# Prop. Treas. Reg. § 1.679-1: U.S. transferor treated as owner of foreign trust.

Proposed regulation, not in force. REG-124850-08, 89 FR 39440, published 2024-05-08 <https://www.federalregister.gov/documents/2024/05/08/2024-09434/transactions-with-foreign-trusts-and-information-reporting-on-transactions-with-foreign-trusts-and>. Interprets 26 U.S.C. § 679.

Par. 4. Section 1.679-1 is amended by revising paragraphs (c)(2) and (c)(6) to read as follows:

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(2) U.S. person —(i) In general. Subject to paragraph (c)(2)(ii) of this section, the term U.S. person means a United States person as defined in section 7701(a)(30).

(ii) Special rules —(A) Dual resident taxpayers. If a dual resident taxpayer (within the meaning of § 301.7701(b)-7(a)(1) of this chapter) computes U.S. income tax liability as a nonresident alien on the last day of the taxable year and complies with the filing requirements of § 301.7701(b)-7(b) and (c) of this chapter, the dual resident taxpayer will not be treated as a U.S. person for purposes of section 679 with respect to the portion of the taxable year the dual resident taxpayer was treated as a nonresident alien for purposes of computing U.S. income tax liability.

(B) Dual status taxpayers. If a taxpayer abandons U.S. citizenship or residence during the tax year or acquires U.S. citizenship or residence during the taxable year as provided in § 1.6012-1(b)(2)(ii), the taxpayer will not be treated as a U.S. person with respect to the portion of the taxable year the taxpayer was treated as a nonresident alien for purposes of computing U.S. income tax liability.

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(6) Obligation. The term obligation means any instrument or contractual arrangement that constitutes indebtedness under general principles of Federal income tax law (for example, a bond, note, debenture, certificate, bill receivable, account receivable, note receivable, open account, or other evidence of indebtedness), and an annuity contract that would not otherwise be classified as indebtedness under general principles of Federal income tax law.

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