# 26 U.S.C. § 661: Deduction for estates and trusts accumulating income or distributing corpus

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s661>. Cite pinpoints as 26 U.S.C. § 661(a)(1).

## § 661(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—

**§ 661(a)(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

**§ 661(a)(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.

## § 661(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.

## § 661(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.

## Regulations

- [Treas. Reg. § 1.661(a)-1](/26/reg/1.661(a)-1.md): Estates and trusts accumulating income or distributing corpus; general. (interprets § 661(a))
- [Treas. Reg. § 1.661(a)-2](/26/reg/1.661(a)-2.md): Deduction for distributions to beneficiaries. (interprets § 661(a))
- [Treas. Reg. § 1.661(b)-1](/26/reg/1.661(b)-1.md): Character of amounts distributed; in general. (interprets § 661(b))
- [Treas. Reg. § 1.661(b)-2](/26/reg/1.661(b)-2.md): Character of amounts distributed when charitable contributions are made. (interprets § 661(b))
- [Treas. Reg. § 1.661(c)-1](/26/reg/1.661(c)-1.md): Limitation on deduction. (interprets § 661(c))
- [Treas. Reg. § 1.661(c)-2](/26/reg/1.661(c)-2.md): Illustration of the provisions of section 661. (interprets § 661(c))

## 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

- [Rollert Residuary Trust v. Commissioner, 752 F.2d 1128 (6th Cir. 1985)](https://www.courtlistener.com/opinion/446804/edward-d-rollert-residuary-trust-genesee-merchants-bank-and-trust/)
- [United California Bank v. United States, 439 U.S. 180 (1978)](https://www.courtlistener.com/opinion/109955/united-california-bank-v-united-states/)
- [Estate of O'Connor v. Commissioner, 69 T.C. 165 (1977)](https://www.courtlistener.com/opinion/4704499/estate-of-oconnor-v-commissioner/)

## Connections

Cites: § 642 Special rules for credits and deductions

Cited by: § 45 Electricity produced from certain renewable resources, etc.; § 45Y Clean electricity production credit; § 662 Inclusion of amounts in gross income of beneficiaries of estates and trusts accumulating income or distributing corpus; § 663 Special rules applicable to sections 661 and 662; § 665 Definitions applicable to subpart D; § 666 Accumulation distribution allocated to preceding years; § 677 Income for benefit of grantor; § 678 Person other than grantor treated as substantial owner; § 6166 Extension of time for payment of estate tax where estate consists largely of interest in closely held business

Derived from: 1939 § 162(b); 1939 § 162(c)

## Amendments

- 1954-08-16: [Act Aug. 16, 1954, ch. 736](/26/act/1954-ch736.md), 68A Stat. 220
- 1976-10-04: [Pub. L. 94-455](/26/act/94-455.md), 90 Stat. 1834
- 1982-09-03: [Pub. L. 97-248](/26/act/97-248.md), 96 Stat. 586
- 1983-08-05: [Pub. L. 98-67](/26/act/98-67.md), 97 Stat. 369