# 26 U.S.C. § 681: Limitation on charitable deduction

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s681>. Cite pinpoints as 26 U.S.C. § 681(a)(1).

## § 681(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).

## § 681(b) Cross reference

For disallowance of certain charitable, etc., deductions otherwise allowable under section 642(c), see sections 508(d) and 4948(c)(4).

## Regulations

- [Treas. Reg. § 1.681(a)-1](/26/reg/1.681(a)-1.md): Limitation on charitable contributions deductions of trusts; scope of section 681. (interprets § 681(a))
- [Treas. Reg. § 1.681(a)-2](/26/reg/1.681(a)-2.md): Limitation on charitable contributions deduction of trusts with trade or business income. (interprets § 681(a))
- [Treas. Reg. § 1.681(b)-1](/26/reg/1.681(b)-1.md): Cross reference. (interprets § 681(b))

## Leading cases

- [Buehner v. Commissioner, 65 T.C. 723 (1976)](https://www.courtlistener.com/opinion/4704195/buehner-v-commissioner/)

## Connections

Cites: § 501 Exemption from tax on corporations, certain trusts, etc.; § 512 Unrelated business taxable income; § 642 Special rules for credits and deductions

Cited by: § 513 Unrelated trade or business; § 642 Special rules for credits and deductions

Derived from: 1939 § 162(g)

## Amendments

- 1954-08-16: [Act Aug. 16, 1954, ch. 736](/26/act/1954-ch736.md), 68A Stat. 232
- 1968-10-22: [Pub. L. 90-630](/26/act/90-630.md), 82 Stat. 1330
- 1969-12-30: [Pub. L. 91-172](/26/act/91-172.md), 83 Stat. 528