Tax Planning and Compliance for Tax-Exempt Organizations, Fifth Edition 2019 Cumulative Supplement, 5th Edition
by Jody Blazek
CHAPTER 13Excise Tax Based on Investment Income: IRC § 4940
§ 13.1 Formula for Taxable Income
p. 312. Add at end of first paragraph:
The term gross investment income means the gross amount of income from interest, dividends, rents, payments with respect to securities loans, and royalties, but not including any income to the extent included in computing the unrelated business income tax.1 Note the code definition contains the words “and income from sources similar to the five types specified” and find examples in following subsections.
p. 314. Add at end of first full paragraph:
Distribution amounts from qualified employee pension plans and individual retirement accounts are treated as deferred compensation for federal income tax purposes. The term “gross investment income” under § 4940 includes interest, dividends, rents, payments with respect to securities, loans, and royalties, but does not include deferred compensation. Therefore, distributions to a trust from a decedent's plans will not constitute gross investment income for purposes of imposing the excise tax described in § 4940.2
*(h) Foreign Investments
p. 319. Add at end of subsection:
New IRC § 965 was added to the tax code by the Tax Cuts and Jobs Act to tax the accumulated post‐1986 deferred foreign income of a corporation, ...