Subchapter J—Estates, Trusts, Beneficiaries, and Decedents
Subchapter Referred to in Other Sections
This subchapter is referred to in
PART I—ESTATES, TRUSTS, AND BENEFICIARIES
Part Referred to in Other Sections
This part is referred to in
Subpart A—General Rules for Taxation of Estates and Trusts
Amendments
1986—
1976—
Subpart Referred to in Other Sections
This subpart is referred to in
§641. Imposition of tax
(a) Application of tax
The tax imposed by section 1(e) shall apply to the taxable income of estates or of any kind of property held in trust, including—
(1) income accumulated in trust for the benefit of unborn or unascertained persons or persons with contingent interests, and income accumulated or held for future distribution under the terms of the will or trust;
(2) income which is to be distributed currently by the fiduciary to the beneficiaries, and income collected by a guardian of an infant which is to be held or distributed as the court may direct;
(3) income received by estates of deceased persons during the period of administration or settlement of the estate; and
(4) income which, in the discretion of the fiduciary, may be either distributed to the beneficiaries or accumulated.
(b) Computation and payment
The taxable income of an estate or trust shall be computed in the same manner as in the case of an individual, except as otherwise provided in this part. The tax shall be computed on such taxable income and shall be paid by the fiduciary.
(c) Exclusion of includible gain from taxable income
(1) General rule
For purposes of this part, the taxable income of a trust does not include the amount of any includible gain as defined in section 644(b) reduced by any deductions properly allocable thereto.
(2) Cross reference
For the taxation of any includible gain, see section 644.
(Aug. 16, 1954, ch. 736,
Amendments
1977—Subsec. (a).
1976—Subsec. (c).
1969—Subsec. (a).
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1969 Amendment
Amendment by
Cross References
Charitable trusts subject to tax, see
Income from an interest in an estate or trust as gross income, see
Rates of tax on individuals, see
Returns—
Estates and trusts, see
Joint fiduciaries, see
Taxable income defined, see
§642. Special rules for credits and deductions
(a) Foreign tax credit allowed
An estate or trust shall be allowed the credit against tax for taxes imposed by foreign countries and possessions of the United States, to the extent allowed by section 901, only in respect of so much of the taxes described in such section as is not properly allocable under such section to the beneficiaries.
(b) Deduction for personal exemption
An estate shall be allowed a deduction of $600. A trust which, under its governing instrument, is required to distribute all of its income currently shall be allowed a deduction of $300. All other trusts shall be allowed a deduction of $100. The deductions allowed by this subsection shall be in lieu of the deductions allowed under section 151 (relating to deduction for personal exemption).
(c) Deduction for amounts paid or permanently set aside for a charitable purpose
(1) General rule
In the case of an estate or trust (other then 1 a trust meeting the specifications of subpart B), there shall be allowed as a deduction in computing its taxable income (in lieu of the deduction allowed by section 170(a), relating to deduction for charitable, etc., contributions and gifts) any amount of the gross income, without limitation, which pursuant to the terms of the governing instrument is, during the taxable year, paid for a purpose specified in section 170(c) (determined without regard to section 170(c)(2)(A)). If a charitable contribution is paid after the close of such taxable year and on or before the last day of the year following the close of such taxable year, then the trustee or administrator may elect to treat such contribution as paid during such taxable year. The election shall be made at such time and in such manner as the Secretary prescribes by regulations.
(2) Amounts permanently set aside
In the case of an estate, and in the case of a trust (other than a trust meeting the specifications of subpart B) required by the terms of its governing instrument to set aside amounts which was—
(A) created on or before October 9, 1969, if—
(i) an irrevocable remainder interest is transferred to or for the use of an organization described in section 170(c), or
(ii) the grantor is at all times after October 9, 1969, under a mental disability to change the terms of the trust; or
(B) established by a will executed on or before October 9, 1969, if—
(i) the testator dies before October 9, 1972, without having republished the will after October 9, 1969, by codicil or otherwise,
(ii) the testator at no time after October 9, 1969, had the right to change the portions of the will which pertain to the trust, or
(iii) the will is not republished by codicil or otherwise before October 9, 1972, and the testator is on such date and at all times thereafter under a mental disability to republish the will by codicil or otherwise,
there shall also be allowed as a deduction in computing its taxable income any amount of the gross income, without limitation, which pursuant to the terms of the governing instrument is, during the taxable year, permanently set aside for a purpose specified in section 170(c), or is to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, or for the establishment, acquisition, maintenance, or operation of a public cemetery not operated for profit. In the case of a trust, the preceding sentence shall apply only to gross income earned with respect to amounts transferred to the trust before October 9, 1969, or transferred under a will to which subparagraph (B) applies.
(3) Pooled income funds
In the case of a pooled income fund (as defined in paragraph (5)), there shall also be allowed as a deduction in computing its taxable income any amount of the gross income attributable to gain from the sale of a capital asset held for more than 1 year, without limitation, which pursuant to the terms of the governing instrument is, during the taxable year, permanently set aside for a purpose specified in section 170(c).
(4) Adjustments
To the extent that the amount otherwise allowable as a deduction under this subsection consists of gain described in section 1202(a), proper adjustment shall be made for any exclusion allowable to the estate or trust under section 1202. In the case of a trust, the deduction allowed by this subsection shall be subject to section 681 (relating to unrelated business income).
(5) Definition of pooled income fund
For purposes of paragraph (3), a pooled income fund is a trust—
(A) to which each donor transfers property, contributing an irrevocable remainder interest in such property to or for the use of an organization described in section 170(b)(1)(A) (other than in clauses (vii) or (viii)), and retaining an income interest for the life of one or more beneficiaries (living at the time of such transfer),
(B) in which the property transferred by each donor is commingled with property transferred by other donors who have made or make similar transfers,
(C) which cannot have investments in securities which are exempt from the taxes imposed by this subtitle,
(D) which includes only amounts received from transfers which meet the requirements of this paragraph,
(E) which is maintained by the organization to which the remainder interest is contributed and of which no donor or beneficiary of an income interest is a trustee, and
(F) from which each beneficiary of an income interest receives income, for each year for which he is entitled to receive the income interest referred to in subparagraph (A), determined by the rate of return earned by the trust for such year.
For purposes of determining the amount of any charitable contribution allowable by reason of a transfer of property to a pooled fund, the value of the income interest shall be determined on the basis of the highest rate of return earned by the fund for any of the 3 taxable years immediately preceding the taxable year of the fund in which the transfer is made. In the case of funds in existence less than 3 taxable years preceding the taxable year of the fund in which a transfer is made the rate of return shall be deemed to be 6 percent per annum, except that the Secretary may prescribe a different rate of return.
(6) Taxable private foundations
In the case of a private foundation which is not exempt from taxation under section 501(a) for the taxable year, the provisions of this subsection shall not apply and the provisions of section 170 shall apply.
(d) Net operating loss deduction
The benefit of the deduction for net operating losses provided by section 172 shall be allowed to estates and trusts under regulations prescribed by the Secretary.
(e) Deduction for depreciation and depletion
An estate or trust shall be allowed the deduction for depreciation and depletion only to the extent not allowable to beneficiaries under section 167(d) and 611(b).
(f) Amortization deductions
The benefit of the deductions for amortization provided by sections 169 and 197 shall be allowed to estates and trusts in the same manner as in the case of an individual. The allowable deduction shall be apportioned between the income beneficiaries and the fiduciary under regulations prescribed by the Secretary.
(g) Disallowance of double deductions
Amounts allowable under section 2053 or 2054 as a deduction in computing the taxable estate of a decedent shall not be allowed as a deduction (or as an offset against the sales price of property in determining gain or loss) in computing the taxable income of the estate or of any other person, unless there is filed, within the time and in the manner and form prescribed by the Secretary, a statement that the amounts have not been allowed as deductions under section 2053 or 2054 and a waiver of the right to have such amounts allowed at any time as deductions under section 2053 or 2054. Rules similar to the rules of the preceding sentence shall apply to amounts which may be taken into account under 2 2621(a)(2) or 2622(b). This subsection shall not apply with respect to deductions allowed under part II (relating to income in respect of decedents).
(h) Unused loss carryovers and excess deductions on termination available to beneficiaries
If on the termination of an estate or trust, the estate or trust has—
(1) a net operating loss carryover under section 172 or a capital loss carryover under section 1212, or
(2) for the last taxable year of the estate or trust deductions (other than the deductions allowed under subsections (b) or (c)) in excess of gross income for such year,
then such carryover or such excess shall be allowed as a deduction, in accordance with regulations prescribed by the Secretary, to the beneficiaries succeeding to the property of the estate or trust.
(i) Certain distributions by cemetery perpetual care funds
In the case of a cemetery perpetual care fund which—
(1) was created pursuant to local law by a taxable cemetery corporation for the care and maintenance of cemetery property, and
(2) is treated for the taxable year as a trust for purposes of this subchapter,
any amount distributed by such fund for the care and maintenance of gravesites which have been purchased from the cemetery corporation before the beginning of the taxable year of the trust and with respect to which there is an obligation to furnish care and maintenance shall be considered to be a distribution solely for purposes of sections 651 and 661, but only to the extent that the aggregate amount so distributed during the taxable year does not exceed $5 multiplied by the aggregate number of such gravesites.
(Aug. 16, 1954, ch. 736,
Amendments
1993—Subsec. (c)(4).
Subsec. (f).
1990—Subsec. (e).
Subsec. (f).
1989—Subsec. (g).
1986—Subsec. (a).
Subsec. (c)(4).
Subsec. (j).
1984—Subsec. (a)(2).
Subsec. (c)(3), (4).
1981—Subsec. (f).
1978—Subsecs. (i) to (k).
1977—Subsec. (k).
1976—Subsec. (a).
Subsec. (c)(1).
Subsec. (c)(3), (4).
Subsec. (c)(3), (4).
Subsecs. (c)(5), (d).
Subsec. (f).
Subsec. (g).
Subsec. (h).
Subsecs. (j), (k).
1971—Subsec. (a)(3).
Subsec. (f).
Subsecs. (i), (j).
1969—Subsec. (c).
Subsec. (f).
1966—Subsec. (g).
1964—Subsec. (a)(3).
Subsec. (i).
1962—Subsec. (e).
Effective Date of 1993 Amendment
Amendment by section 13113(d)(2) of
Amendment by section 13261(f)(2) of
Effective Date of 1990 Amendment
Amendment by section 11812(b)(9) of
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by section 112(b)(2) of
Amendment by section 301(b)(6) of
Amendment by section 612(b)(3) of
Effective Date of 1984 Amendment
Amendment by section 474(r)(17) of
Amendment by section 1001(b)(8) of
Effective Date of 1981 Amendment
Amendment by
Effective Date of 1978 Amendment
Section 113(d) of
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1976 Amendments
Section 1402(b)(1) of
Section 1402(b)(2) of
Amendment by section 1901(b)(1)(H)(i) of
Amendment by section 1951(c)(2)(B) of
Section 2009(e)(4) of
Section 2124(a)(4) of
Section 1(b) of
Effective Date of 1971 Amendment
Section 303(d) of
Section 703 of
Effective Date of 1969 Amendment
Amendment by section 201(b) of
Amendment by section 704(b)(2) of
Effective Date of 1966 Amendment
Section 2(b) of
Effective Date of 1964 Amendment
Amendment by
Effective Date of 1962 Amendment
Amendment by
Savings Provision
For provisions that nothing in amendment by
Cross References
Deductions—
Estates and trusts accumulating income or distributing corpus, see
Trusts distributing current income only, see
Value of gross estate, see
Limitation on charitable deductions, see
Returns by trust claiming charitable deduction under subsection (c) of this section, see
Section Referred to in Other Sections
This section is referred to in
1 So in original. Probably should be "than".
2 So in original. Probably should be "under section".
§643. Definitions applicable to subparts A, B, C, and D
(a) Distributable net income
For purposes of this part, the term "distributable net income" means, with respect to any taxable year, the taxable income of the estate or trust computed with the following modifications—
(1) Deduction for distributions
No deduction shall be taken under sections 651 and 661 (relating to additional deductions).
(2) Deduction for personal exemption
No deduction shall be taken under section 642(b) (relating to deduction for personal exemptions).
(3) Capital gains and losses
Gains from the sale or exchange of capital assets shall be excluded to the extent that such gains are allocated to corpus and are not (A) paid, credited, or required to be distributed to any beneficiary during the taxable year, or (B) paid, permanently set aside, or to be used for the purposes specified in section 642(c). Losses from the sale or exchange of capital assets shall be excluded, except to the extent such losses are taken into account in determining the amount of gains from the sale or exchange of capital assets which are paid, credited, or required to be distributed to any beneficiary during the taxable year. The exclusion under section 1202 shall not be taken into account.
(4) Extraordinary dividends and taxable stock dividends
For purposes only of subpart B (relating to trusts which distribute current income only), there shall be excluded those items of gross income constituting extraordinary dividends or taxable stock dividends which the fiduciary, acting in good faith, does not pay or credit to any beneficiary by reason of his determination that such dividends are allocable to corpus under the terms of the governing instrument and applicable local law.
(5) Tax-exempt interest
There shall be included any tax-exempt interest to which section 103 applies, reduced by any amounts which would be deductible in respect of disbursements allocable to such interest but for the provisions of section 265 (relating to disallowance of certain deductions).
(6) Income of foreign trust
In the case of a foreign trust—
(A) There shall be included the amounts of gross income from sources without the United States, reduced by any amounts which would be deductible in respect of disbursements allocable to such income but for the provisions of section 265(a)(1) (relating to disallowance of certain deductions).
(B) Gross income from sources within the United States shall be determined without regard to section 894 (relating to income exempt under treaty).
(C) Paragraph (3) shall not apply to a foreign trust. In the case of such a trust, there shall be included gains from the sale or exchange of capital assets, reduced by losses from such sales or exchanges to the extent such losses do not exceed gains from such sales or exchanges.
If the estate or trust is allowed a deduction under section 642(c), the amount of the modifications specified in paragraphs (5) and (6) shall be reduced to the extent that the amount of income which is paid, permanently set aside, or to be used for the purposes specified in section 642(c) is deemed to consist of items specified in those paragraphs. For this purpose, such amount shall (in the absence of specific provisions in the governing instrument) be deemed to consist of the same proportion of each class of items of income of the estate or trust as the total of each class bears to the total of all classes.
(b) Income
For purposes of this subpart and subparts B, C, and D, the term "income", when not preceded by the words "taxable", "distributable net", "undistributed net", or "gross", means the amount of income of the estate or trust for the taxable year determined under the terms of the governing instrument and applicable local law. Items of gross income constituting extraordinary dividends or taxable stock dividends which the fiduciary, acting in good faith, determines to be allocable to corpus under the terms of the governing instrument and applicable local law shall not be considered income.
(c) Beneficiary
For purposes of this part, the term "beneficiary" includes heir, legatee, devisee.
(d) Coordination with back-up withholding
Except to the extent otherwise provided in regulations, this subchapter shall be applied with respect to payments subject to withholding under section 3406—
(1) by allocating between the estate or trust and its beneficiaries any credit allowable under section 31(c) (on the basis of their respective shares of any such payment taken into account under this subchapter),
(2) by treating each beneficiary to whom such credit is allocated as if an amount equal to such credit has been paid to him by the estate or trust, and
(3) by allowing the estate or trust a deduction in an amount equal to the credit so allocated to beneficiaries.
(e) Treatment of property distributed in kind
(1) Basis of beneficiary
The basis of any property received by a beneficiary in a distribution from an estate or trust shall be—
(A) the adjusted basis of such property in the hands of the estate or trust immediately before the distribution, adjusted for
(B) any gain or loss recognized to the estate or trust on the distribution.
(2) Amount of distribution
In the case of any distribution of property (other than cash), the amount taken into account under sections 661(a)(2) and 662(a)(2) shall be the lesser of—
(A) the basis of such property in the hands of the beneficiary (as determined under paragraph (1)), or
(B) the fair market value of such property.
(3) Election to recognize gain
(A) In general
In the case of any distribution of property (other than cash) to which an election under this paragraph applies—
(i) paragraph (2) shall not apply,
(ii) gain or loss shall be recognized by the estate or trust in the same manner as if such property had been sold to the distributee at its fair market value, and
(iii) the amount taken into account under sections 661(a)(2) and 662(a)(2) shall be the fair market value of such property.
(B) Election
Any election under this paragraph shall apply to all distributions made by the estate or trust during a taxable year and shall be made on the return of such estate or trust for such taxable year.
Any such election, once made, may be revoked only with the consent of the Secretary.
(4) Exception for distributions described in section 663(a)
This subsection shall not apply to any distribution described in section 663(a).
(f) Treatment of multiple trusts
For purposes of this subchapter, under regulations prescribed by the Secretary, 2 or more trusts shall be treated as 1 trust if—
(1) such trusts have substantially the same grantor or grantors and substantially the same primary beneficiary or beneficiaries, and
(2) a principal purpose of such trusts is the avoidance of the tax imposed by this chapter.
For purposes of the preceding sentence, a husband and wife shall be treated as 1 person.
(g) Certain payments of estimated tax treated as paid by beneficiary
(1) In general
In the case of a trust—
(A) the trustee may elect to treat any portion of a payment of estimated tax made by such trust for any taxable year of the trust as a payment made by a beneficiary of such trust,
(B) any amount so treated shall be treated as paid or credited to the beneficiary on the last day of such taxable year, and
(C) for purposes of subtitle F, the amount so treated—
(i) shall not be treated as a payment of estimated tax made by the trust, but
(ii) shall be treated as a payment of estimated tax made by such beneficiary on January 15 following the taxable year.
(2) Time for making election
An election under paragraph (1) shall be made on or before the 65th day after the close of the taxable year of the trust and in such manner as the Secretary may prescribe.
(3) Extension to last year of estate
In the case of a taxable year reasonably expected to be the last taxable year of an estate—
(A) any reference in this subsection to a trust shall be treated as including a reference to an estate, and
(B) the fiduciary of the estate shall be treated as the trustee.
(Aug. 16, 1954, ch. 736,
Amendments
1993—Subsec. (a)(3).
1989—Subsec. (a)(6)(A).
Subsec. (a)(6)(C).
Subsec. (a)(6)(D).
1988—Subsec. (g)(1).
Subsec. (g)(2).
"(A) only on the trust's return of the tax imposed by this chapter for the taxable year, and
"(B) only if such return is filed on or before the 65th day after the close of the taxable year."
Subsec. (g)(3).
1986—Subsec. (a)(3).
Subsec. (a)(7).
Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsec. (g).
1984—Subsec. (d).
Subsec. (e).
1983—Subsec. (a)(7).
Subsec. (d).
1982—Subsec. (d).
1981—Subsec. (a)(7).
1980—Subsec. (a)(7).
1976—Subsec. (a)(6)(C).
Subsec. (a)(6)(D).
Subsec. (d).
1962—Subsec. (a)(6).
Subsec. (d).
Effective Date of 1993 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by section 301(b)(7) of
Amendment by section 612(b)(4) of
Section 1404(d) of
Amendment by section 1806(a), (c) of
Effective Date of 1984 Amendment
Section 81(b) of
"(1)
"(2)
"(A) the time for making an election under section 643(d)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this section) shall not expire before January 1, 1985, and
"(B) the requirement that such election be made on the return of the estate or trust shall not apply."
Section 82(b) of
Section 722(h)(5) of
"(A) Except as provided in this paragraph, the amendments made by this subsection [amending this section and
"(B) The amendments made by paragraph (4) [amending
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1981 Amendment
Amendment by section 301(b)(4) of
Effective and Termination Dates of 1980 Amendment
Amendment by
Effective Date of 1976 Amendment
For effective date of amendment by section 1013(e)(2) of
Section 1013(f)(2) of
Effective Date of 1962 Amendment
Section 7(j) of
Treatment as Single Trust
Section 1018(e) of
"(1) on a return for the 1st taxable year of the trusts involved beginning after March 1, 1984, 2 or more trusts were treated as a single trust for purposes of the tax imposed by
"(2) such trusts would have been required to be so treated but for the amendment made by section 1806(b) of the Reform Act [
"(3) such trusts did not accumulate any income during such taxable year and did not make any accumulation distributions during such taxable year,
then, notwithstanding the amendment made by section 1806(b) of the Reform Act, such trusts shall be treated as one trust for purposes of such taxable year."
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of
Section Referred to in Other Sections
This section is referred to in
§644. Special rule for gain on property transferred to trust at less than fair market value
(a) Imposition of tax
(1) In general
If—
(A) a trust (or another trust to which the property is distributed) sells or exchanges property at a gain not more than 2 years after the date of the initial transfer of the property in trust by the transferor, and
(B) the fair market value of such property at the time of the initial transfer in trust by the transferor exceeds the adjusted basis of such property immediately after such transfer,
there is hereby imposed a tax determined in accordance with paragraph (2) on the includible gain recognized on such sale or exchange.
(2) Amount of tax
The amount of the tax imposed by paragraph (1) on any includible gain recognized on the sale or exchange of any property shall be equal to the sum of—
(A) the excess of—
(i) the tax which would have been imposed under this chapter for the taxable year of the transferor in which the sale or exchange of such property occurs had the amount of the includible gain recognized on such sale or exchange, reduced by any deductions properly allocable to such gain, been included in the gross income of the transferor for such taxable year, over
(ii) the tax actually imposed under this chapter for such taxable year on the transferor, plus
(B) if such sale or exchange occurs in a taxable year of the transferor which begins after the beginning of the taxable year of the trust in which such sale or exchange occurs, an amount equal to the amount determined under subparagraph (A) multiplied by the underpayment rate established under section 6621.
The determination of tax under clause (i) of subparagraph (A) shall be made by not taking into account any carryback, and by not taking into account any loss or deduction to the extent that such loss or deduction may be carried by the transferor to any other taxable year.
(3) Taxable year for which tax imposed
The tax imposed by paragraph (1) shall be imposed for the taxable year of the trust which begins with or within the taxable year of the transferor in which the sale or exchange occurs.
(4) Tax to be in addition to other taxes
The tax imposed by this subsection for any taxable year of the trust shall be in addition to any other tax imposed by this chapter for such taxable year.
(b) Definition of includible gain
For purposes of this section, the term "includible gain" means the lesser of—
(1) the gain recognized by the trust on the sale or exchange of any property, or
(2) the excess of the fair market value of such property at the time of the initial transfer in trust by the transferor over the adjusted basis of such property immediately after such transfer.
(c) Character of includible gain
For purposes of subsection (a)—
(1) The character of the includible gain shall be determined as if the property had actually been sold or exchanged by the transferor, and any activities of the trust with respect to the sale or exchange of the property shall be deemed to be activities of the transferor, and
(2) the portion of the includible gain subject to the provisions of section 1245 and section 1250 shall be determined in accordance with regulations prescribed by the Secretary.
(d) Special rules
(1) Short sales
If the trust sells the property referred to in subsection (a) in a short sale within the 2-year period referred to in such subsection, such 2-year period shall be extended to the date of the closing of such short sale.
(2) Substituted basis property
For purposes of this section, in the case of any property held by the trust which has a basis determined in whole or in part by reference to the basis of any other property which was transferred to the trust—
(A) the initial transfer of such property in trust by the transferor shall be treated as having occurred on the date of the initial transfer in trust of such other property,
(B) subsections (a)(1)(B) and (b)(2) shall be applied by taking into account the fair market value and the adjusted basis of such other property, and
(C) the amount determined under subsection (b)(2) with respect to such other property shall be allocated (under regulations prescribed by the Secretary) among such other property and all properties held by the trust which have a basis determined in whole or in part by reference to the basis of such other property.
(e) Exceptions
Subsection (a) shall not apply to property—
(1) acquired by the trust from a decedent or which passed to a trust from a decedent (within the meaning of section 1014), or
(2) acquired by a pooled income fund (as defined in section 642(c)(5)), or
(3) acquired by a charitable remainder annuity trust (as defined in section 664(d)(1)) or a charitable remainder unitrust (as defined in sections 664(d)(2) and (3)), or
(4) if the sale or exchange of the property occurred after the death of the transferor.
(f) Special rule for installment sales
If the trust reports income under section 453 on any sale or exchange to which subsection (a) applies, under regulations prescribed by the Secretary—
(1) subsection (a) (other than the 2-year requirement of paragraph (1)(A) thereof) shall be applied as if each installment were a separate sale or exchange of property to which such subsection applies, and
(2) the term "includible gain" shall not include any portion of an installment received by the trust after the death of the transferor.
(Added
Amendments
1986—Subsec. (a)(2)(B).
1980—Subsec. (f).
1978—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (b)(1).
Subsec. (d).
Subsec. (f)(1).
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1980 Amendment
For effective date of amendment by
Effective Date of 1978 Amendment
Section 701(p)(5) of
"(A) Except as provided in subparagraph (B), the amendment made by this subsection [amending this section] shall apply to transfers in trust made after May 21, 1976.
"(B) The amendment made by paragraph (4) [repealing section 1402(b)(1)(K) of
Effective Date
Section applicable to transfers in trust made after May 21, 1976, see section 701(h) of
Repeals
Section 1402(b)(1)(K) of
Section Referred to in Other Sections
This section is referred to in
§645. Taxable year of trusts
(a) In general
For purposes of this subtitle, the taxable year of any trust shall be the calendar year.
(b) Exception for trusts exempt from tax and charitable trusts
Subsection (a) shall not apply to a trust exempt from taxation under section 501(a) or to a trust described in section 4947(a)(1).
(Added
Effective Date; Transition Rule
Section 1403(c) of
"(1)
"(2)
Application of Transition Rules to Trust Beneficiaries to Which Section 664 Applies
"(1) If a beneficiary of a trust to which section 664 of the 1986 Code applies elects (at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe) to have this paragraph apply, such beneficiary shall be entitled to the benefits of section 1403(c)(2) of the Reform Act [
"(2) Any trust beneficiary may elect (at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe) to waive the benefits of section 1403(c)(2) of the Reform Act.
"(3)(A) For purposes of determining the gross income of any pass-thru entity, such pass-thru entity shall not be allowed the benefits of section 806(e)(2)(C) [
"(B) For purposes of subparagraph (A), the term 'pass-thru entity' means any trust, partnership, S corporation, or common trust fund.
"(4) If any trust was required to change its taxable year by the amendments made by section 1403 of the Reform Act [
Section Referred to in Other Sections
This section is referred to in
Subpart B—Trusts Which Distribute Current Income Only
Subpart Referred to in Other Sections
This subpart is referred to in
§651. Deduction for trusts distributing current income only
(a) Deduction
In the case of any trust the terms of which—
(1) provide that all of its income is required to be distributed currently, and
(2) do not provide that any amounts are to be paid, permanently set aside, or used for the purposes specified in section 642(c) (relating to deduction for charitable, etc., purposes),
there shall be allowed as a deduction in computing the taxable income of the trust the amount of the income for the taxable year which is required to be distributed currently. This section shall not apply in any taxable year in which the trust distributes amounts other than amounts of income described in paragraph (1).
(b) Limitation on deduction
If the amount of income required to be distributed currently exceeds the distributable net income of the trust for the taxable year, the deduction shall be limited to the amount of the distributable net income. For this purpose, the computation of distributable net income shall not include items of income which are not included in the gross income of the trust and the deductions allocable thereto.
(Aug. 16, 1954, ch. 736,
Cross References
Deduction for estates and trusts accumulating income or distributing copies, see
Section Referred to in Other Sections
This section is referred to in
§652. Inclusion of amounts in gross income of beneficiaries of trusts distributing current income only
(a) Inclusion
Subject to subsection (b), the amount of income for the taxable year required to be distributed currently by a trust described in section 651 shall be included in the gross income of the beneficiaries to whom the income is required to be distributed, whether distributed or not. If such amount exceeds the distributable net income, there shall be included in the gross income of each beneficiary an amount which bears the same ratio to distributable net income as the amount of income required to be distributed to such beneficiary bears to the amount of income required to be distributed to all beneficiaries.
(b) Character of amounts
The amounts specified in subsection (a) shall have the same character in the hands of the beneficiary as in the hands of the trust. For this purpose, the amounts shall be treated as consisting of the same proportion of each class of items entering into the computation of distributable net income of the trust as the total of each class bears to the total distributable net income of the trust, unless the terms of the trust specifically allocate different classes of income to different beneficiaries. In the application of the preceding sentence, the items of deduction entering into the computation of distributable net income shall be allocated among the items of distributable net income in accordance with regulations prescribed by the Secretary.
(c) Different taxable years
If the taxable year of a beneficiary is different from that of the trust, the amount which the beneficiary is required to include in gross income in accordance with the provisions of this section shall be based upon the amount of income of the trust for any taxable year or years of the trust ending within or with his taxable year.
(Aug. 16, 1954, ch. 736,
Amendments
1976—Subsec. (b).
Cross References
Inclusion of amounts in gross income of beneficiaries of estates and trusts accumulating income or distributing corpus, see
Section Referred to in Other Sections
This section is referred to in
Subpart C—Estates and Trusts Which May Accumulate Income or Which Distribute Corpus
Amendments
1969—
Subpart Referred to in Other Sections
This subpart is referred to in
1 So in original. Does not conform to section catchline.
§661. Deduction for estates and trusts accumulating income or distributing corpus
(a) Deduction
In any taxable year there shall be allowed as a deduction in computing the taxable income of an estate or trust (other than a trust to which subpart B applies), the sum of—
(1) any amount of income for such taxable year required to be distributed currently (including any amount required to be distributed which may be paid out of income or corpus to the extent such amount is paid out of income for such taxable year); and
(2) any other amounts properly paid or credited or required to be distributed for such taxable year;
but such deduction shall not exceed the distributable net income of the estate or trust.
(b) Character of amounts distributed
The amount determined under subsection (a) shall be treated as consisting of the same proportion of each class of items entering into the computation of distributable net income of the estate or trust as the total of each class bears to the total distributable net income of the estate or trust in the absence of the allocation of different classes of income under the specific terms of the governing instrument. In the application of the preceding sentence, the items of deduction entering into the computation of distributable net income (including the deduction allowed under section 642(c)) shall be allocated among the items of distributable net income in accordance with regulations prescribed by the Secretary.
(c) Limitation on deduction
No deduction shall be allowed under subsection (a) in respect of any portion of the amount allowed as a deduction under that subsection (without regard to this subsection) which is treated under subsection (b) as consisting of any item of distributable net income which is not included in the gross income of the estate or trust.
(Aug. 16, 1954, ch. 736,
Amendments
1983—Subsec. (a).
1982—Subsec. (a).
1976—Subsec. (b).
Cross References
Deduction for trusts distributing current income only, see
Section Referred to in Other Sections
This section is referred to in
§662. Inclusion of amounts in gross income of beneficiaries of estates and trusts accumulating income or distributing corpus
(a) Inclusion
Subject to subsection (b), there shall be included in the gross income of a beneficiary to whom an amount specified in section 661(a) is paid, credited, or required to be distributed (by an estate or trust described in section 661), the sum of the following amounts:
(1) Amounts required to be distributed currently
The amount of income for the taxable year required to be distributed currently to such beneficiary, whether distributed or not. If the amount of income required to be distributed currently to all beneficiaries exceeds the distributable net income (computed without the deduction allowed by section 642(c), relating to deduction for charitable, etc., purposes) of the estate or trust, then, in lieu of the amount provided in the preceding sentence, there shall be included in the gross income of the beneficiary an amount which bears the same ratio to distributable net income (as so computed) as the amount of income required to be distributed currently to such beneficiary bears to the amount required to be distributed currently to all beneficiaries. For purposes of this section, the phrase "the amount of income for the taxable year required to be distributed currently" includes any amount required to be paid out of income or corpus to the extent such amount is paid out of income for such taxable year.
(2) Other amounts distributed
All other amounts properly paid, credited, or required to be distributed to such beneficiary for the taxable year. If the sum of—
(A) the amount of income for the taxable year required to be distributed currently to all beneficiaries, and
(B) all other amounts properly paid, credited, or required to be distributed to all beneficiaries
exceeds the distributable net income of the estate or trust, then, in lieu of the amount provided in the preceding sentence, there shall be included in the gross income of the beneficiary an amount which bears the same ratio to distributable net income (reduced by the amounts specified in (A)) as the other amounts properly paid, credited or required to be distributed to the beneficiary bear to the other amounts properly paid, credited, or required to be distributed to all beneficiaries.
(b) Character of amounts
The amounts determined under subsection (a) shall have the same character in the hands of the beneficiary as in the hands of the estate or trust. For this purpose, the amounts shall be treated as consisting of the same proportion of each class of items entering into the computation of distributable net income as the total of each class bears to the total distributable net income of the estate or trust unless the terms of the governing instrument specifically allocate different classes of income to different beneficiaries. In the application of the preceding sentence, the items of deduction entering into the computation of distributable net income (including the deduction allowed under section 642(c)) shall be allocated among the items of distributable net income in accordance with regulations prescribed by the Secretary. In the application of this subsection to the amount determined under paragraph (1) of subsection (a), distributable net income shall be computed without regard to any portion of the deduction under section 642(c) which is not attributable to income of the taxable year.
(c) Different taxable years
If the taxable year of a beneficiary is different from that of the estate or trust, the amount to be included in the gross income of the beneficiary shall be based on the distributable net income of the estate or trust and the amounts properly paid, credited, or required to be distributed to the beneficiary during any taxable year or years of the estate or trust ending within or with his taxable year.
(Aug. 16, 1954, ch. 736,
Amendments
1976—Subsec. (b).
Cross References
Inclusion of amounts in gross income of beneficiaries of trusts distributing current income only, see
Section Referred to in Other Sections
This section is referred to in
§663. Special rules applicable to sections 661 and 662
(a) Exclusions
There shall not be included as amounts falling within section 661(a) or 662(a)—
(1) Gifts, bequests, etc.
Any amount which, under the terms of the governing instrument, is properly paid or credited as a gift or bequest of a specific sum of money or of specific property and which is paid or credited all at once or in not more than 3 installments. For this purpose an amount which can be paid or credited only from the income of the estate or trust shall not be considered as a gift or bequest of a specific sum of money.
(2) Charitable, etc., distributions
Any amount paid or permanently set aside or otherwise qualifying for the deduction provided in section 642(c) (computed without regard to sections 508(d), 681, and 4948(c)(4)).
(3) Denial of double deduction
Any amount paid, credited, or distributed in the taxable year, if section 651 or section 661 applied to such amount for a preceding taxable year of an estate or trust because credited or required to be distributed in such preceding taxable year.
(b) Distributions in first sixty-five days of taxable year
(1) General rule
If within the first 65 days of any taxable year of a trust, an amount is properly paid or credited, such amount shall be considered paid or credited on the last day of the preceding taxable year.
(2) Limitation
Paragraph (1) shall apply with respect to any taxable year of a trust only if the fiduciary of such trust elects, in such manner and at such time as the Secretary prescribes by regulations, to have paragraph (1) apply for such taxable year.
(c) Separate shares treated as separate trusts
For the sole purpose of determining the amount of distributable net income in the application of sections 661 and 662, in the case of a single trust having more than one beneficiary, substantially separate and independent shares of different beneficiaries in the trust shall be treated as separate trusts. The existence of such substantially separate and independent shares and the manner of treatment as separate trusts, including the application of subpart D, shall be determined in accordance with regulations prescribed by the Secretary.
(Aug. 16, 1954, ch. 736,
Amendments
1976—Subsecs. (b)(2), (c).
1969—Subsec. (a)(2).
Subsec. (b)(2).
Effective Date of 1969 Amendment
Amendment by section 101(j)(17) of
Amendment by section 331(b) of
Section Referred to in Other Sections
This section is referred to in
§664. Charitable remainder trusts
(a) General rule
Notwithstanding any other provision of this subchapter, the provisions of this section shall, in accordance with regulations prescribed by the Secretary, apply in the case of a charitable remainder annuity trust and a charitable remainder unitrust.
(b) Character of distributions
Amounts distributed by a charitable remainder annuity trust or by a charitable remainder unitrust shall be considered as having the following characteristics in the hands of a beneficiary to whom is paid the annuity described in subsection (d)(1)(A) or the payment described in subsection (d)(2)(A):
(1) First, as amounts of income (other than gains, and amounts treated as gains, from the sale or other disposition of capital assets) includible in gross income to the extent of such income of the trust for the year and such undistributed income of the trust for prior years;
(2) Second, as a capital gain to the extent of the capital gain of the trust for the year and the undistributed capital gain of the trust for prior years;
(3) Third, as other income to the extent of such income of the trust for the year and such undistributed income of the trust for prior years; and
(4) Fourth, as a distribution of trust corpus.
For purposes of this section, the trust shall determine the amount of its undistributed capital gain on a cumulative net basis.
(c) Exemption from income taxes
A charitable remainder annuity trust and a charitable remainder unitrust shall, for any taxable year, not be subject to any tax imposed by this subtitle, unless such trust, for such year, has unrelated business taxable income (within the meaning of section 512, determined as if part III of subchapter F applied to such trust).
(d) Definitions
(1) Charitable remainder annuity trust
For purposes of this section, a charitable remainder annuity trust is a trust—
(A) from which a sum certain (which is not less than 5 percent of the initial net fair market value of all property placed in trust) is to be paid, not less often than annually, to one or more persons (at least one of which is not an organization described in section 170(c) and, in the case of individuals, only to an individual who is living at the time of the creation of the trust) for a term of years (not in excess of 20 years) or for the life or lives of such individual or individuals,
(B) from which no amount other than the payments described in subparagraph (A) may be paid to or for the use of any person other than an organization described in section 170(c), and
(C) following the termination of the payments described in subparagraph (A), the remainder interest in the trust is to be transferred to, or for the use of, an organization described in section 170(c) or is to be retained by the trust for such a use.
(2) Charitable remainder unitrust
For purposes of this section, a charitable remainder unitrust is a trust—
(A) from which a fixed percentage (which is not less than 5 percent) of the net fair market value of its assets, valued annually, is to be paid, not less often than annually, to one or more persons (at least one of which is not an organization described in section 170(c) and, in the case of individuals, only to an individual who is living at the time of the creation of the trust) for a term of years (not in excess of 20 years) or for the life or lives of such individual or individuals,
(B) from which no amount other than the payments described in subparagraph (A) may be paid to or for the use of any person other than an organization described in section 170(c), and
(C) following the termination of the payments described in subparagraph (A), the remainder interest in the trust is to be transferred to, or for the use of, an organization described in section 170(c) or is to be retained by the trust for such a use.
(3) Exception
Notwithstanding the provisions of paragraphs (2)(A) and (B), the trust instrument may provide that the trustee shall pay the income beneficiary for any year—
(A) the amount of the trust income, if such amount is less than the amount required to be distributed under paragraph (2)(A), and
(B) any amount of the trust income which is in excess of the amount required to be distributed under paragraph (2)(A), to the extent that (by reason of subparagraph (A)) the aggregate of the amounts paid in prior years was less than the aggregate of such required amounts.
(e) Valuation for purposes of charitable contribution
For purposes of determining the amount of any charitable contribution, the remainder interest of a charitable remainder annuity trust or charitable remainder unitrust shall be computed on the basis that an amount equal to 5 percent of the net fair market value of its assets (or a greater amount, if required under the terms of the trust instrument) is to be distributed each year.
(f) Certain contingencies permitted
(1) General rule
If a trust would, but for a qualified contingency, meet the requirements of paragraph (1)(A) or (2)(A) of subsection (d), such trust shall be treated as meeting such requirements.
(2) Value determined without regard to qualified contingency
For purposes of determining the amount of any charitable contribution (or the actuarial value of any interest), a qualified contingency shall not be taken into account.
(3) Qualified contingency
For purposes of this subsection, the term "qualified contingency" means any provision of a trust which provides that, upon the happening of a contingency, the payments described in paragraph (1)(A) or (2)(A) of subsection (d) (as the case may be) will terminate not later than such payments would otherwise terminate under the trust.
(Added
Amendments
1984—Subsec. (f).
1976—Subsec. (a).
Effective Date of 1984 Amendment
Amendment by
Effective Date
Section applicable to transfers in trust made after July 31, 1969, see section 201(g)(5), set out as an Effective Date of 1969 Amendment note under
Section Referred to in Other Sections
This section is referred to in
Subpart D—Treatment of Excess Distributions by Trusts
Amendments
1976—
1969—
1962—
Subpart Referred to in Other Sections
This subpart is referred to in
§665. Definitions applicable to subpart D
(a) Undistributed net income
For purposes of this subpart, the term "undistributed net income" for any taxable year means the amount by which distributable net income of the trust for such taxable year exceeds the sum of—
(1) the amounts for such taxable year specified in paragraphs (1) and (2) of section 661(a), and
(2) the amount of taxes imposed on the trust attributable to such distributable net income.
(b) Accumulation distribution
For purposes of this subpart, the term "accumulation distribution" means, for any taxable year of the trust, the amount by which—
(1) the amounts specified in paragraph (2) of section 661(a) for such taxable year, exceed
(2) distributable net income for such year reduced (but not below zero) by the amounts specified in paragraph (1) of section 661(a).
For purposes of section 667 (other than subsection (c) thereof, relating to multiple trusts), the amounts specified in paragraph (2) of section 661(a) shall not include amounts properly paid, credited, or required to be distributed to a beneficiary from a trust (other than a foreign trust) as income accumulated before the birth of such beneficiary or before such beneficiary attains the age of 21. If the amounts properly paid, credited, or required to be distributed by the trust for the taxable year do not exceed the income of the trust for such year, there shall be no accumulation distribution for such year.
(c) Special rule applicable to distributions by certain foreign trusts
For purposes of this subpart, any amount paid to a United States person which is from a payor who is not a United States person and which is derived directly or indirectly from a foreign trust created by a United States person shall be deemed in the year of payment to have been directly paid by the foreign trust.
(d) Taxes imposed on the trust
For purposes of this subpart—
(1) In general
The term "taxes imposed on the trust" means the amount of the taxes which are imposed for any taxable year of the trust under this chapter (without regard to this subpart or part IV of subchapter A) and which, under regulations prescribed by the Secretary, are properly allocable to the undistributed portions of distributable net income and gains in excess of losses from sales or exchanges of capital assets. The amount determined in the preceding sentence shall be reduced by any amount of such taxes deemed distributed under section 666(b) and (c) or 669(d) and (e) 1 to any beneficiary.
(2) Foreign trusts
In the case of any foreign trust, the term "taxes imposed on the trust" includes the amount, reduced as provided in the last sentence of paragraph (1), of any income, war profits, and excess profits taxes imposed by any foreign country or possession of the United States on such foreign trust which, as determined under paragraph (1), are so properly allocable.
(e) Preceding taxable year
For purposes of this subpart—
(1) In the case of a foreign trust created by a United States person, the term "preceding taxable year" does not include any taxable year of the trust to which this part does not apply.
(2) In the case of a preceding taxable year with respect to which a trust qualified, without regard to this subpart, under the provisions of subpart B, for purposes of the application of this subpart to such trust for such taxable year, such trust shall, in accordance with regulations prescribed by the Secretary, be treated as a trust to which subpart C applies.
(Aug. 16, 1954, ch. 736,
References in Text
Section 669, referred to in subsec. (d)(1), was repealed by
Amendments
1990—Subsec. (e).
"(1) in the case of a trust (other than a foreign trust created by a United States person), the term 'preceding taxable year' does not include any taxable year of the trust—
"(A) which precedes by more than 5 years the taxable year of the trust in which an accumulation distribution is made, if it is made in a taxable year beginning before January 1, 1974, or
"(B) which begins before January 1, 1969, in the case of an accumulation distribution made during a taxable year beginning after December 31, 1973, and
"(2) in the case of a foreign trust created by a United States person, such term does not include any taxable year of the trust to which this part does not apply.
In the case of a preceding taxable year with respect to which a trust qualifies (without regard to this subpart) under the provisions of subpart B, for purposes of the application of this subpart to such trust for such taxable year, such trust shall, in accordance with regulations prescribed by the Secretary, be treated as a trust to which subpart C applies."
1986—Subsec. (d)(1).
1978—Subsec. (d).
1976—Subsec. (b).
Subsecs. (d), (e).
Subsec. (e)(1).
Subsecs. (f), (g).
1971—Subsec. (g).
1969—Subsec. (a)(2).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsecs. (f), (g).
1962—Subsec. (b).
Subsecs. (c) to (e).
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1978 Amendment
Section 701(q)(3)(A) of
Effective Date of 1976 Amendment
Amendment by section 701(b), (c), (d)(2), (3) of
Effective Date of 1971 Amendment
Section 306(a) of
Effective Date of 1969 Amendment
Section 331(d) of
"(1)
"(2)
"(A) Amounts paid, credited, or required to be distributed by a trust (other than a foreign trust created by a United States person) on or before the last day of a taxable year of the trust beginning before January 1, 1974, shall not be deemed to be accumulation distributions to the extent that such amounts were accumulated by a trust in taxable years of such trust beginning before January 1, 1969, and would have been excepted from the definition of an accumulation distribution by reason of paragraph (1), (2), (3), or (4) of section 665(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as in effect on December 31, 1968, if they had been distributed on the last day of the last taxable year of the trust beginning before January 1, 1969.
"(B) For taxable years of a trust beginning before January 1, 1970, the first sentence of section 666(a) of the Internal Revenue Code of 1986 (as amended by this section) shall not apply, and the amount of the accumulation distribution of the trust for such taxable years shall be deemed to be an amount within the meaning of paragraph (2) of section 661(a) distributed on the last day of each of the preceding taxable years to the extent that such amount exceeds the total of any undistributed net income for any taxable years intervening between the taxable year with respect of which the accumulation distribution is determined and such preceding taxable year.
"(C) In the case of a trust which was in existence on December 31, 1969, section 669 of the Internal Revenue Code of 1986, as amended by this section, shall not apply to capital gain distributions made to a beneficiary before January 1, 1973. If the beneficiary receives capital gain distributions from more than one such trust before January 1, 1973, the preceding sentence shall apply to capital gain distributions from only one such trust, such one to be designated by the taxpayer in accordance with regulations prescribed by the Secretary or his delegate. For purposes of the preceding sentence, capital gain distributions received from a trust qualifying under section 2056(b)(5) of the Internal Revenue Code of 1986 by a surviving spouse (who is the beneficiary of only one such trust) shall be disregarded."
Effective Date of 1962 Amendment
Amendment of section by
Savings Provision
For provisions that nothing in amendment by
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of
Section Referred to in Other Sections
This section is referred to in
1 See References in Text note below.
§666. Accumulation distribution allocated to preceding years
(a) Amount allocated
In the case of a trust which is subject to subpart C, the amount of the accumulation distribution of such trust for a taxable year shall be deemed to be an amount within the meaning of paragraph (2) of section 661(a) distributed on the last day of each of the preceding taxable years, commencing with the earliest of such years, to the extent that such amount exceeds the total of any undistributed net income for all earlier preceding taxable years. The amount deemed to be distributed in any such preceding taxable year under the preceding sentence shall not exceed the undistributed net income for such preceding taxable year. For purposes of this subsection, undistributed net income for each of such preceding taxable years shall be computed without regard to such accumulation distribution and without regard to any accumulation distribution determined for any succeeding taxable year.
(b) Total taxes deemed distributed
If any portion of an accumulation distribution for any taxable year is deemed under subsection (a) to be an amount within the meaning of paragraph (2) of section 661(a) distributed on the last day of any preceding taxable year, and such portion of such distribution is not less than the undistributed net income for such preceding taxable year, the trust shall be deemed to have distributed on the last day of such preceding taxable year an additional amount within the meaning of paragraph (2) of section 661(a). Such additional amount shall be equal to the taxes (other than the tax imposed by section 55) imposed on the trust for such preceding taxable year attributable to the undistributed net income. For purposes of this subsection, the undistributed net income and the taxes imposed on the trust for such preceding taxable year attributable to such undistributed net income shall be computed without regard to such accumulation distribution and without regard to any accumulation distribution determined for any succeeding taxable year.
(c) Pro rata portion of taxes deemed distributed
If any portion of an accumulation distribution for any taxable year is deemed under subsection (a) to be an amount within the meaning of paragraph (2) of section 661(a) distributed on the last day of any preceding taxable year and such portion of the accumulation distribution is less than the undistributed net income for such preceding taxable year, the trust shall be deemed to have distributed on the last day of such preceding taxable year an additional amount within the meaning of paragraph (2) of section 661(a). Such additional amount shall be equal to the taxes (other than the tax imposed by section 55) imposed on the trust for such taxable year attributable to the undistributed net income multiplied by the ratio of the portion of the accumulation distribution to the undistributed net income of the trust for such year. For purposes of this subsection, the undistributed net income and the taxes imposed on the trust for such preceding taxable year attributable to such undistributed net income shall be computed without regard to the accumulation distribution and without regard to any accumulation distribution determined for any succeeding taxable year.
(d) Rule when information is not available
If adequate records are not available to determine the proper application of this subpart to an amount distributed by a trust, such amount shall be deemed to be an accumulation distribution consisting of undistributed net income earned during the earliest preceding taxable year of the trust in which it can be established that the trust was in existence.
(e) Denial of refund to trusts and beneficiaries
No refund or credit shall be allowed to a trust or a beneficiary of such trust for any preceding taxable year by reason of a distribution deemed to have been made by such trust in such year under this section.
(Aug. 16, 1954, ch. 736,
Amendments
1980—Subsec. (c).
1978—Subsec. (b).
1976—Subsec. (e).
1969—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
1962—Subsec. (a).
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1969 Amendment
Amendment by
Effective Date of 1962 Amendment
Amendment by
Section Referred to in Other Sections
This section is referred to in
§667. Treatment of amounts deemed distributed by trust in preceding years
(a) General rule
The total of the amounts which are treated under section 666 as having been distributed by a trust in a preceding taxable year shall be included in the income of a beneficiary of the trust when paid, credited, or required to be distributed to the extent that such total would have been included in the income of such beneficiary under section 662(a)(2) (and, with respect to any tax-exempt interest to which section 103 applies, under section 662(b)) if such total had been paid to such beneficiary on the last day of such preceding taxable year. The tax imposed by this subtitle on a beneficiary for a taxable year in which any such amount is included in his income shall be determined only as provided in this section and shall consist of the sum of—
(1) a partial tax computed on the taxable income reduced by an amount equal to the total of such amounts, at the rate and in the manner as if this section had not been enacted,
(2) a partial tax determined as provided in subsection (b) of this section, and
(3) in the case of a foreign trust, the interest charge determined as provided in section 668.
(b) Tax on distribution
(1) In general
The partial tax imposed by subsection (a)(2) shall be determined.
(A) by determining the number of preceding taxable years of the trust on the last day of which an amount is deemed under section 666(a) to have been distributed,
(B) by taking from the 5 taxable years immediately preceding the year of the accumulation distribution the 1 taxable year for which the beneficiary's taxable income was the highest and the 1 taxable year for which his taxable income was the lowest,
(C) by adding to the beneficiary's taxable income for each of the 3 taxable years remaining after the application of subparagraph (B) an amount determined by dividing the amount deemed distributed under section 666 and required to be included in income under subsection (a) by the number of preceding taxable years determined under subparagraph (A), and
(D) by determining the average increase in tax for the 3 taxable years referred to in subparagraph (C) resulting from the application of such subparagraph.
The partial tax imposed by subsection (a)(2) shall be the excess (if any) of the average increase in tax determined under subparagraph (D), multiplied by the number of preceding taxable years determined under subparagraph (A), over the amount of taxes (other than the amount of taxes described in section 665(d)(2)) deemed distributed to the beneficiary under sections 666(b) and (c).
(2) Treatment of loss years
For purposes of paragraph (1), the taxable income of the beneficiary for any taxable year shall be deemed to be not less than zero.
(3) Certain preceding taxable years not taken into account
For purposes of paragraph (1), if the amount of the undistributed net income deemed distributed in any preceding taxable year of the trust is less than 25 percent of the amount of the accumulation distribution divided by the number of preceding taxable years to which the accumulation distribution is allocated under section 666(a), the number of preceding taxable years of the trust with respect to which an amount is deemed distributed to a beneficiary under section 666(a) shall be determined without regard to such year.
(4) Effect of other accumulation distributions
In computing the partial tax under paragraph (1) for any beneficiary, the income of such beneficiary for each of his prior taxable years shall include amounts previously deemed distributed to such beneficiary in such year under section 666 as a result of prior accumulation distributions (whether from the same or another trust).
(5) Multiple distributions in the same taxable year
In the case of accumulation distributions made from more than one trust which are includible in the income of a beneficiary in the same taxable year, the distributions shall be deemed to have been made consecutively in whichever order the beneficiary shall determine.
(6) Adjustment in partial tax for estate and generation-skipping transfer taxes attributable to partial tax
(A) In general
The partial tax shall be reduced by an amount which is equal to the pre-death portion of the partial tax multiplied by a fraction—
(i) the numerator of which is that portion of the tax imposed by
(ii) the denominator of which is the amount of the accumulation distribution which is subject to the tax imposed by
(B) Partial tax determined without regard to this paragraph
For purposes of this paragraph, the term "partial tax" means the partial tax imposed by subsection (a)(2) determined under this subsection without regard to this paragraph.
(C) Pre-death portion
For purposes of this paragraph, the pre-death portion of the partial tax shall be an amount which bears the same ratio to the partial tax as the portion of the accumulation distribution which is attributable to the period before the date of the death of the decedent or the date of the generation-skipping transfer bears to the total accumulation distribution.
(c) Special rule for multiple trusts
(1) In general
If, in the same prior taxable year of the beneficiary in which any part of the accumulation distribution from a trust (hereinafter in this paragraph referred to as "third trust") is deemed under section 666(a) to have been distributed to such beneficiary, some part of prior distributions by each of 2 or more other trusts is deemed under section 666(a) to have been distributed to such beneficiary, then subsections (b) and (c) of section 666 shall not apply with respect to such part of the accumulation distribution from such third trust.
(2) Accumulation distributions from trust not taken into account unless they equal or exceed $1,000
For purposes of paragraph (1), an accumulation distribution from a trust to a beneficiary shall be taken into account only if such distribution, when added to any prior accumulation distributions from such trust which are deemed under section 666(a) to have been distributed to such beneficiary for the same prior taxable year of the beneficiary, equals or exceeds $1,000.
(d) Special rules for foreign trust
(1) Foreign tax deemed paid by beneficiary
(A) In general
In determining the increase in tax under subsection (b)(1)(D) for any computation year, the taxes described in section 665(d)(2) which are deemed distributed under section 666(b) or (c) and added under subsection (b)(1)(C) to the taxable income of the beneficiary for any computation year shall, except as provided in subparagraphs (B) and (C), be treated as a credit against the increase in tax for such computation year under subsection (b)(1)(D).
(B) Deduction in lieu of credit
If the beneficiary did not choose the benefits of subpart A of part III of subchapter N with respect to the computation year, the beneficiary may in lieu of treating the amounts described in subparagraph (A) (without regard to subparagraph (C)) as a credit may treat such amounts as a deduction in computing the beneficiary's taxable income under subsection (b)(1)(C) for the computation year.
(C) Limitation on credit; retention of character
(i) Limitation on credit
For purposes of determining under subparagraph (A) the amount treated as a credit for any computation year, the limitations under subpart A of part III of subchapter N shall be applied separately with respect to amounts added under subsection (b)(1)(C) to the taxable income of the beneficiary for such computation year. For purposes of computing the increase in tax under subsection (b)(1)(D) for any computation year for which the beneficiary did not choose the benefits of subpart A of part III of subchapter N, the beneficiary shall be treated as having chosen such benefits for such computation year.
(ii) Retention of character
The items of income, deduction, and credit of the Trust shall retain their character (subject to the application of section 904(f)(5)) to the extent necessary to apply this paragraph.
(D) Computation year
For purposes of this paragraph, the term "computation year" means any of the three taxable years remaining after application of subsection (b)(1)(B).
(e) Retention of character of amounts distributed from accumulation trust to nonresident aliens and foreign corporations
In the case of a distribution from a trust to a nonresident alien individual or to a foreign corporation, the first sentence of subsection (a) shall be applied as if the reference to the determination of character under section 662(b) applied to all amounts instead of just to tax-exempt interest.
(Aug. 16, 1954, ch. 736,
Amendments
1986—Subsec. (b)(2).
"(A) in the case of a beneficiary who is an individual, the zero bracket amount for such year, or
"(B) in the case of a beneficiary who is a corporation, zero."
1978—Subsec. (b)(1).
Subsec. (b)(6).
Subsec. (d).
Subsec. (e).
1977—Subsec. (b)(2).
1976—
1969—Subsec. (a).
Subsec. (b).
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by section 701(q)(1)(B), (C) of
Section 702(o)(2) of
"(A) in the case of the tax imposed by
"(B) in the case of the tax imposed by
Section 701(r)(2) of
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1976 Amendment
Section 701(h) of
Effective Date of 1969 Amendment
Amendment by
Section Referred to in Other Sections
This section is referred to in
§668. Interest charge on accumulation distributions from foreign trusts
(a) General rule
For purposes of the tax determined under section 667(a), the interest charge is an amount equal to 6 percent of the partial tax computed under section 667(b) multiplied by a fraction—
(1) the numerator of which is the sum of the number of taxable years between each taxable year to which the distribution is allocated under section 666(a) and the taxable year of the distribution (counting in each case the taxable year to which the distribution is allocated but not counting the taxable year of the distribution), and
(2) the denominator of which is the number of taxable years to which the distribution is allocated under section 666(a).
(b) Limitation
The total amount of the interest charge shall not, when added to the total partial tax computed under section 667(b), exceed the amount of the accumulation distribution (other than the amount of tax deemed distributed by section 666(b) or (c)) in respect of which such partial tax was determined.
(c) Interest charge not deductible
The interest charge determined under this section shall not be allowed as a deduction for purposes of any tax imposed by this title.
(Added
Prior Provisions
A prior section 668, acts Aug. 16, 1954, ch. 736,
Amendments
1990—Subsec. (c).
Effective Date
Section 1014(d) of
Savings Provision
For provisions that nothing in amendment by
Section Referred to in Other Sections
This section is referred to in
[§669. Repealed. Pub. L. 94–455, title VII, §701(d)(1), Oct. 4, 1976, 90 Stat. 1578 ]
Section, acts Oct. 16, 1962,
Effective Date of Repeal
Repeal applicable to distributions made in taxable years beginning after Dec. 31, 1975, see section 701(h) of
Subpart E—Grantors and Others Treated as Substantial Owners
Amendments
1976—
Subpart Referred to in Other Sections
This subpart is referred to in
§671. Trust income, deductions, and credits attributable to grantors and others as substantial owners
Where it is specified in this subpart that the grantor or another person shall be treated as the owner of any portion of a trust, there shall then be included in computing the taxable income and credits of the grantor or the other person those items of income, deductions, and credits against tax of the trust which are attributable to that portion of the trust to the extent that such items would be taken into account under this chapter in computing taxable income or credits against the tax of an individual. Any remaining portion of the trust shall be subject to subparts A through D. No items of a trust shall be included in computing the taxable income and credits of the grantor or of any other person solely on the grounds of his dominion and control over the trust under section 61 (relating to definition of gross income) or any other provision of this title, except as specified in this subpart.
(Aug. 16, 1954, ch. 736,
Certain Entities Not Treated as Corporations
"(a)
"(b)
"(1) such entity was created in 1906 as a common law trust and is governed by the trust laws of the State of Minnesota,
"(2) such entity is exclusively engaged in the leasing of mineral property and activities incidental thereto, and
"(3) income interests in such entity are publicly traded as of October 22, 1986, on a national stock exchange.
"(c)
"(1)
"(A) shall be made by the board of trustees of the entity before January 1, 1991, and
"(B) shall not be valid unless accompanied by an agreement described in paragraph (2).
"(2)
"(A)
"(B)
"(i) surface rights to property the acquisition of which—
"(I) is necessary to mine mineral rights held on October 22, 1986, and
"(II) is required by a written binding agreement between the entity and an unrelated person entered into on or before October 22, 1986,
"(ii) surface rights to property which are not described in clause (i) and which—
"(I) are acquired in an exchange to which section 1031 [probably means
"(II) are necessary to mine mineral rights held on October 22, 1986,
"(iii) tangible personal property incidental to the leasing of mineral property and activities incidental thereto, or
"(iv) part of any required reserves of the entity.
"(3)
"(4)
"(d)
"(1)
"(A) such entity shall be treated as having been liquidated into a trust immediately before the period described in subsection (c)(3) in a liquidation to which section 333 of the Internal Revenue Code of 1954 (as in effect before the amendments made by this Act) applies, and
"(B) for purposes of section 333 of such Code (as so in effect)—
"(i) any person holding an income interest in such entity as of such time shall be treated as a qualified electing shareholder, and
"(ii) the earnings and profits, and the value of money or stock or securities, of such entity shall be apportioned ratably among persons described in clause (i).
The amendments made by subtitle D of this title [subtitle D (§§631–634) of title VI of
"(2)
"(3)
"(e)
"(1) a reversionary interest shall not be taken into account until it comes into possession, and
"(2) all items of income, gain, loss, deduction, and credit shall be allocated to persons holding income interests for the period of the allocation."
Section Referred to in Other Sections
This section is referred to in
§672. Definitions and rules
(a) Adverse party
For purposes of this subpart, the term "adverse party" means any person having a substantial beneficial interest in the trust which would be adversely affected by the exercise or nonexercise of the power which he possesses respecting the trust. A person having a general power of appointment over the trust property shall be deemed to have a beneficial interest in the trust.
(b) Nonadverse party
For purposes of this subpart, the term "nonadverse party" means any person who is not an adverse party.
(c) Related or subordinate party
For purposes of this subpart, the term "related or subordinate party" means any nonadverse party who is—
(1) the grantor's spouse if living with the grantor;
(2) any one of the following: The grantor's father, mother, issue, brother or sister; an employee of the grantor; a corporation or any employee of a corporation in which the stock holdings of the grantor and the trust are significant from the viewpoint of voting control; a subordinate employee of a corporation in which the grantor is an executive.
For purposes of sections 674 and 675, a related or subordinate party shall be presumed to be subservient to the grantor in respect of the exercise or nonexercise of the powers conferred on him unless such party is shown not to be subservient by a preponderance of the evidence.
(d) Rule where power is subject to condition precedent
A person shall be considered to have a power described in this subpart even though the exercise of the power is subject to a precedent giving of notice or takes effect only on the expiration of a certain period after the exercise of the power.
(e) Grantor treated as holding any power or interest of grantor's spouse
(1) In general
For purposes of this subpart, a grantor shall be treated as holding any power or interest held by—
(A) any individual who was the spouse of the grantor at the time of the creation of such power or interest, or
(B) any individual who became the spouse of the grantor after the creation of such power or interest, but only with respect to periods after such individual became the spouse of the grantor.
(2) Marital status
For purposes of paragraph (1)(A), an individual legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married.
(f) Special rule where grantor is foreign person
(1) In general
If—
(A) but for this subsection, a foreign person would be treated as the owner of any portion of a trust, and
(B) such trust has a beneficiary who is a United States person,
such beneficiary shall be treated as the grantor of such portion to the extent such beneficiary has made transfers of property by gift (directly or indirectly) to such foreign person. For purposes of the preceding sentence, any gift shall not be taken into account to the extent such gift would be excluded from taxable gifts under section 2503(b).
(2) Regulations
The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection.
(Aug. 16, 1954, ch. 736,
Amendments
1990—Subsec. (f).
1988—Subsec. (e).
1986—Subsec. (e).
Effective Date of 1990 Amendment
Section 11343(b) of
"(1) any trust created after the date of the enactment of this Act [Nov. 5, 1990], and
"(2) any portion of a trust created on or before such date which is attributable to amounts contributed to the trust after such date."
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1986 Amendment
Section 1401(b) of
Section Referred to in Other Sections
This section is referred to in
§673. Reversionary interests
(a) General rule
The grantor shall be treated as the owner of any portion of a trust in which he has a reversionary interest in either the corpus or the income therefrom, if, as of the inception of that portion of the trust, the value of such interest exceeds 5 percent of the value of such portion.
(b) Reversionary interest taking effect at death of minor lineal descendant beneficiary
In the case of any beneficiary who—
(1) is a lineal descendant of the grantor, and
(2) holds all of the present interests in any portion of a trust,
the grantor shall not be treated under subsection (a) as the owner of such portion solely by reason of a reversionary interest in such portion which takes effect upon the death of such beneficiary before such beneficiary attains age 21.
(c) Special rule for determining value of reversionary interest
For purposes of subsection (a), the value of the grantor's reversionary interest shall be determined by assuming the maximum exercise of discretion in favor of the grantor.
(d) Postponement of date specified for reacquisition
Any postponement of the date specified for the reacquisition of possession or enjoyment of the reversionary interest shall be treated as a new transfer in trust commencing with the date on which the postponement is effective and terminating with the date prescribed by the postponement. However, income for any period shall not be included in the income of the grantor by reason of the preceding sentence if such income would not be so includible in the absence of such postponement.
(Aug. 16, 1954, ch. 736,
Amendments
1988—Subsecs. (c), (d).
1986—
1969—Subsec. (b).
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1986 Amendment
Section 1402(c) of
"(1)
"(2)
Effective Date of 1969 Amendment
Amendment by
Section Referred to in Other Sections
This section is referred to in
§674. Power to control beneficial enjoyment
(a) General rule
The grantor shall be treated as the owner of any portion of a trust in respect of which the beneficial enjoyment of the corpus or the income therefrom is subject to a power of disposition, exercisable by the grantor or a nonadverse party, or both, without the approval or consent of any adverse party.
(b) Exceptions for certain powers
Subsection (a) shall not apply to the following powers regardless of by whom held:
(1) Power to apply income to support of a dependent
A power described in section 677(b) to the extent that the grantor would not be subject to tax under that section.
(2) Power affecting beneficial enjoyment only after occurrence of event
A power, the exercise of which can only affect the beneficial enjoyment of the income for a period commencing after the occurrence of an event such that a grantor would not be treated as the owner under section 673 if the power were a reversionary interest; but the grantor may be treated as the owner after the occurrence of the event unless the power is relinquished.
(3) Power exercisable only by will
A power exercisable only by will, other than a power in the grantor to appoint by will the income of the trust where the income is accumulated for such disposition by the grantor or may be so accumulated in the discretion of the grantor or a nonadverse party, or both, without the approval or consent of any adverse party.
(4) Power to allocate among charitable beneficiaries
A power to determine the beneficial enjoyment of the corpus or the income therefrom if the corpus or income is irrevocably payable for a purpose specified in section 170(c) (relating to definition of charitable contributions).
(5) Power to distribute corpus
A power to distribute corpus either—
(A) to or for a beneficiary or beneficiaries or to or for a class of beneficiaries (whether or not income beneficiaries) provided that the power is limited by a reasonably definite standard which is set forth in the trust instrument; or
(B) to or for any current income beneficiary, provided that the distribution of corpus must be chargeable against the proportionate share of corpus held in trust for the payment of income to the beneficiary as if the corpus constituted a separate trust.
A power does not fall within the powers described in this paragraph if any person has a power to add to the beneficiary or beneficiaries or to a class of beneficiaries designated to receive the income or corpus, except where such action is to provide for after-born or after-adopted children.
(6) Power to withhold income temporarily
A power to distribute or apply income to or for any current income beneficiary or to accumulate the income for him, provided that any accumulated income must ultimately be payable—
(A) to the beneficiary from whom distribution or application is withheld, to his estate, or to his appointees (or persons named as alternate takers in default of appointment) provided that such beneficiary possesses a power of appointment which does not exclude from the class of possible appointees any person other than the beneficiary, his estate, his creditors, or the creditors of his estate, or
(B) on termination of the trust, or in conjunction with a distribution of corpus which is augmented by such accumulated income, to the current income beneficiaries in shares which have been irrevocably specified in the trust instrument.
Accumulated income shall be considered so payable although it is provided that if any beneficiary does not survive a date of distribution which could reasonably have been expected to occur within the beneficiary's lifetime, the share of the deceased beneficiary is to be paid to his appointees or to one or more designated alternate takers (other than the grantor or the grantor's estate) whose shares have been irrevocably specified. A power does not fall within the powers described in this paragraph if any person has a power to add to the beneficiary or beneficiaries or to a class of beneficiaries designated to receive the income or corpus except where such action is to provide for after-born or after-adopted children.
(7) Power to withhold income during disability of a beneficiary
A power exercisable only during—
(A) the existence of a legal disability of any current income beneficiary, or
(B) the period during which any income beneficiary shall be under the age of 21 years,
to distribute or apply income to or for such beneficiary or to accumulate and add the income to corpus. A power does not fall within the powers described in this paragraph if any person has a power to add to the beneficiary or beneficiaries or to a class of beneficiaries designated to receive the income or corpus, except where such action is to provide for after-born or after-adopted children.
(8) Power to allocate between corpus and income
A power to allocate receipts and disbursements as between corpus and income, even though expressed in broad language.
(c) Exception for certain powers of independent trustees
Subsection (a) shall not apply to a power solely exercisable (without the approval or consent of any other person) by a trustee or trustees, none of whom is the grantor, and no more than half of whom are related or subordinate parties who are subservient to the wishes of the grantor—
(1) to distribute, apportion, or accumulate income to or for a beneficiary or beneficiaries, or to, for, or within a class of beneficiaries; or
(2) to pay out corpus to or for a beneficiary or beneficiaries or to or for a class of beneficiaries (whether or not income beneficiaries).
A power does not fall within the powers described in this subsection if any person has a power to add to the beneficiary or beneficiaries or to a class of beneficiaries designated to receive the income or corpus, except where such action is to provide for after-born or after-adopted children. For periods during which an individual is the spouse of the grantor (within the meaning of section 672(e)(2)), any reference in this subsection to the grantor shall be treated as including a reference to such individual.
(d) Power to allocate income if limited by a standard
Subsection (a) shall not apply to a power solely exercisable (without the approval or consent of any other person) by a trustee or trustees, none of whom is the grantor or spouse living with the grantor, to distribute, apportion, or accumulate income to or for a beneficiary or beneficiaries, or to, for, or within a class of beneficiaries, whether or not the conditions of paragraph (6) or (7) of subsection (b) are satisfied, if such power is limited by a reasonably definite external standard which is set forth in the trust instrument. A power does not fall within the powers described in this subsection if any person has a power to add to the beneficiary or beneficiaries or to a class of beneficiaries designated to receive the income or corpus except where such action is to provide for after-born or after-adopted children.
(Aug. 16, 1954, ch. 736,
Amendments
1988—Subsec. (c).
1986—Subsec. (b)(2).
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Section Referred to in Other Sections
This section is referred to in
§675. Administrative powers
The grantor shall be treated as the owner of any portion of a trust in respect of which—
(1) Power to deal for less than adequate and full consideration
A power exercisable by the grantor or a nonadverse party, or both, without the approval or consent of any adverse party enables the grantor or any person to purchase, exchange, or otherwise deal with or dispose of the corpus or the income therefrom for less than an adequate consideration in money or money's worth.
(2) Power to borrow without adequate interest or security
A power exercisable by the grantor or a nonadverse party, or both, enables the grantor to borrow the corpus or income, directly or indirectly, without adequate interest or without adequate security except where a trustee (other than the grantor) is authorized under a general lending power to make loans to any person without regard to interest or security.
(3) Borrowing of the trust funds
The grantor has directly or indirectly borrowed the corpus or income and has not completely repaid the loan, including any interest, before the beginning of the taxable year. The preceding sentence shall not apply to a loan which provides for adequate interest and adequate security, if such loan is made by a trustee other than the grantor and other than a related or subordinate trustee subservient to the grantor. For periods during which an individual is the spouse of the grantor (within the meaning of section 672(e)(2)), any reference in this paragraph to the grantor shall be treated as including a reference to such individual.
(4) General powers of administration
A power of administration is exercisable in a nonfiduciary capacity by any person without the approval or consent of any person in a fiduciary capacity. For purposes of this paragraph, the term "power of administration" means any one or more of the following powers: (A) a power to vote or direct the voting of stock or other securities of a corporation in which the holdings of the grantor and the trust are significant from the viewpoint of voting control; (B) a power to control the investment of the trust funds either by directing investments or reinvestments, or by vetoing proposed investments or reinvestments, to the extent that the trust funds consist of stocks or securities of corporations in which the holdings of the grantor and the trust are significant from the viewpoint of voting control; or (C) a power to reacquire the trust corpus by substituting other property of an equivalent value.
(Aug. 16, 1954, ch. 736,
Amendments
1988—Par. (3).
Effective Date of 1988 Amendment
Amendment by
Section Referred to in Other Sections
This section is referred to in
§676. Power to revoke
(a) General rule
The grantor shall be treated as the owner of any portion of a trust, whether or not he is treated as such owner under any other provision of this part, where at any time the power to revest in the grantor title to such portion is exercisable by the grantor or a non-adverse party, or both.
(b) Power affecting beneficial enjoyment only after occurrence of event
Subsection (a) shall not apply to a power the exercise of which can only affect the beneficial enjoyment of the income for a period commencing after the occurrence of an event such that a grantor would not be treated as the owner under section 673 if the power were a reversionary interest. But the grantor may be treated as the owner after the occurrence of such event unless the power is relinquished.
(Aug. 16, 1954, ch. 736,
Amendments
1986—Subsec. (b)(2).
Effective Date of 1986 Amendment
Amendment by
Cross References
Nonadverse party defined, see
Section Referred to in Other Sections
This section is referred to in
§677. Income for benefit of grantor
(a) General rule
The grantor shall be treated as the owner of any portion of a trust, whether or not he is treated as such owner under section 674, whose income without the approval or consent of any adverse party is, or, in the discretion of the grantor or a nonadverse party, or both, may be—
(1) distributed to the grantor or the grantor's spouse;
(2) held or accumulated for future distribution to the grantor or the grantor's spouse; or
(3) applied to the payment of premiums on policies of insurance on the life of the grantor or the grantor's spouse (except policies of insurance irrevocably payable for a purpose specified in section 170(c) (relating to definition of charitable contributions)).
This subsection shall not apply to a power the exercise of which can only affect the beneficial enjoyment of the income for a period commencing after the occurrence of an event such that the grantor would not be treated as the owner under section 673 if the power were a reversionary interest; but the grantor may be treated as the owner after the occurrence of the event unless the power is relinquished.
(b) Obligations of support
Income of a trust shall not be considered taxable to the grantor under subsection (a) or any other provision of this chapter merely because such income in the discretion of another person, the trustee, or the grantor acting as trustee or co-trustee, may be applied or distributed for the support or maintenance of a beneficiary (other than the grantor's spouse) whom the grantor is legally obligated to support or maintain, except to the extent that such income is so applied or distributed. In cases where the amounts so applied or distributed are paid out of corpus or out of other than income for the taxable year, such amounts shall be considered to be an amount paid or credited within the meaning of paragraph (2) of section 661(a) and shall be taxed to the grantor under section 662.
(Aug. 16, 1954, ch. 736,
Amendments
1986—Subsec. (a).
1969—Subsec. (a)(1) to (3).
Subsec. (b).
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1969 Amendment
Section 332(b) of
Cross References
Definitions—
Adverse party, see
Non-adverse party, see
Income from interest in an estate or trust as gross income, in
Section Referred to in Other Sections
This section is referred to in
§678. Person other than grantor treated as substantial owner
(a) General rule
A person other than the grantor shall be treated as the owner of any portion of a trust with respect to which:
(1) such person has a power exercisable solely by himself to vest the corpus or the income therefrom in himself, or
(2) such person has previously partially released or otherwise modified such a power and after the release or modification retains such control as would, within the principles of sections 671 to 677, inclusive, subject to grantor of a trust to treatment as the owner thereof.
(b) Exception where grantor is taxable
Subsection (a) shall not apply with respect to a power over income, as originally granted or thereafter modified, if the grantor of the trust or a transferor (to whom section 679 applies) is otherwise treated as the owner under the provisions of this subpart other than this section.
(c) Obligations of support
Subsection (a) shall not apply to a power which enables such person, in the capacity of trustee or cotrustee, merely to apply the income of the trust to the support or maintenance of a person whom the holder of the power is obligated to support or maintain except to the extent that such income is so applied. In cases where the amounts so applied or distributed are paid out of corpus or out of other than income of the taxable year, such amounts shall be considered to be an amount paid or credited within the meaning of paragraph (2) of section 661(a) and shall be taxed to the holder of the power under section 662.
(d) Effect of renunciation or disclaimer
Subsection (a) shall not apply with respect to a power which has been renounced or disclaimed within a reasonable time after the holder of the power first became aware of its existence.
(e) Cross reference
For provision under which beneficiary of trust is treated as owner of the portion of the trust which consists of stock in an electing small business corporation, see section 1361(d).
(Aug. 16, 1954, ch. 736,
Amendments
1983—Subsec. (e).
1976—Subsec. (b).
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1976 Amendment
For effective date of amendment by
Section Referred to in Other Sections
This section is referred to in
§679. Foreign trusts having one or more United States beneficiaries
(a) Transferor treated as owner
(1) In general
A United States person who directly or indirectly transfers property to a foreign trust (other than a trust described in section 404(a)(4) Or 1 section 404A) shall be treated as the owner for his taxable year of the portion of such trust attributable to such property if for such year there is a United States beneficiary of any portion of such trust.
(2) Exceptions
Paragraph (1) shall not apply—
(A) Transfers by reason of death
To any transfer by reason of the death of the transferor.
(B) Transfers where gain is recognized to transferor
To any sale or exchange of the property at its fair market value in a transaction in which all of the gain to the transferor is realized at the time of the transfer and is recognized either at such time or is returned as provided in section 453.
(b) Trusts acquiring United States beneficiaries
If—
(1) subsection (a) applies to a trust for the transferor's taxable year, and
(2) subsection (a) would have applied to the trust for his immediately preceding taxable year but for the fact that for such preceding taxable year there was no United States beneficiary for any portion of the trust,
then, for purposes of this subtitle, the transferor shall be treated as having income for the taxable year (in addition to his other income for such year) equal to the undistributed net income (at the close of such immediately preceding taxable year) attributable to the portion of the trust referred to in subsection (a).
(c) Trusts treated as having a United States beneficiary
(1) In general
For purposes of this section, a trust shall be treated as having a United States beneficiary for the taxable year unless—
(A) under the terms of the trust, no part of the income or corpus of the trust may be paid or accumulated during the taxable year to or for the benefit of a United States person, and
(B) if the trust were terminated at any time during the taxable year, no part of the income or corpus of such trust could be paid to or for the benefit of a United States person.
(2) Attribution of ownership
For purposes of paragraph (1), an amount shall be treated as paid or accumulated to or for the benefit of a United States person if such amount is paid to or accumulated for a foreign corporation, foreign partnership, or foreign trust or estate, and—
(A) in the case of a foreign corporation, more than 50 percent of the total combined voting power of all classes of stock entitled to vote of such corporation is owned (within the meaning of section 958(a)) or is considered to be owned (within the meaning of section 958(b)) by United States shareholders (as defined in section 951(b)),
(B) in the case of a foreign partnership, a United States person is a partner of such partnership, or
(C) in the case of a foreign trust or estate, such trust or estate has a United States beneficiary (within the meaning of paragraph (1)).
(Added
Amendments
1980—Subsec. (a)(1).
Effective Date of 1980 Amendment
Amendment by
Effective Date
Section 1013(f)(1) of
"(A) foreign trusts created after May 21, 1974, and
"(B) transfers of property to foreign trusts after May 21, 1974."
Section Referred to in Other Sections
This section is referred to in
1 So in original. Probably should not be capitalized.
Subpart F—Miscellaneous
Amendments
1976—
§681. Limitation on charitable deduction
(a) Trade or business income
In computing the deduction allowable under section 642(c) to a trust, no amount otherwise allowable under section 642(c) as a deduction shall be allowed as a deduction with respect to income of the taxable year which is allocable to its unrelated business income for such year. For purposes of the preceding sentence, the term "unrelated business income" means an amount equal to the amount which, if such trust were exempt from tax under section 501(a) by reason of section 501(c)(3), would be computed as its unrelated business taxable income under section 512 (relating to income derived from certain business activities and from certain property acquired with borrowed funds).
(b) Cross reference
For disallowance of certain charitable, etc., deductions otherwise allowable under section 642(c), see sections 508(d) and 4948(c)(4).
(Aug. 16, 1954, ch. 736,
Amendments
1969—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
1968—Subsec. (c).
Effective Date of 1969 Amendment
Amendment by section 101(j)(18), (19) of
Amendment by section 121(d)(2)(B) of
Effective Date of 1968 Amendment
Section 6(c) of
Section Referred to in Other Sections
This section is referred to in
§682. Income of an estate or trust in case of divorce, etc.
(a) Inclusion in gross income of wife
There shall be included in the gross income of a wife who is divorced or legally separated under a decree of divorce or of separate maintenance (or who is separated from her husband under a written separation agreement) the amount of the income of any trust which such wife is entitled to receive and which, except for this section, would be includible in the gross income of her husband, and such amount shall not, despite any other provision of this subtitle, be includible in the gross income of such husband. This subsection shall not apply to that part of any such income of the trust which the terms of the decree, written separation agreement, or trust instrument fix, in terms of an amount of money or a portion of such income, as a sum which is payable for the support of minor children of such husband. In case such income is less than the amount specified in the decree, agreement, or instrument, for the purpose of applying the preceding sentence, such income, to the extent of such sum payable for such support, shall be considered a payment for such support.
(b) Wife considered a beneficiary
For purposes of computing the taxable income of the estate or trust and the taxable income of a wife to whom subsection (a) applies, such wife shall be considered as the beneficiary specified in this part.
(c) Cross reference
For definitions of "husband" and "wife", as used in this section, see section 7701(a)(17).
(Aug. 16, 1954, ch. 736,
Amendments
1984—Subsec. (b).
Effective Date of 1984 Amendment
Amendment by
Cross References
Deductions for payments under this section not allowed, see
Definition of husband and wife, see
Payment under this section not treated as payment for support of defendant, see
Section Referred to in Other Sections
This section is referred to in
§683. Use of trust as an exchange fund
(a) General rule
Except as provided in subsection (b), if property is transferred to a trust in exchange for an interest in other trust property and if the trust would be an investment company (within the meaning of section 351) if it were a corporation, then gain shall be recognized to the transferor.
(b) Exception for pooled income funds
Subsection (a) shall not apply to any transfer to a pooled income fund (within the meaning of section 642(c)(5)).
(Aug. 16, 1954, ch. 736,
Amendments
1976—
Effective Date of 1976 Amendment
Amendment of section by
PART II—INCOME IN RESPECT OF DECEDENTS
1 So in original. Does not conform to section catchline.
§691. Recipients of income in respect of decedents
(a) Inclusion in gross income
(1) General rule
The amount of all items of gross income in respect of a decedent which are not properly includible in respect of the taxable period in which falls the date of his death or a prior period (including the amount of all items of gross income in respect of a prior decedent, if the right to receive such amount was acquired by reason of the death of the prior decedent or by bequest, devise, or inheritance from the prior decedent) shall be included in the gross income, for the taxable year when received, of:
(A) the estate of the decedent, if the right to receive the amount is acquired by the decedent's estate from the decedent;
(B) the person who, by reason of the death of the decedent, acquires the right to receive the amount, if the right to receive the amount is not acquired by the decedent's estate from the decedent; or
(C) the person who acquires from the decedent the right to receive the amount by bequest, devise, or inheritance, if the amount is received after a distribution by the decedent's estate of such right.
(2) Income in case of sale, etc.
If a right, described in paragraph (1), to receive an amount is transferred by the estate of the decedent or a person who received such right by reason of the death of the decedent or by bequest, devise, or inheritance from the decedent, there shall be included in the gross income of the estate or such person, as the case may be, for the taxable period in which the transfer occurs, the fair market value of such right at the time of such transfer plus the amount by which any consideration for the transfer exceeds such fair market value. For purposes of this paragraph, the term "transfer" includes sale, exchange, or other disposition, or the satisfaction of an installment obligation at other than face value, but does not include transmission at death to the estate of the decedent or a transfer to a person pursuant to the right of such person to receive such amount by reason of the death of the decedent or by bequest, devise, or inheritance from the decedent.
(3) Character of income determined by reference to decedent
The right, described in paragraph (1), to receive an amount shall be treated, in the hands of the estate of the decedent or any person who acquired such right by reason of the death of the decedent, or by bequest, devise, or inheritance from the decedent, as if it had been acquired by the estate or such person in the transaction in which the right to receive the income was originally derived and the amount includible in gross income under paragraph (1) or (2) shall be considered in the hands of the estate or such person to have the character which it would have had in the hands of the decedent if the decedent had lived and received such amount.
(4) Installment obligations acquired from decedent
In the case of an installment obligation reportable by the decedent on the installment method under section 453, if such obligation is acquired by the decedent's estate from the decedent or by any person by reason of the death of the decedent or by bequest, devise, or inheritance from the decedent—
(A) an amount equal to the excess of the face amount of such obligation over the basis of the obligation in the hands of the decedent (determined under section 453B) shall, for the purpose of paragraph (1), be considered as an item of gross income in respect of the decedent; and
(B) such obligation shall, for purposes of paragraphs (2) and (3), be considered a right to receive an item of gross income in respect of the decedent, but the amount includible in gross income under paragraph (2) shall be reduced by an amount equal to the basis of the obligation in the hands of the decedent (determined under section 453B).
(5) Other rules relating to installment obligations
(A) In general
In the case of an installment obligation reportable by the decedent on the installment method under section 453, for purposes of paragraph (2)—
(i) the second sentence of paragraph (2) shall be applied by inserting "(other than the obligor)" after "or a transfer to a person",
(ii) any cancellation of such an obligation shall be treated as a transfer, and
(iii) any cancellation of such an obligation occurring at the death of the decedent shall be treated as a transfer by the estate of the decedent (or, if held by a person other than the decedent before the death of the decedent, by such person).
(B) Face amount treated as fair market value in certain cases
In any case to which the first sentence of paragraph (2) applies by reason of subparagraph (A), if the decedent and the obligor were related persons (within the meaning of section 453(f)(1)), the fair market value of the installment obligation shall be treated as not less than its face amount.
(C) Cancellation includes becoming unenforceable
For purposes of subparagraph (A), an installment obligation which becomes unenforceable shall be treated as if it were canceled.
(b) Allowance of deductions and credit
The amount of any deduction specified in section 162, 163, 164, 212, or 611 (relating to deductions for expenses, interest, taxes, and depletion) or credit specified in section 27 (relating to foreign tax credit), in respect of a decedent which is not properly allowable to the decedent in respect of the taxable period in which falls the date of his death, or a prior period, shall be allowed:
(1) Expenses, interest, and taxes
In the case of a deduction specified in sections 162, 163, 164, or 212 and a credit specified in section 27, in the taxable year when paid—
(A) to the estate of the decedent; except that
(B) if the estate of the decedent is not liable to discharge the obligation to which the deduction or credit relates, to the person who, by reason of the death of the decedent or by bequest, devise, or inheritance acquires, subject to such obligation, from the decedent an interest in property of the decedent.
(2) Depletion
In the case of the deduction specified in section 611, to the person described in subsection (a)(1)(A), (B), or (C) who, in the manner described therein, receives the income to which the deduction relates, in the taxable year when such income is received.
(c) Deduction for estate tax
(1) Allowance of deduction
(A) General rule
A person who includes an amount in gross income under subsection (a) shall be allowed, for the same taxable year, as a deduction an amount which bears the same ratio to the estate tax attributable to the net value for estate tax purposes of all the items described in subsection (a)(1) as the value for estate tax purposes of the items of gross income or portions thereof in respect of which such person included the amount in gross income (or the amount included in gross income, whichever is lower) bears to the value for estate tax purposes of all the items described in subsection (a)(1).
(B) Estates and trusts
In the case of an estate or trust, the amount allowed as a deduction under subparagraph (A) shall be computed by excluding from the gross income of the estate or trust the portion (if any) of the items described in subsection (a)(1) which is properly paid, credited, or to be distributed to the beneficiaries during the taxable year.
(C) Excess retirement accumulation tax
For purposes of this subsection, no deduction shall be allowed for the portion of the estate tax attributable to the increase in such tax under section 4980A(d).
(2) Method of computing deduction
For purposes of paragraph (1)—
(A) The term "estate tax" means the tax imposed on the estate of the decedent or any prior decedent under section 2001 or 2101, reduced by the credits against such tax.
(B) The net value for estate tax purposes of all the items described in subsection (a)(1) shall be the excess of the value for estate tax purposes of all the items described in subsection (a)(1) over the deductions from the gross estate in respect of claims which represent the deductions and credit described in subsection (b). Such net value shall be determined with respect to the provisions of section 421(c)(2), relating to the deduction for estate tax with respect to stock options to which part II of subchapter D applies.
(C) The estate tax attributable to such net value shall be an amount equal to the excess of the estate tax over the estate tax computed without including in the gross estate such net value.
(3) Special rule for generation-skipping transfers
In the case of any tax imposed by
(4) Coordination with capital gain provisions
For purposes of sections 1(h), 1201, 1202, and 1211, the amount of any gain taken into account with respect to any item described in subsection (a)(1) shall be reduced (but not below zero) by the amount of the deduction allowable under paragraph (1) of this subsection with respect to such item.
(5) Coordination with section 402(d)
For purposes of section 402(d) (other than paragraph (1)(C) thereof), the total taxable amount of any lump sum distribution shall be reduced by the amount of the deduction allowable under paragraph (1) of this subsection which is attributable to the total taxable amount (determined without regard to this paragraph).
(d) Amounts received by surviving annuitant under joint and survivor annuity contract
(1) Deduction for estate tax
For purposes of computing the deduction under subsection (c)(1)(A), amounts received by a surviving annuitant—
(A) as an annuity under a joint and survivor annuity contract where the decedent annuitant died after December 31, 1953, and after the annuity starting date (as defined in section 72(c)(4)), and
(B) during the surviving annuitant's life expectancy period, shall, to the extent included in gross income under section 72, be considered as amounts included in gross income under subsection (a).
(2) Net value for estate tax purposes
In determining the net value for estate tax purposes under subsection (c)(2)(B) for purposes of this subsection, the value for estate tax purposes of the items described in paragraph (1) of this subsection shall be computed—
(A) by determining the excess of the value of the annuity at the date of the death of the deceased annuitant over the total amount excludable from the gross income of the surviving annuitant under section 72 during the surviving annuitant's life expectancy period, and
(B) by multiplying the figure so obtained by the ratio which the value of the annuity for estate tax purposes bears to the value of the annuity at the date of the death of the deceased.
(3) Definitions
For purposes of this subsection—
(A) The term "life expectancy period" means the period beginning with the first day of the first period for which an amount is received by the surviving annuitant under the contract and ending with the close of the taxable year with or in which falls the termination of the life expectancy of the surviving annuitant. For purposes of this subparagraph, the life expectancy of the surviving annuitant shall be determined, as of the date of the death of the deceased annuitant, with reference to actuarial tables prescribed by the Secretary.
(B) The surviving annuitant's expected return under the contract shall be computed, as of the death of the deceased annuitant, with reference to actuarial tables prescribed by the Secretary.
(e) Cross reference
For application of this section to income in respect of a deceased partner, see section 753.
(Aug. 16, 1954, ch. 736,
Amendments
1993—Subsec. (c)(4).
1992—Subsec. (c)(5).
1990—Subsec. (c)(4).
1989—Subsec. (c)(5).
1988—Subsec. (c)(1)(C).
1987—Subsec. (a)(4), (5)(A).
1986—Subsec. (c)(3).
"(A) the tax imposed by section 2601 or any State inheritance tax described in section 2602(c)(5)(B) on any generation-skipping transfer shall be treated as a tax imposed by section 2001 on the estate of the deemed transferor (as defined in section 2612(a));
"(B) any property transferred in such a transfer shall be treated as if it were included in the gross estate of the deemed transferor at the value of such property taken into account for purposes of the tax imposed by section 2601; and
"(C) under regulations prescribed by the Secretary, any item of gross income subject to the tax imposed under section 2601 shall be treated as income described in subsection (a) if such item is not properly includible in the gross income of the trust on or before the date of the generation-skipping transfer (within the meaning of section 2611(a)) and if such transfer occurs at or after the death of the deemed transferor (as so defined)."
Subsec. (c)(4).
1984—Subsec. (b).
1981—Subsec. (c)(3)(A).
1980—Subsec. (a)(4).
Subsec. (a)(5).
Subsec. (c)(2)(A), (C).
Subsec. (c)(5).
1978—Subsec. (c)(4).
1976—Subsec. (c)(1)(B).
Subsec. (c)(2)(A).
Subsec. (c)(2)(C).
Subsec. (c)(3).
Subsec. (d)(3)(A), (B).
Subsecs. (e), (f).
1964—Subsec. (c)(2)(B).
Subsecs. (e), (f).
Effective Date of 1993 Amendment
Amendment by
Effective Date of 1992 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1987 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by section 301(b)(8) of
Amendment by section 1432(a)(3) of
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1981 Amendment
Amendment by
Effective Date of 1980 Amendments and Revival of Prior Law
For effective date of amendment by section 2(b)(5) of
Section 6(b) of
Amendment by
Section 101(b)(1)(D) of
Effective Date of 1978 Amendment
Section 702(b)(2) of
Effective Date of 1976 Amendment
Amendment by section 1901(a)(91) of
Amendment by section 1951(b)(10)(A) of
Amendment by section 2005(a)(4)(A), (B) of
For effective date of amendment by section 2006(b)(3) of
Effective Date of 1964 Amendment
Amendment by
Repeals
Savings Provision
Section 1951(b)(10)(B) of
Plan Amendments Not Required Until January 1, 1994
For provisions directing that if any amendments made by subtitle B [§§521–523] of title V of
Cross References
Basis of property acquired from decedent, inapplicability of section 1014 to this section, see
Income in respect of decedent as gross income, see
Partner receiving income in respect of decedent, see
Returns of decedents, see
Section Referred to in Other Sections
This section is referred to in
§692. Income taxes on members of Armed Forces on death
(a) General rule
In the case of any individual who dies while in active service as a member of the Armed Forces of the United States, if such death occurred while serving in a combat zone (as determined under section 112) or as a result of wounds, disease, or injury incurred while so serving—
(1) any tax imposed by this subtitle shall not apply with respect to the taxable year in which falls the date of his death, or with respect to any prior taxable year ending on or after the first day he so served in a combat zone after June 24, 1950; and
(2) any tax under this subtitle and under the corresponding provisions of prior revenue laws for taxable years preceding those specified in paragraph (1) which is unpaid at the date of his death (including interest, additions to the tax, and additional amounts) shall not be assessed, and if assessed the assessment shall be abated, and if collected shall be credited or refunded as an overpayment.
(b) Individuals in missing status
For purposes of this section, in the case of an individual who was in a missing status within the meaning of section 6013(f)(3)(A), the date of his death shall be treated as being not earlier than the date on which a determination of his death is made under
(c) Certain military or civilian employees of the United States dying as a result of injuries sustained overseas
(1) In general
In the case of any individual who dies while a military or civilian employee of the United States, if such death occurs as a result of wounds or injury which was incurred while the individual was a military or civilian employee of the United States and which was incurred outside the United States in a terroristic or military action, any tax imposed by this subtitle shall not apply—
(A) with respect to the taxable year in which falls the date of his death, and
(B) with respect to any prior taxable year in the period beginning with the last taxable year ending before the taxable year in which the wounds or injury were incurred.
(2) Terroristic or military action
For purposes of paragraph (1), the term "terroristic or military action" means—
(A) any terroristic activity which a preponderance of the evidence indicates was directed against the United States or any of its allies, and
(B) any military action involving the Armed Forces of the United States and resulting from violence or aggression against the United States or any of its allies (or threat thereof).
For purposes of the preceding sentence, the term "military action" does not include training exercises.
(3) Treatment of multinational forces
For purposes of paragraph (2), any multinational force in which the United States is participating shall be treated as an ally of the United States.
(Aug. 16, 1954, ch. 736,
Amendments
1986—Subsec. (b).
"(1) after December 31, 1982, in the case of service in the combat zone designated for purposes of the Vietnam conflict, or
"(2) more than 2 years after the date designated under section 112 as the date of termination of combatant activities in that zone, in the case of any combat zone other than that referred to in paragraph (1)."
1984—Subsec. (c).
Subsec. (c)(1).
Subsec. (c)(2)(A).
1983—Subsec. (b)(1).
1976—Subsec. (b).
1975—Subsec. (a).
Subsec. (b).
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1984 Amendments
Section 722(g)(5) of
"(A)
"(B)
Section 1(b) of
"(1)
"(2)
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1975 Amendment
Section 4(b) of
Refunds and Credits of Overpayments for Taxable Years Ending on or After February 28, 1961, Resulting From Application of Provisions
Section 4(c) of
Treatment of Director General of Multinational Force in Sinai
Section 722(g)(4) of
Section Referred to in Other Sections
This section is referred to in