Skip to main content
Find a Lawyer

26 U.S.C. § 502 - U.S. Code - Unannotated Title 26. Internal Revenue Code § 502. Feeder organizations

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) General rule.--An organization operated for the primary purpose of carrying on a trade or business for profit shall not be exempt from taxation under section 501 on the ground that all of its profits are payable to one or more organizations exempt from taxation under section 501.

(b) Special rule.--For purposes of this section, the term “trade or business” shall not include--

(1) the deriving of rents which would be excluded under section 512(b)(3), if section 512 applied to the organization,

(2) any trade or business in which substantially all the work in carrying on such trade or business is performed for the organization without compensation, or

(3) any trade or business which is the selling of merchandise, substantially all of which has been received by the organization as gifts or contributions.

Previous Part of Code Next Part of Code
Back to Chapter List

Cite this article: FindLaw.com - 26 U.S.C. § 502 - U.S. Code - Unannotated Title 26. Internal Revenue Code § 502. Feeder organizations - last updated January 01, 2024 | https://codes.findlaw.com/us/title-26-internal-revenue-code/26-usc-sect-502/

FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature before relying on it for your legal needs.

Was this helpful?

Welcome to FindLaw's Cases & Codes

A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw’s Learn About the Law.

Go to Learn About the Law

Latest Blog Posts

For Legal Professionals

Learn About The Law

Get help with your legal needs

FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.

Go to Learn About the Law

Need to Find an Attorney?

Search our directory by legal issue

Enter information in one or both fields (Required)

Copied to clipboard