MINIMUM DISTRIBUTION AMOUNT FOR PRIVATE FOUNDATIONS.

SEC. 1303. MINIMUM DISTRIBUTION AMOUNT FOR PRIVATE FOUNDATIONS. (a) In General.— Subsection (e) of section 4942 (relating to minimum investment return) is amended to read as follows: “(e) Minimum Investment Return.— “(1) In general.— For purposes of subsection (d), the minimum investment return for any private foundation for any taxable year is 5 percent of the excess of— “(A) the aggregate fair market value of all assets of the foundation other than those which are used (or held for use) directly in carrying out the foundation’s exempt purpose, over “(B) the acquisition indebtedness with respect to such assets (determined under section 514(c)(1) without regard to the taxable year in which the indebtedness was incurred). “(2) Valuation.— “(A) In general.— For purposes of paragraph (1)(A), the fair market value of securities for which market quotations are readily available shall be determined on a monthly basis. For all other assets, the fair market value shall be determined at such times and in such manner as the Secretary shall by regulations prescribe. “(B) Reductions in value for blockage or similar factors.— In determining the value of any securities under this paragraph, the fair market value of such securities (determined without regard to any reduction in value) shall not be reduced unless, and only to the extent that, the private foundation establishes that as a result of— “(i) the size of the block of such securities, “(ii) the fact that the securities held are securities in a closely held corporation, or “(iii) the fact that, the sale of such securities would result in a forced or distress sale, the securities could not be liquidated within a reasonable period of time except, at a price less than such fair market value. Any reduction in value allowable under this subparagraph shall not exceed 10 percent of such fair market value.” (b) Effective Date.— The amendment made by this section applies to taxable years beginning after December 31, 1975.