The Pension Protection Act of 2006, P.L. 109-280, signed by the President on August 17, 2006, makes clear that, for taxable years beginning after enactment, gross investment income, as defined in section 4940(c)(2) of the Internal Revenue Code, includes income from sources similar to other sources specified. It also changes the treatment of capital gains and losses so that all capital gains and losses are included in gross income, with a specific exception for like-kind exchanges of related-use property. The law makes clear that no carrybacks or carryovers of capital losses are allowed in computing gross investment income. Finally, it redefines capital gain net income under section 4940(c)(4) to include property used to produce gross investment income. Due to the larger income base from the general inclusion of capital gains and losses and change in capital gain net income calculation, private foundations with tax years beginning September 1, 2006, may need to make larger estimated tax payments, reported on Form 990-W, to reflect inclusion of gains and losses not previously subject to tax. In addition, the Act increases penalty excise taxes relating to public charities, social welfare organizations, and private foundations, effective for taxable years beginning September 1, 2006. The law doubles first-tier penalties for sections 4941 (self-dealing), 4942 (failure to distribute income), 4943 (excess business holdings), 4944 (jeopardizing investments), and 4945 (taxable expenditures) of the Code. It doubles the ceiling on foundation manager penalties under sections 4941, 4944 and 4945. Finally, the law doubles the dollar limitation under section 4958 on organization managers of public charities and social welfare organizations.