In the case of any organization described in § 30471(a) of this title to which § 30486 of this title is applicable, the exemption shall be denied for the taxable year if the amounts accumulated out of income during the taxable year or any prior taxable year and not actually paid out by the end of the taxable year:(1) Are unreasonable in amount or duration in order to carry out the charitable, educational, or other purpose or function constituting the basis for exemption under § 30471(a) of this title; or(2) are used to a substantial degree for purposes or functions other than those constituting the basis for exemption under § 30471(a) of this title, or(3) are invested in such a manner as to jeopardize the carrying out of the charitable, educational, or other purpose or function constituting the basis for exemption under § 30471(a) of this title.Subsection (1) shall not apply to income attributable to property of a decedent dying before January 1, 1962, which is transferred under his/her will to a trust created by that will. In the case of a trust created by the will of a decedent dying on or after January 1, 1962, if income is required to be accumulated pursuant to the mandatory

her will to a trust created by that will. In the case of a trust created by the will of a decedent dying on or after January 1, 1962, if income is required to be accumulated pursuant to the mandatory terms of the will creating the trust, subsection (1) shall apply only to income accumulated during a taxable year of the trust beginning more than twenty-one (21) years after the date of death of the last life being designated in the trust instrument. History —Jan. 31, 2011, No. 1, § 1102.07, retroactive to Jan. 1, 2011.