Adjusted net income is the excess of gross income for the tax year (including gross income from any unrelated trade or business) determined with certain modifications over the total deductions (including deductions directly connected with carrying on any unrelated trade or business) that would be allowed a taxable corporation determined with certain deduction modifications.
Gross income does not include gifts, grants, or contributions received by the private operating foundation but does include income from a functionally-related business. Gross income and the total deductions allowable from that income will be figured as they are normally figured for income tax purposes except as otherwise provided. When figuring adjusted net income, there will be no exclusions, deductions, or credits unless otherwise provided under income modifications and deduction modifications.
Amounts received by the foundation in tax years beginning after 1969 representing repayment of principal on loans made in tax years before 1970 are not includible in gross income. However, payments of interest on those loans are includible in gross income.