Amended 1969, 1971, 1976
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 701(d)(3), struck out subsec. (f) which related to undistributed capital gains, and subsec. (g) which related to capital gain distribution.
- 1971 Pub. L. 92-178 Pub. L. 92–178 struck out “for such taxable year” after “undistributed capital gain” in introductory text.
- 1969 Pub. L. 91-172 Pub. L. 91–172 added subsecs. (f) and (g).
Final rules 1
(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—
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(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.
Amended 1969
- 1969 Pub. L. 91-172 Pub. L. 91–172 inserted “attributable to such distributable net income” after “on the trust”.
(b) Accumulation distribution For purposes of this subpart, except as provided in subsection (c), the term “accumulation distribution” means, for any taxable year of the trust, the amount by which—
Amended 1962, 1969, 1976, 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 507(a)(2), inserted “except as provided in subsection (c),” after “subpart,” in introductory provisions.
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 701(b), (c), inserted provisions that for purposes of sec. 667 the amounts specified in par. (2) of sec. 661(a) not include amounts paid, credited, or required to be distributed to a beneficiary from a trust as income accumulated before the birth of such beneficiary or before such beneficiary reaches 21, and that if the amounts 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 be no accumulation distribution for such year.
- 1969 Pub. L. 91-172 Pub. L. 91–172 substituted “Accumulation distribution” for “Accumulation distributions of trusts other than certain foreign trusts” in heading, combined existing provisions of subsecs. (b) and (c) defining “accumulation distribution” in the case of a trust (other than a foreign trust created by a United States person) and of a foreign trust created by a United States person, respectively, in provisions now designated as pars. (1) and (2), deleting “the amount (if in excess of $2,000)” before “by which” in introductory text and inserting “(but not below zero)” in par. (2), and deleted second sentence providing that for purposes of this subsection, the amount specified in par. (2) of section 661(a) shall be determined without regard to section 666 and excepting from “accumulation distributions”: accumulations before birth or attainment of age 21; distributions for emergency needs; distributions, where beneficiary attained specified age or ages and there were not more than 4 distributions, at intervals of 4 or more years; and final distribution of trust was made more than 9 years after date of last transfer to the trust.
- 1962 Pub. L. 87-834 Pub. L. 87–834, § 7(b)(1), substituted “Accumulation distributions of trusts other than certain foreign trusts” for “Accumulation distribution” in heading, and inserted “in the case of a trust (other than a foreign trust created by a United States person),” after “purposes of this subpart,”.
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(1) the amounts specified in paragraph (2) of section 661(a) for such taxable year, exceed
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(2) distributable net income for such year reduced (but not below zero) by the amounts specified in paragraph (1) of section 661(a).
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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) Exception for accumulation distributions from certain domestic trusts For purposes of this subpart—
Amended 1962, 1969, 1996, 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 507(a)(1), added subsec. (c).
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1904(c)(2), struck out subsec. (c) which read as follows: “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.”
- 1969 Pub. L. 91-172 Pub. L. 91–172 substituted “Special rule applicable to distributions by certain foreign trusts” for “Accumulation distribution of certain foreign trusts” in heading, inserted introductory phrase “For purposes of this subpart”, reenacted provisions of former third sentence as the subsection, struck out first sentence which defined in the case of a foreign trust created by a United States person the term “accumulation distribution”, (see subsec. (b) of this section), and deleted second sentence which stated that “For purposes of this subsection, the amount specified in paragraph (2) of section 661(a) shall be determined without regard to section 666.”
- 1962 Pub. L. 87-834 Pub. L. 87–834, § 7(b)(2), added subsec. (c) and redesignated former subsecs. (c) and (d) as (d) and (e), respectively.
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(1) In general In the case of a qualified trust, any distribution in any taxable year beginning after the date of the enactment of this subsection shall be computed without regard to any undistributed net income.
(2) Qualified trust For purposes of this subsection, the term “qualified trust” means any trust other than—
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(A) a foreign trust (or, except as provided in regulations, a domestic trust which at any time was a foreign trust), or
(B) a trust created before March 1, 1984, unless it is established that the trust would not be aggregated with other trusts under section 643(f) if such section applied to such trust.
(d) Taxes imposed on the trust For purposes of this subpart—
Amended 1962, 1969, 1976, 1978
- 1978 Pub. L. 95-600 Pub. L. 95–600 designated existing provisions as par. (1), defined “taxes imposed on the trust” to mean imposition of taxes without regard to subpart A of part IV of subchapter (A), and added par. (2).
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
- 1969 Pub. L. 91-172 Pub. L. 91–172 substituted “taxable year of the trust” for “taxable year on the trust”, “allocable to the undistributed portions of distributable net income and gains to excess of losses from sales or exchanges of capital assets” for “allocable to the undistributed portion of the distributable net income”, and “reduced by any amount of such taxes deemed distributed under section 666(b) and (c) or 669(d) and (e) to any beneficiary” for “reduced by any amount of such taxes allowed, under sections 667 and 668, as a credit to any beneficiary on account of any accumulation distribution determined for any taxable year”.
- 1962 Pub. L. 87-834 Pub. L. 87–834, § 7(b)(2), added subsec. (c) and redesignated former subsecs. (c) and (d) as (d) and (e), respectively.
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(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) to any beneficiary.
Amended 1986, 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 1604(g)(2), struck out “or 669(d) and (e)” after “666(b) and (c)”.
- 1986 Pub. L. 99-514 Pub. L. 99–514 substituted “part IV” for “subpart A of part IV”.
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(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. Under rules or regulations prescribed by the Secretary, in the case of any foreign trust of which the settlor or another person would be treated as owner of any portion of the trust under subpart E but for section 672(f), the term “taxes imposed on the trust” includes the allocable amount of any income, war profits, and excess profits taxes imposed by any foreign country or possession of the United States on the settlor or such other person in respect of trust income.
Amended 1996
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1904(b)(1), inserted at end “Under rules or regulations prescribed by the Secretary, in the case of any foreign trust of which the settlor or another person would be treated as owner of any portion of the trust under subpart E but for section 672(f), the term ‘taxes imposed on the trust’ includes the allocable amount of any income, war profits, and excess profits taxes imposed by any foreign country or possession of the United States on the settlor or such other person in respect of trust income.”
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(e) Preceding taxable year For purposes of this subpart—
Amended 1962, 1969, 1976, 1990
- 1990 Pub. L. 101-508 Pub. L. 101–508 amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “For purposes of this subpart—
“(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.”
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
- 1969 Pub. L. 91-172 Pub. L. 91–172 substituted provisions of first sentence contained in pars. 1(A) to (C) and (2) for prior first sentence which read “For purposes of this subpart, the term ‘preceding taxable year’ does not include any taxable year of the trust to which this part does not apply” and reenacted provisions of second sentence.
- 1962 Pub. L. 87-834 Pub. L. 87–834, § 7(b)(2), added subsec. (c) and redesignated former subsecs. (c) and (d) as (d) and (e), respectively.
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(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.
Amended 1976
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 701(d)(2), struck out provision that preceding taxable year does not include any taxable year of the trust which begins before Jan. 1, 1969, in the case of a capital gain distribution made during a taxable year beginning after Dec. 31, 1968.
(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.