# 26 U.S.C. § 4947: Application of taxes to certain nonexempt trusts Source: OLRC release point 119-134 . Cite pinpoints as 26 U.S.C. § 4947(a)(1). ## § 4947(a) Application of tax **§ 4947(a)(1) Charitable trusts.** For purposes of part II of subchapter F of chapter 1 (other than section 508(a), (b), and (c)) and for purposes of this chapter, a trust which is not exempt from taxation under section 501(a), all of the unexpired interests in which are devoted to one or more of the purposes described in section 170(c)(2)(B), and for which a deduction was allowed under section 170, 545(b)(2), 642(c), 2055, 2106(a)(2), or 2522 (or the corresponding provisions of prior law), shall be treated as an organization described in section 501(c)(3). For purposes of section 509(a)(3)(A), such a trust shall be treated as if organized on the day on which it first becomes subject to this paragraph. **§ 4947(a)(2) Split-interest trusts.** In the case of a trust which is not exempt from tax under section 501(a), not all of the unexpired interests in which are devoted to one or more of the purposes described in section 170(c)(2)(B), and which has amounts in trust for which a deduction was allowed under section 170, 545(b)(2), 642(c), 2055, 2106(a)(2), or 2522, section 507 (relating to termination of private foundation status), section 508(e) (relating to governing instruments) to the extent applicable to a trust described in this paragraph, section 4941 (relating to taxes on self-dealing), section 4943 (relating to taxes on excess business holdings) except as provided in subsection (b)(3), section 4944 (relating to investments which jeopardize charitable purpose) except as provided in subsection (b)(3), and section 4945 (relating to taxes on taxable expenditures) shall apply as if such trust were a private foundation. This paragraph shall not apply with respect to— **§ 4947(a)(2)(A)** any amounts payable under the terms of such trust to income beneficiaries, unless a deduction was allowed under section 170(f)(2)(B), 2055(e)(2)(B), or 2522(c)(2)(B), **§ 4947(a)(2)(B)** any amounts in trust other than amounts for which a deduction was allowed under section 170, 545(b)(2), 642(c), 2055, 2106(a)(2), or 2522, if such other amounts are segregated from amounts for which no deduction was allowable, or **§ 4947(a)(2)(C)** any amounts transferred in trust before May 27, 1969. **§ 4947(a)(3) Segregated amounts.** For purposes of paragraph (2)(B), a trust with respect to which amounts are segregated shall separately account for the various income, deduction, and other items properly attributable to each of such segregated amounts. ## § 4947(b) Special rules **§ 4947(b)(1) Regulations.** The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section. **§ 4947(b)(2) Limit to segregated amounts.** If any amounts in the trust are segregated within the meaning of subsection (a)(2)(B) of this section, the value of the net assets for purposes of subsections (c)(2) and (g) of section 507 shall be limited to such segregated amounts. **§ 4947(b)(3) Sections 4943 and 4944.** Sections 4943 and 4944 shall not apply to a trust which is described in subsection (a)(2) if— **§ 4947(b)(3)(A)** all the income interest (and none of the remainder interest) of such trust is devoted solely to one or more of the purposes described in section 170(c)(2)(B), and all amounts in such trust for which a deduction was allowed under section 170, 545(b)(2), 642(c), 2055, 2106(a)(2), or 2522 have an aggregate value not more than 60 percent of the aggregate fair market value of all amounts in such trusts, or **§ 4947(b)(3)(B)** a deduction was allowed under section 170, 545(b)(2), 642(c), 2055, 2106(a)(2), or 2522 for amounts payable under the terms of such trust to every remainder beneficiary but not to any income beneficiary. **§ 4947(b)(4) Section 507.** The provisions of section 507(a) shall not apply to a trust which is described in subsection (a)(2) by reason of a distribution of qualified employer securities (as defined in section 664(g)(4)) to an employee stock ownership plan (as defined in section 4975(e)(7)) in a qualified gratuitous transfer (as defined by section 664(g)). ## Regulations - [Treas. Reg. § 53.4947-1](/26/reg/53.4947-1.md): Application of tax. (interprets § 4947) - [Treas. Reg. § 53.4947-2](/26/reg/53.4947-2.md): Special rules. (interprets § 4947) ## Final rules - [88 FR 71287](https://www.federalregister.gov/documents/2023/10/16/2023-22286/requirements-for-type-i-and-type-iii-supporting-organizations) (2023): Requirements for Type I and Type III Supporting Organizations ## Leading cases - [Hammond v. United States, 764 F.2d 88 (2d Cir. 1985)](https://www.courtlistener.com/opinion/453339/e-wesley-hammond-charles-e-shain-deane-c-avery-evan-hill-and-walter/) ## Connections Cites: § 170 Charitable, etc., contributions and gifts; § 501 Exemption from tax on corporations, certain trusts, etc.; § 507 Termination of private foundation status; § 508 Special rules with respect to section 501(c)(3) organizations; § 509 Private foundation defined; § 664 Charitable remainder trusts; § 4941 Taxes on self-dealing; § 4943 Taxes on excess business holdings; § 4944 Taxes on investments which jeopardize charitable purpose; § 4945 Taxes on taxable expenditures; § 4975 Tax on prohibited transactions Cited by: § 508 Special rules with respect to section 501(c)(3) organizations; § 644 Taxable year of trusts; § 1473 Definitions; § 2055 Transfers for public, charitable, and religious uses; § 4943 Taxes on excess business holdings; § 6033 Returns by exempt organizations; § 6034 Returns by certain trusts; § 6049 Returns regarding payments of interest ## Amendments - 1969-12-30: [Pub. L. 91-172](/26/act/91-172.md), 83 Stat. 517 - 1976-10-04: [Pub. L. 94-455](/26/act/94-455.md), 90 Stat. 1834 - 1997-08-05: [Pub. L. 105-34](/26/act/105-34.md), 111 Stat. 1079 - 2001-06-07: [Pub. L. 107-16](/26/act/107-16.md), 115 Stat. 85 - 2004-10-22: [Pub. L. 108-357](/26/act/108-357.md), 118 Stat. 1509 - 2010-12-17: [Pub. L. 111-312](/26/act/111-312.md), 124 Stat. 3300