DISPOSITION OF PRIVATE FOUNDATION PROPERTY UNDER TRANSITION RULES OF TAX REFORM ACT OF 1969.

SEC. 1301. DISPOSITION OF PRIVATE FOUNDATION PROPERTY UNDER TRANSITION RULES OF TAX REFORM ACT OF 1969. (a) In General.— Paragraph (2) of section 101(1) of the Tax Reform Act of 1969 (relating to private foundations savings provisions) is amended— (1) by striking out “and” at the end of subparagraph (D); (2) by striking out the period at the end of subparagraph (E) and inserting in lieu t hereof “; and”; and (3) by adding at the end thereof the following new subparagraph: “(F) the sale, exchange, or other disposition (other than by lease) of property which is owned by a private foundation to a disqualified person if— “(i) such foundation is leasing substantially all of such property under a lease to which subparagraph (C) applies. “(ii) the disposition to such disqualified person occurs before January 1, 1978, and “(iii) such foundation receives in return for the disposition to such disqualified person an amount which equals or exceeds the fair market value of such property at the time of the disposition or at the time (after June 30, 1976) a contract for the disposition was previously executed in a transaction which would not constitute a prohibited transaction (within the meaning of section 503(b) or any corresponding provision of prior law).”. (b) Effective Date.— The amendments made by subsection (a) shall apply to dispositions after the date of the enactment of this Act in taxable years ending after such date.