(a) In general.
Except as provided in this section, sections 1.141-0 through 1.141-15 apply to section 145(a). For example, under this section, section 1.141-1, and section 1.141-2, an issue ceases to be an issue of qualified 501(c)(3) bonds if the issuer or a conduit borrower 501(c)(3) organization takes a deliberate action, subsequent to the issue date, that causes the issue to fail to comply with the requirements of sections 141(e) and 145 (such as an action that results in revocation of exempt status of the 501(c)(3) organization).
(b) Modification of private business tests.
In applying section 1.141-0 through 1.141-15 to section 145(a) --
(1) References to governmental persons include 501(c)(3) organizations with respect to their activities that do not constitute unrelated trades or businesses under section 513(a);
(2) References to “10 percent” and “proceeds” in the context of the private business use test and the private security or payment test mean “5 percent” and “net proceeds”; and
(3) References to the private business use test in sections 1.141-2 and 1.141-12 include the ownership test of section 145(a)(1).
(c) Exceptions --
(1) Certain provisions relating to governmental programs.
The following provisions do not apply to section 145: section 1.141-2(d)(4) (relating to the special rule for dispositions of personal property in the ordinary course of an established governmental program) and section 1.141-2(d)(5) (relating to the special rule for general obligation bond programs that finance a large number of separate purposes).
(2) Costs of issurance.
Section 1.141-3(g)(6) does not apply to section 145(a)(2) to the extent that it provides that costs of issuance are allocated ratably among the other purposes for which the proceeds are used. For purposes of section 145(a)(2), costs of issuance are treated as private business use.
[T.D. 8712, 62 FR 2275-2305, Jan. 16, 1997.]