determining ownership of stock in a corporation. Similar principles shall apply for purposes of determining ownership of interests in any other entity.

“dues” applies in that section

the term “dues” means any payment (whether or not designated as dues) which is required to be made in order to be recognized by the organization as a member of the organization. (e) Special rules applicable to S corporations (1) In general If an organization described in section 1361(c)(2)(A)(vi) or 1361(c)(6) holds stock in an S corporation— (A) such interest shall be treated as an interest in an unrelated trade or business, and (B) notwithstanding any other provision of this part— (i) all items of income, loss, or deduction taken into account under section 1366(a), and (ii) any gain or loss on the disposition of the stock in the S corporation, shall be taken into account in computing the …

“eligible remediation expenditures” applies in that section

The term “eligible remediation expenditures” means, with respect to any qualifying brownfield property, any amount paid or incurred by the eligible taxpayer to an unrelated third person to obtain a Phase I environmental site assessment of the property, and any amount so paid or incurred after the date of the certification described in subparagraph (C)(i) for goods and services necessary to obtain a certification described in subparagraph (D)(i) with respect to such property, including expenditures— (I) to manage, remove, control, contain, abate, or otherwise remediate a hazardous substance, pollutant, or contaminant on the property, (II) to obtain a Phase II environmental site assessment of …

“eligible taxpayer” applies in that section

The term “eligible taxpayer” means, with respect to a property, any organization exempt from tax under section 501(a) which— (I) acquires from an unrelated person a qualifying brownfield property, and (II) pays or incurs eligible remediation expenditures with respect to such property in an amount which exceeds the greater of $550,000 or 12 percent of the fair market value of the property at the time such property was acquired by the eligible taxpayer, determined as if there was not a presence of a hazardous substance, pollutant, or contaminant on the property which is complicating the expansion, redevelopment, or reuse of the property.

“exempt function income” applies in that section

the term “exempt function income” means the gross income from dues, fees, charges, or similar amounts paid by members of the organization as consideration for providing such members or their dependents or guests goods, facilities, or services in furtherance of the purposes constituting the basis for the exemption of the organization to which such income is paid.

“net unrelated income” applies in that section

The term “net unrelated income” means— (I) in the case of a controlled entity which is not exempt from tax under section 501(a), the portion of such entity’s taxable income which would be unrelated business taxable income if such entity were exempt from tax under section 501(a) and had the same exempt purposes as the controlling organization, or (II) in the case of a controlled entity which is exempt from tax under section 501(a), the amount of the unrelated business taxable income of the controlled entity. (ii) Net unrelated loss .—

“net unrelated loss” applies in that section

The term “net unrelated loss” means the net operating loss adjusted under rules similar to the rules of clause (i). (C) Specified payment .— For purposes of this paragraph,

“payments with respect to securities loans” applies in that section

The term “payments with respect to securities loans” includes all amounts received in respect of a security (as defined in section 1236(c)) transferred by the owner to another person in a transaction to which section 1058 applies (whether or not title to the security remains in the name of the lender) including— (i) amounts in respect of dividends, interest, or other distributions, (ii) fees computed by reference to the period beginning with the transfer of securities by the owner and ending with the transfer of identical securities back to the transferor by the transferee and the fair market value of the security during such period, (iii) income from collateral security for such loan, and …

“qualifying brownfield property” applies in that section

The term “qualifying brownfield property” means any real property which is certified, before the taxpayer incurs any eligible remediation expenditures (other than to obtain a Phase I environmental site assessment), by an appropriate State agency (within the meaning of section 198(c)(4)) in the State in which such property is located as a brownfield site within the meaning of section 101(39) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (as in effect on the date of the enactment of this paragraph).

“qualifying partnership” applies in that section

The term “qualifying partnership” means a partnership which— (I) has a partnership agreement which satisfies the requirements of section 514(c)(9)(B)(vi) at all times beginning on the date of the first certification received by the partnership under subparagraph (C)(i), (II) satisfies the requirements of subparagraphs (B)(i), (C), (D), and (E), if “qualified partnership” is substituted for “eligible taxpayer” each place it appears therein (except subparagraph (D)(iii)), and (III) is not an organization which would be prevented from constituting an eligible taxpayer by reason of subparagraph (B)(ii).

“qualifying specified payment” applies in that section

The term “qualifying specified payment” means a specified payment which is made pursuant to— (I) a binding written contract in effect on the date of the enactment of this subparagraph, or (II) a contract which is a renewal, under substantially similar terms, of a contract described in subclause (I). (F) Related persons .— The Secretary shall prescribe such rules as may be necessary or appropriate to prevent avoidance of the purposes of this paragraph through the use of related persons. [(14) Repealed. Pub. L. 101–508, title XI, § 11801(a)(23) , Nov. 5, 1990 , 104 Stat.

“reserve for post-retirement medical or life insurance benefits” applies in that section

the term “reserve for post-retirement medical or life insurance benefits” means the greater of the amount of assets set aside for purposes of post-retirement medical or life insurance benefits to be provided to covered employees as of the close of the last plan year ending before the date of the enactment of the Tax Reform Act of 1984 or on July 18, 1984 . (III) All payments during plan years ending on or after the date of the enactment of the Tax Reform Act of 1984 of post-retirement medical benefits or life insurance benefits shall be charged against the reserve referred to in subclause (II).

“specified payment” applies in that section

the term “specified payment” means any interest, annuity, royalty, or rent. (D) Definition of control .— For purposes of this paragraph— (i) Control .—

“unrelated business taxable income” applies in that section

the term “unrelated business taxable income” means the gross income derived by any organization from any unrelated trade or business (as defined in section 513) regularly carried on by it, less the deductions allowed by this chapter which are directly connected with the carrying on of such trade or business, both computed with the modifications provided in subsection (b).

“bingo game” applies in that section

the term “bingo game” means any game of bingo— (A) of a type in which usually— (i) the wagers are placed, (ii) the winners are determined, and (iii) the distribution of prizes or other property is made, in the presence of all persons placing wagers in such game, (B) the conducting of which is not an activity ordinarily carried out on a commercial basis, and (C) the conducting of which does not violate any State or local law. (g) Certain pole rentals In the case of a mutual or cooperative telephone or electric company, the term “unrelated trade or business” does not include engaging in qualified pole rentals (as defined in section 501(c)(12)(D)).

“convention and trade show activity” applies in that section

The term “convention and trade show activity” means any activity of a kind traditionally conducted at conventions, annual meetings, or trade shows, including, but not limited to, any activity one of the purposes of which is to attract persons in an industry generally (without regard to membership in the sponsoring organization) as well as members of the public to the show for the purpose of displaying industry products or to stimulate interest in, and demand for, industry products or services, or to educate persons engaged in the industry in the development of new products and services or new rules and regulations affecting the industry. (B) Qualified convention and trade show activity

“low cost article” applies in that section

The term “low cost article” means any article which has a cost not in excess of $5 to the organization which distributes such item (or on whose behalf such item is distributed). (B) Aggregation rule If more than 1 item is distributed by or on behalf of an organization to a single distributee in any calendar year, the aggregate of the items so distributed in such calendar year to such distributee shall be treated as 1 article for purposes of subparagraph (A).

“public entertainment activity” applies in that section

The term “public entertainment activity” means any entertainment or recreational activity of a kind traditionally conducted at fairs or expositions promoting agricultural and educational purposes, including, but not limited to, any activity one of the purposes of which is to attract the public to fairs or expositions or to promote the breeding of animals or the development of products or equipment. (B) Qualified public entertainment activity

“qualified convention and trade show activity” applies in that section

The term “qualified convention and trade show activity” means a convention and trade show activity carried out by a qualifying organization described in subparagraph (C) in conjunction with an international, national, State, regional, or local convention, annual meeting, or show conducted by an organization described in subparagraph (C) if one of the purposes of such organization in sponsoring the activity is the promotion and stimulation of interest in, and demand for, the products and services of that industry in general or to educate persons in attendance regarding new developments or products and services related to the exempt activities of the organization, and the show is designed to …

“qualified public entertainment activity” applies in that section

The term “qualified public entertainment activity” means a public entertainment activity which is conducted by a qualifying organization described in subparagraph (C) in— (i) conjunction with an international, national, State, regional, or local fair or exposition, (ii) accordance with the provisions of State law which permit the activity to be operated or conducted solely by such an organization, or by an agency, instrumentality, or political subdivision of such State, or (iii) accordance with the provisions of State law which permit such an organization to be granted a license to conduct not more than 20 days of such activity on payment to the State of a lower percentage of the revenue …

“qualified sponsorship payment” applies in that section

The term “qualified sponsorship payment” means any payment made by any person engaged in a trade or business with respect to which there is no arrangement or expectation that such person will receive any substantial return benefit other than the use or acknowledgement of the name or logo (or product lines) of such person’s trade or business in connection with the activities of the organization that receives such payment.

“qualifying organization” applies in that section

the term “qualifying organization” means an organization which is described in section 501(c) (3), (4), or (5) which regularly conducts, as one of its substantial exempt purposes, an agricultural and educational fair or exposition. (3) Qualified convention and trade show activities (A) Convention and trade show activities

“trade or business” applies in that section

the term “trade or business” includes any activity which is carried on for the production of income from the sale of goods or the performance of services. For purposes of the preceding sentence, an activity does not lose identity as a trade or business merely because it is carried on within a larger aggregate of similar activities or within a larger complex of other endeavors which may, or may not, be related to the exempt purposes of the organization. Where an activity carried on for profit constitutes an unrelated trade or business, no part of such trade or business shall be excluded from such classification merely because it does not result in profit.

“unrelated trade or business” applies in that section

The term “unrelated trade or business” means, in the case of any organization subject to the tax imposed by section 511, any trade or business the conduct of which is not substantially related (aside from the need of such organization for income or funds or the use it makes of the profits derived) to the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501 (or, in the case of an organization described in section 511(a)(2)(B), to the exercise or performance of any purpose or function described in section 501(c)(3)), except that such term does not include any trade or business— (1) …

“acquisition indebtedness” applies in that section

the term “acquisition indebtedness” means, with respect to any debt-financed property, the unpaid amount of— (A) the indebtedness incurred by the organization in acquiring or improving such property; (B) the indebtedness incurred before the acquisition or improvement of such property if such indebtedness would not have been incurred but for such acquisition or improvement; and (C) the indebtedness incurred after the acquisition or improvement of such property if such indebtedness would not have been incurred but for such acquisition or improvement and the incurrence of such indebtedness was reasonably foreseeable at the time of such acquisition or improvement.

“debt-financed property” applies in that section

the term “debt-financed property” means any property which is held to produce income and with respect to which there is an acquisition indebtedness (as defined in subsection (c)) at any time during the taxable year (or, if the property was disposed of during the taxable year, with respect to which there was an acquisition indebtedness at any time during the 12-month period ending with the date of such disposition), except that such term does not include— (A) (i) any property substantially all the use of which is substantially related (aside from the need of the organization for income or funds) to the exercise or performance by such organization of its charitable, educational, or other …

“disqualified holder” applies in that section

the term “disqualified holder” means any shareholder (or beneficiary) which is not described in clause (i) or (ii) of subparagraph (C). (G) Special rules for purposes of the exceptions Except as otherwise provided by regulations— (i) Small leases disregarded For purposes of clauses (iii) and (iv) of subparagraph (B), a lease to a person described in such clause (iii) or (iv) shall be disregarded if no more than 25 percent of the leasable floor space in a building (or complex of buildings) is covered by the lease and if the lease is on commercially reasonable terms.

“financial institution” applies in that section

the term “financial institution” means— (I) any financial institution described in section 581 or 591(a), (II) any other corporation which is a direct or indirect subsidiary of an institution referred to in subclause (I) but only if, by virtue of being affiliated with such institution, such other corporation is subject to supervision and examination by a Federal or State agency which regulates institutions referred to in subclause (I), and (III) any person acting as a conservator or receiver of an entity referred to in subclause (I) or (II) (or any government agency or corporation succeeding to the rights or interest of such person).

“foreclosure property” applies in that section

the term “foreclosure property” means any real property acquired by the financial institution as the result of having bid on such property at foreclosure, or by operation of an agreement or process of law, after there was a default (or a default was imminent) on indebtedness which such property secured.

“qualified organization” applies in that section

the term “qualified organization” means— (i) an organization described in section 170(b)(1)(A)(ii) and its affiliated support organizations described in section 509(a)(3); (ii) any trust which constitutes a qualified trust under section 401; (iii) an organization described in section 501(c)(25); or (iv) a retirement income account described in section 403(b)(9). (D) Other pass-thru entities; tiered entities Rules similar to the rules of subparagraph (B)(vi) shall also apply in the case of any pass-thru entity other than a partnership and in the case of tiered partnerships and other entities.

“real property” applies in that section

the term “real property” includes personal property of the lessor leased by it to a lessee of its real estate if the lease of such personal property is made under, or in connection with, the lease of such real estate. (g) Regulations The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations to prevent the circumvention of any provision of this section through the use of segregated asset accounts.

“candidate” applies in that section

the term “candidate” means, with respect to any Federal, State, or local elective public office, an individual who— (A) publicly announces that he is a candidate for nomination or election to such office, and (B) meets the qualifications prescribed by law to hold such office. (h) Special rule for principal campaign committees (1) In general In the case of a political organization, which is a principal campaign committee, paragraph (1) of subsection (b) shall be applied by substituting “the appropriate rates” for “the highest rate”. (2) Principal campaign committee defined (A) In general For purposes of this subsection,

“contributions” applies in that section

The term “contributions” has the meaning given to such term by section 271(b)(2). (4) Expenditures

“election” applies in that section

the term “election” means— (A) a general, special, primary, or runoff election for a Federal office, (B) a convention or caucus of a political party which has authority to nominate a candidate for Federal office, (C) a primary election held for the selection of delegates to a national nominating convention of a political party, or (D) a primary election held for the expression of a preference for the nomination of individuals for election to the office of President. (7) Electronic filing Any report required under paragraph (2) with respect to any calendar year shall be filed in electronic form.

“exempt function” applies in that section

The term “exempt function” means the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local public office or office in a political organization, or the election of Presidential or Vice-Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. Such term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under section 162(a). (3) Contributions

“exempt function income” applies in that section

the term “exempt function income” means any amount received as— (A) a contribution of money or other property, (B) membership dues, a membership fee or assessment from a member of the political organization, (C) proceeds from a political fundraising or entertainment event, or proceeds from the sale of political campaign materials, which are not received in the ordinary course of any trade or business, or (D) proceeds from the conducting of any bingo game (as defined in section 513(f)(2)), to the extent such amount is segregated for use only for the exempt function of the political organization.

“expenditures” applies in that section

The term “expenditures” has the meaning given to such term by section 271(b)(3). (5) Qualified State or local political organization (A) In general

“net investment income” applies in that section

the term “net investment income” means the excess of— (A) the gross amount of income from interest, dividends, rents, and royalties, plus the excess (if any) of gains from the sale or exchange of assets over the losses from the sale or exchange of assets, over (B) the deductions allowed by this chapter which are directly connected with the production of the income referred to in subparagraph (A). For purposes of the preceding sentence, there shall not be taken into account items taken into account for purposes of the tax imposed by section 511 (relating to tax on unrelated business income).

“political organization” applies in that section

The term “political organization” means a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. (2) Exempt function

“principal campaign committee” applies in that section

the term “principal campaign committee” means the political committee designated by a candidate for Congress as his principal campaign committee for purposes of— (i) section 302(e) of the Federal Election Campaign Act of 1971 ( 52 U.S.C. 30102(e) ), and (ii) this subsection. (B) Designation A candidate may have only 1 designation in effect under subparagraph (A)(ii) at any time and such designation— (i) shall be made at such time and in such manner as the Secretary may prescribe by regulations, and (ii) once made, may be revoked only with the consent of the Secretary.

“qualified State or local political organization” applies in that section

The term “qualified State or local political organization” means a political organization— (i) all the exempt functions of which are solely for the purposes of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any State or local public office or office in a State or local political organization, (ii) which is subject to State law that requires the organization to report (and it so reports)— (I) information regarding each separate expenditure from and contribution to such organization, and (II) information regarding the person who makes such contribution or receives such expenditure, which would otherwise be required to be …

“association property” applies in that section

The term “association property” means— (A) property held by the organization, (B) property commonly held by the members of the organization, (C) property within the organization privately held by the members of the organization, and (D) property owned by a governmental unit and used for the benefit of residents of such unit. In the case of a timeshare association, such term includes property in which the timeshare association, or members of the association, have rights arising out of recorded easements, covenants, or other recorded instruments to use property related to the timeshare project.

“condominium management association” applies in that section

The term “condominium management association” means any organization meeting the requirement of subparagraph (A) of paragraph (1) with respect to a condominium proj­ect substantially all of the units of which are used by individuals for residences. (3) Residential real estate management association

“exempt function income” applies in that section

the term “exempt function income” means any amount received as membership dues, fees, or assessments from— (A) owners of condominium housing units in the case of a condominium management association, (B) owners of real property in the case of a residential real estate management association, or (C) owners of timeshare rights to use, or timeshare ownership interests in, real property in the case of a timeshare association.

“homeowners association” applies in that section

The term “homeowners association” means an organization which is a condominium management association, a residential real estate management association, or a timeshare association if— (A) such organization is organized and operated to provide for the acquisition, construction, management, maintenance, and care of association property, (B) 60 percent or more of the gross income of such organization for the taxable year consists solely of amounts received as membership dues, fees, or assessments from— (i) owners of residential units in the case of a condominium management association, (ii) owners of residences or residential lots in the case of a residential real estate management …

“residential real estate management association” applies in that section

The term “residential real estate management association” means any organization meeting the requirements of subparagraph (A) of paragraph (1) with respect to a subdivision, development, or similar area substantially all the lots or buildings of which may only be used by individuals for residences. (4) Timeshare association

“timeshare association” applies in that section

The term “timeshare association” means any organization (other than a condominium management association) meeting the requirement of subparagraph (A) of paragraph (1) if any member thereof holds a timeshare right to use, or a timeshare ownership interest in, real property constituting association property. (5) Association property

“designated beneficiary” applies in that section

The term “designated beneficiary” means— (A) the individual designated at the commencement of participation in the qualified tuition program as the beneficiary of amounts paid (or to be paid) to the program, (B) in the case of a change in beneficiaries described in subsection (c)(3)(C), the individual who is the new beneficiary, and (C) in the case of an interest in a qualified tuition program purchased by a State or local government (or agency or instrumentality thereof) or an organization described in section 501(c)(3) and exempt from taxation under section 501(a) as part of a scholarship program operated by such government or organization, the individual receiving such interest as a …

“eligible educational institution” applies in that section

The term “eligible educational institution” means an institution— (A) which is described in section 481 of the Higher Education Act of 1965 ( 20 U.S.C. 1088 ), as in effect on the date of the enactment of this paragraph, and (B) which is eligible to participate in a program under title IV of such Act. (f) Qualified postsecondary credentialing expenses For purposes of this section— (1) In general

“member of the family” applies in that section

The term “member of the family” means, with respect to any designated beneficiary— (A) the spouse of such beneficiary; (B) an individual who bears a relationship to such beneficiary which is described in subparagraphs (A) through (G) of section 152(d)(2); (C) the spouse of any individual described in subparagraph (B); and (D) any first cousin of such beneficiary. (3) Qualified higher education expenses (A) In general

“qualified higher education expense” applies in that section

the term “qualified higher education expense” shall include a reference to the following expenses in connection with enrollment or attendance at, or for students enrolled at or attending, an elementary or secondary public, private, or religious school: (A) Tuition. (B) Curriculum and curricular materials. (C) Books or other instructional materials. (D) Online educational materials.

“qualified higher education expenses” applies in that section

The term “qualified higher education expenses” means— (i) tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution, (ii) expenses for special needs services in the case of a special needs beneficiary which are incurred in connection with such enrollment or attendance, and (iii) expenses for the purchase of computer or peripheral equipment (as defined in section 168(i)(2)(B)), computer software (as defined in section 197(e)(3)(B)), or Internet access and related services, if such equipment, software, or services are to be used primarily by the beneficiary during any of the years the beneficiary …

“qualified postsecondary credentialing expenses” applies in that section

The term “qualified postsecondary credentialing expenses” means— (A) tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary in a recognized postsecondary credential program, or any other expense incurred in connection with enrollment in or attendance at a recognized postsecondary credential program if such expense would, if incurred in connection with enrollment or attendance at an eligible educational institution, be covered under subsection (e)(3)(A), (B) fees for testing if such testing is required to obtain or maintain a recognized postsecondary credential, and (C) fees for continuing education if such education is required to …

“qualified trust” applies in that section

the term “qualified trust” means a trust which is created or organized in the United States for the exclusive benefit of designated beneficiaries and with respect to which the requirements of paragraphs (2) and (5) of section 408(a) are met. (2) Cash contributions A program shall not be treated as a qualified tuition program unless it provides that purchases or contributions may only be made in cash. (3) Separate accounting A program shall not be treated as a qualified tuition program unless it provides separate accounting for each designated beneficiary.

“qualified tuition program” applies in that section

The term “qualified tuition program” means a program established and maintained by a State or agency or instrumentality thereof or by 1 or more eligible educational institutions— (A) under which a person— (i) may purchase tuition credits or certificates on behalf of a designated beneficiary which entitle the beneficiary to the waiver or payment of qualified higher education expenses of the beneficiary, or (ii) in the case of a program established and maintained by a State or agency or instrumentality thereof, may make contributions to an account which is established for the purpose of meeting the qualified higher education expenses of the designated beneficiary of the account, and (B) which …

“recognized postsecondary credential” applies in that section

The term “recognized postsecondary credential” means— (A) any postsecondary employment credential that is industry recognized and is— (i) any postsecondary employment credential issued by a program that is accredited by the Institute for Credentialing Excellence, the National Commission on Certifying Agencies, or the American National Standards Institute, (ii) any postsecondary employment credential that is included in the Credentialing Opportunities On-Line (COOL) directory of credentialing programs (or successor directory) maintained by the Department of Defense or by any branch of the Armed Forces, or (iii) any postsecondary employment credential identified for purposes of this clause by …

“recognized postsecondary credential program” applies in that section

The term “recognized postsecondary credential program” means any program to obtain a recognized postsecondary credential if— (A) such program is included on a State list prepared under section 122(d) of the Workforce Innovation and Opportunity Act ( 29 U.S.C.

“sibling” applies in that section

the term “sibling” means an individual who bears a relationship to the designated beneficiary which is described in section 152(d)(2)(B). (d) Reports (1) In general Each officer or employee having control of the qualified tuition program or their designee shall make such reports regarding such program to the Secretary and to designated beneficiaries with respect to contributions, distributions, and such other matters as the Secretary may require. The reports required by this paragraph shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required by the Secretary.

“ABLE account” applies in that section

The term “ABLE account” means an account established by an eligible individual, owned by such eligible individual, and maintained under a qualified ABLE program. (f) Transfer to State Subject to any outstanding payments due for qualified disability expenses, upon the death of the designated beneficiary, all amounts remaining in the qualified ABLE account not in excess of the amount equal to the total medical assistance paid for the designated beneficiary after the establishment of the account, net of any premiums paid from the account or paid by or on behalf of the beneficiary to a Medicaid Buy-In program under any State Medicaid plan established under title XIX of the Social Security Act, …

“disability certification” applies in that section

The term “disability certification” means, with respect to an individual, a certification to the satisfaction of the Secretary by the individual or the parent or guardian of the individual that— (i) certifies that— (I) the individual has a medically determinable physical or mental impairment, which results in marked and severe functional limitations, and which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, or is blind (within the meaning of section 1614(a)(2) of the Social Security Act), and (II) such blindness or disability occurred before the date on which the individual attained age 46, and (ii) …

“member of the family” applies in that section

The term “member of the family” means, with respect to any designated beneficiary, an individual who bears a relationship to such beneficiary which is described in section 152(d)(2)(B). For purposes of the preceding sentence, a rule similar to the rule of section 152(f)(1)(B) shall apply. (5) Qualified disability expenses

“poverty line” applies in that section

The term “poverty line” has the meaning given such term by section 673 of the Community Services Block Grant Act ( 42 U.S.C. 9902 ). (c) Tax treatment (1) Distributions (A) In general Any distribution under a qualified ABLE program shall be includible in the gross income of the distributee in the manner as provided under section 72 to the extent not excluded from gross income under any other provision of this chapter.

“qualified ABLE program” applies in that section

The term “qualified ABLE program” means a program established and maintained by a State, or agency or instrumentality thereof— (A) under which a person may make contributions for a taxable year, for the benefit of an individual who is an eligible individual for such taxable year, to an ABLE account which is established for the purpose of meeting the qualified disability expenses of the designated beneficiary of the account, (B) which limits a designated beneficiary to 1 ABLE account for purposes of this section, and (C) which meets the other requirements of this section.

“qualified disability expenses” applies in that section

The term “qualified disability expenses” means any expenses related to the eligible individual’s blindness or disability which are made for the benefit of an eligible individual who is the designated beneficiary, including the following expenses: education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and other expenses, which are approved by the Secretary under regulations and consistent with the purposes of this section. (6) ABLE account

“computer technology or equipment” applies in that section

The term “computer technology or equipment” means computer software (as defined by section 197(e)(3)(B)), computer or peripheral equipment (as defined by section 168(i)(2)(B)), and fiber optic cable related to computer use. (4) Time when contributions deemed made An individual shall be deemed to have made a contribution to an education individual retirement account on the last day of the preceding taxable year if the contribution is made on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (not including extensions thereof).

“Coverdell education savings account” applies in that section

The term “Coverdell education savings account” means a trust created or organized in the United States exclusively for the purpose of paying the qualified education expenses of an individual who is the designated beneficiary of the trust (and designated as a Coverdell education savings account at the time created or organized), but only if the written governing instrument creating the trust meets the following requirements: (A) No contribution will be accepted— (i) unless it is in cash, (ii) after the date on which such beneficiary attains age 18, or (iii) except in the case of rollover contributions, if such contribution would result in aggregate contributions for the taxable year …

“modified adjusted gross income” applies in that section

the term “modified adjusted gross income” means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933. (d) Tax treatment of distributions (1) In general Any distribution shall be includible in the gross income of the distributee in the manner as provided in section 72. (2) Distributions for qualified education expenses (A) In general No amount shall be includible in gross income under paragraph (1) if the qualified education expenses of the designated beneficiary during the taxable year are not less than the aggregate distributions during the taxable year.

“qualified education expenses” applies in that section

The term “qualified education expenses” means— (i) qualified higher education expenses (as defined in section 529(e)(3)), and (ii) qualified elementary and secondary education expenses (as defined in paragraph (3)). (B) Qualified tuition programs Such term shall include any contribution to a qualified tuition program (as defined in section 529(b)) on behalf of the designated beneficiary (as defined in section 529(e)(1)); but there shall be no increase in the investment in the contract for purposes of applying section 72 by reason of any portion of such contribution which is not includible in gross income by reason of subsection (d)(2).

“qualified elementary and secondary education expenses” applies in that section

The term “qualified elementary and secondary education expenses” means— (i) expenses for tuition, fees, academic tutoring, special needs services in the case of a special needs beneficiary, books, supplies, and other equipment which are incurred in connection with the enrollment or attendance of the designated beneficiary of the trust as an elementary or secondary school student at a public, private, or religious school, (ii) expenses for room and board, uniforms, transportation, and supplementary items and services (including extended day programs) which are required or provided by a public, private, or religious school in connection with such enrollment or attendance, and (iii) expenses …

“rollover contribution” applies in that section

the term “rollover contribution” includes a contribution to a Coverdell education savings account made before the end of the 1-year period beginning on the date on which the contributor receives an amount under section 1477 of title 10 , United States Code, or section 1967 of title 38 of such Code, with respect to a person, to the extent that such contribution does not exceed— (i) the sum of the amounts received during such period by such contributor under such sections with respect to such person, reduced by (ii) the amounts so received which were contributed to a Roth IRA under section 408A(e)(2) or to another Coverdell education savings account.

“school” applies in that section

The term “school” means any school which provides elementary education or secondary education (kindergarten through grade 12), as determined under State law. (C) Computer technology or equipment

“account beneficiary” applies in that section

The term “account beneficiary” means the individual on whose behalf the Trump account was established. (c) Treatment of contributions (1) No deduction allowed No deduction shall be allowed under section 219 for any contribution which is made before the first day of the calendar year in which the account beneficiary attains age 18. (2) Contribution limit In the case of any contribution made before the calendar year in which the account beneficiary attains age 18— (A) In general The aggregate amount of contributions (other than exempt contributions) for such calendar year shall not exceed $5,000. (B) Exempt contribution For purposes of this paragraph,

“eligible individual” applies in that section

The term “eligible individual” means any individual— (A) who has not attained the age of 18 before the close of the calendar year in which the election under subparagraph (C) is made, (B) for whom a social security number (within the meaning of section 24(h)(7)) has been issued before the date on which an election under subsection (C) is made, and (C) for whom— (i) an election is made under this subparagraph by the Secretary if the Secretary determines (based on information available to the Secretary from tax returns or otherwise) that such individual meets the requirements of subparagraphs (A) and (B) and no prior election has been made for such individual under clause (ii), or (ii) an …

“eligible investment” applies in that section

The term “eligible investment” means any mutual fund or exchange traded fund which— (i) tracks the returns of a qualified index, (ii) does not use leverage, (iii) does not have annual fees and expenses of more than 0.1 percent of the balance of the investment in the fund, and (iv) meets such other criteria as the Secretary determines appropriate for purposes of this section. (B) Qualified index

“excess contributions” applies in that section

the term “excess contributions” means the sum of— (A) the amount by which the amount contributed to the account for the calendar year in which taxable year begins exceeds the amount permitted to be contributed to the account under subsection (c)(2), and (B) the amount determined under this paragraph for the preceding taxable year. For purposes of this paragraph, the excess contributions for a taxable year are reduced by the distributions to which subsection (d)(5) applies that are made during the taxable year or by the date prescribed by law (including extensions of time) for filing the account beneficiary’s return for the taxable year.

“exempt contribution” applies in that section

the term “exempt contribution” means— (i) a qualified rollover contribution, (ii) any qualified general contribution, or (iii) any contribution provided under section 6434. (C) Cost-of-living adjustment (i) In general In the case of any taxable year after 2027, the $5,000 amount under subparagraph (A) shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “calendar year 2026” for “calendar year 2016” in subparagraph (A)(ii) thereof.

“general funding contribution” applies in that section

The term “general funding contribution” means a contribution which— (A) is made by— (i) an entity described in section 170(c)(1) (other than a possession of the United States or a political subdivision thereof) or an Indian tribal government, or (ii) an organization described in section 501(c)(3) and exempt from tax under section 501(a), and (B) which specifies a qualified class of account beneficiaries to whom such contribution is to be distributed. (3) Qualified class (A) In general

“qualified ABLE rollover contribution” applies in that section

the term “qualified ABLE rollover contribution” means an amount which is paid during the calendar year in which the account beneficiary attains age 17 in a direct trustee-to-trustee transfer from a Trump account maintained for the benefit of the account beneficiary to an ABLE account (as defined in section 529A(e)(6)) for the benefit of the such account beneficiary, but only if the amount of such payment is equal to the entire balance of the Trump account from which the payment is made.

“qualified class” applies in that section

The term “qualified class” means any of the following: (i) All account beneficiaries who have not attained the age of 18 before the close of the calendar year in which the contribution is made. (ii) All account beneficiaries who have not attained the age of 18 before the close of the calendar year in which the contribution is made and who reside in one or more States or other qualified geographic areas specified by the terms of the general funding contribution.

“qualified general contribution” applies in that section

The term “qualified general contribution” means any contribution which— (A) is made by the Secretary pursuant to a general funding contribution, (B) is made to the Trump account of an account beneficiary in the qualified class of account beneficiaries specified in the general funding contribution, and (C) is in an amount which is equal to the ratio of— (i) the amount of such general funding contribution, to (ii) the number of account beneficiaries in such qualified class. (2) General funding contribution

“qualified geographic area” applies in that section

The term “qualified geographic area” means any geographic area in which not less than 5,000 account beneficiaries reside and which is designated by the Secretary as a qualified geographic area under this subparagraph. (g) Trustee selection In the case of any Trump account created or organized by the Secretary, the Secretary shall take into account the following criteria in selecting the trustee: (1) The history of reliability and regulatory compliance of the trustee. (2) The customer service experience of the trustee. (3) The costs imposed by the trustee on the account or the account beneficiary.

“qualified index” applies in that section

The term “qualified index” means— (i) the Standard and Poor’s 500 stock market index, or (ii) any other index— (I) which is comprised of equity investments in primarily United States companies, and (II) for which regulated futures contracts (as defined in section 1256(g)(1)) are traded on a qualified board or exchange (as defined in section 1256(g)(7)). Such term shall not include any industry or sector-specific index, but may include an index based on market capitalization. (4) Account beneficiary

“qualified rollover contribution” applies in that section

the term “qualified rollover contribution” means an amount which is paid in a direct trustee-to-trustee transfer from a Trump account maintained for the benefit of the account beneficiary to a Trump account maintained for such beneficiary, but only if the amount of such payment is equal to the entire balance of the Trump account from which the payment is made. (f) Qualified general contribution For purposes of this section— (1) In general

“Trump account” applies in that section

The term “Trump account” means an individual retirement account (as defined in section 408(a)) which is not designated as a Roth IRA and which meets the following requirements: (A) The account— (i) is created or organized by the Secretary for the exclusive benefit of an eligible individual or such eligible individual’s beneficiaries, or (ii) is— (I) created or organized in the United States for the exclusive benefit of an individual who has not attained the age of 18 before the end of the calendar year, or such individual’s beneficiaries, and (II) funded by a qualified rollover contribution.

“accumulated taxable income” applies in that section

the term “accumulated taxable income” means the taxable income, adjusted in the manner provided in subsection (b), minus the sum of the dividends paid deduction (as defined in section 561) and the accumulated earnings credit (as defined in subsection (c)).

“nonrecaptured capital gains deductions” applies in that section

the term “nonrecaptured capital gains deductions” means the excess of— (i) the aggregate amount allowable as a deduction under paragraph (6) for preceding taxable years beginning after July 18, 1984 , over (ii) the aggregate of the reductions under subparagraph (B) for preceding taxable years. (6) Net capital gains (A) In general There shall be allowed as a deduction— (i) the net capital gain for the taxable year (determined with the application of paragraph (7)), reduced by (ii) the taxes attributable to such net capital gain.

“United States-owned foreign corporation” applies throughout its part

The term “United States-owned foreign corporation” has the meaning given to such term by section 904(h)(6).

“excess business holdings redemption needs” applies throughout its part

The term “excess business holdings redemption needs” means the amount needed (or reasonably anticipated to be needed) to redeem from a private foundation stock which— (A) such foundation held on May 26, 1969 (or which was received by such foundation pursuant to a will or irrevocable trust to which section 4943(c)(5) applies), and (B) constituted excess business holdings on May 26, 1969 , or would have constituted excess business holdings as of such date if there were taken into account (i) stock received pursuant to a will or trust described in subparagraph (A), and (ii) the reduction in the total outstanding stock of the corporation which would have resulted solely from the redemption of …

“reasonable needs of the business” applies throughout its part

the term “reasonable needs of the business” includes— (1) the reasonably anticipated needs of the business, (2) the section 303 redemption needs of the business, and (3) the excess business holdings redemption needs of the business. (b) Special rules For purposes of subsection (a)— (1) Section 303 redemption needs

“section 303 redemption needs” applies throughout its part

The term “section 303 redemption needs” means, with respect to the taxable year of the corporation in which a shareholder of the corporation died or any taxable year thereafter, the amount needed (or reasonably anticipated to be needed) to make a redemption of stock included in the gross estate of the decedent (but not in excess of the maximum amount of stock to which section 303(a) may apply). (2) Excess business holdings redemption needs

“lending or finance business” applies throughout its part

the term “lending or finance business” means a business of— (i) making loans, (ii) purchasing or discounting accounts receivable, notes, or installment obligations, (iii) rendering services or making facilities available in connection with activities described in clauses (i) and (ii) carried on by the corporation rendering services or making facilities available, or (iv) rendering services or making facilities available to another corporation which is engaged in the lending or finance business (within the meaning of this paragraph), if such services or facilities are related to the lending or finance business (within such meaning) of such other corporation and such other corporation and the …

“personal holding company” applies in that section

the term “personal holding company” means any corporation (other than a corporation described in subsection (c)) if— (1) Adjusted ordinary gross income requirement At least 60 percent of its adjusted ordinary gross income (as defined in section 543(b)(2)) for the taxable year is personal holding company income (as defined in section 543(a)), and (2) Stock ownership requirement At any time during the last half of the taxable year more than 50 percent in value of its outstanding stock is owned, directly or indirectly, by or for not more than 5 individuals.

“active business computer software royalties” applies in that section

the term “active business computer software royalties” means any royalties— (A) received by any corporation during the taxable year in connection with the licensing of computer software, and (B) with respect to which the requirements of paragraphs (2), (3), (4), and (5) are met.

“adjusted income from mineral, oil, and gas royalties” applies throughout its part

The term “adjusted income from mineral, oil, and gas royalties” means the gross income from mineral, oil, and gas royalties (including production payments and overriding royalties), reduced by the amount subtracted under paragraph (2)(B) of this subsection in respect of such royalties.

“adjusted income from rents” applies throughout its part

The term “adjusted income from rents” means the gross income from rents, reduced by the amount subtracted under paragraph (2)(A) of this subsection. For purposes of the preceding sentence,

“adjusted ordinary gross income” applies throughout its part

The term “adjusted ordinary gross income” means the ordinary gross income adjusted as follows: (A) Rents From the gross income from rents (as defined in the second sentence of paragraph (3) of this subsection) subtract the amount allowable as deductions for— (i) exhaustion, wear and tear, obsolescence, and amortization of property other than tangible personal property which is not customarily retained by any one lessee for more than three years, (ii) property taxes, (iii) interest, and (iv) rent, to the extent allocable, under regulations prescribed by the Secretary, to such gross income from rents. The amount subtracted under this subparagraph shall not exceed such gross income from rents.

“affiliated group” applies in that section

the term “affiliated group” has the meaning given such term by section 1504(a).

“copyright royalties” applies in that section

the term “copyright royalties” means compensation, however designated, for the use of, or the right to use, copyrights in works protected by copyright issued under title 17 of the United States Code and to which copyright protection is also extended by the laws of any country other than the United States of America by virtue of any international treaty, convention, or agreement, or interests in any such copyrighted works, and includes payments from any person for performing rights in any such copyrighted work and payments (other than produced film rents as defined in paragraph (5)(B)) received for the use of, or right to use, films. For purposes of this paragraph,

“ordinary gross income” applies throughout its part

The term “ordinary gross income” means the gross income determined by excluding— (A) all gains from the sale or other disposition of capital assets, and (B) all gains (other than those referred to in subparagraph (A)) from the sale or other disposition of property described in section 1231(b). (2) Adjusted ordinary gross income

“personal holding company income” applies in that section

the term “personal holding company income” means the portion of the adjusted ordinary gross income which consists of: (1) Dividends, etc. Dividends, interest, royalties (other than mineral, oil, or gas royalties or copyright royalties), and annuities.

“produced film rents” applies in that section

the term “produced film rents” means payments received with respect to an interest in a film for the use of, or right to use, such film, but only to the extent that such interest was acquired before substantial completion of production of such film. In the case of a producer who actively participates in the production of the film, such term includes an interest in the proceeds or profits from the film, but only to the extent such interest is attributable to such active participation.

“rents” applies throughout its part

the term “rents” means compensation, however designated, for the use of, or right to use, property, and the interest on debts owed to the corporation, to the extent such debts represent the price for which real property held primarily for sale to customers in the ordinary course of its trade or business was sold or exchanged by the corporation; but such term does not include— (A) amounts constituting personal holding company income under subsection (a)(6), (B) copyright royalties (as defined in subsection (a)(4)), (C) produced film rents (as defined in subsection (a)(5)(B)), (D) compensation, however designated, for the use of, or the right to use, any tangible personal property …

“shareholder” applies in that section

the term “shareholder” shall include any person who owns stock within the meaning of section 544. This paragraph shall not apply to active business computer software royalties. (5) Produced film rents (A) Produced film rents; except that such rents shall not be included if such rents constitute 50 percent or more of the ordinary gross income. (B) For purposes of this section,