# 26 U.S.C. § 651: Deduction for trusts distributing current income only

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s651>. Cite pinpoints as 26 U.S.C. § 651(a)(1).

## § 651(a) Deduction

In the case of any trust the terms of which—

**§ 651(a)(1)** provide that all of its income is required to be distributed currently, and

**§ 651(a)(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).

## § 651(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.

## Regulations

- [Treas. Reg. § 1.651(a)-1](/26/reg/1.651(a)-1.md): Simple trusts; deduction for distributions; in general. (interprets § 651(a))
- [Treas. Reg. § 1.651(a)-2](/26/reg/1.651(a)-2.md): Income required to be distributed currently. (interprets § 651(a))
- [Treas. Reg. § 1.651(a)-3](/26/reg/1.651(a)-3.md): Distribution of amounts other than income. (interprets § 651(a))
- [Treas. Reg. § 1.651(a)-4](/26/reg/1.651(a)-4.md): Charitable purposes. (interprets § 651(a))
- [Treas. Reg. § 1.651(a)-5](/26/reg/1.651(a)-5.md): Estates. (interprets § 651(a))
- [Treas. Reg. § 1.651(b)-1](/26/reg/1.651(b)-1.md): Deduction for distributions to beneficiaries. (interprets § 651(b))

## Final rules

- [69 FR 12](https://www.federalregister.gov/documents/2004/01/02/03-31614/definition-of-income-for-trust-purposes) (2004): Definition of Income for Trust Purposes

## Leading cases

- [Van Buren v. Commissioner, 89 T.C. 1101 (1987)](https://www.courtlistener.com/opinion/4706465/van-buren-v-commissioner/)
- [Estate of Bruchmann v. Commissioner, 53 T.C. 403 (1969)](https://www.courtlistener.com/opinion/4702798/estate-of-bruchmann-etc-v-commissioner/)
- [Trust No. 3 v. Commissioner, 33 T.C. 734 (1960)](https://www.courtlistener.com/opinion/4700567/trust-no-3-v-commissioner/)

## Connections

Cites: § 642 Special rules for credits and deductions

Cited by: § 643 Definitions applicable to subparts A, B, C, and D; § 646 Tax treatment of electing Alaska Native Settlement Trusts; § 652 Inclusion of amounts in gross income of beneficiaries of trusts distributing current income only; § 663 Special rules applicable to sections 661 and 662

Derived from: 1939 § 162(b)

## Amendments

- 1954-08-16: [Act Aug. 16, 1954, ch. 736](/26/act/1954-ch736.md), 68A Stat. 219