236 
securities were not transferred as described in 
paragraph (1), and 
‘‘(B) interest on such amount at the un-
derpayment rate under section 6621 (and com-
pounded daily) from the due date for filing the 
return of the tax imposed by chapter 11. 
‘‘SEC. 150. DEFINITIONS APPLICABLE TO EXCESS DISTRIBU-
TION RULES. 
‘‘(a) UNDISTRIBUTED NET INCOME.—For purposes 
of sections 150 through 152, the term ‘undistributed net 
income’ for any taxable year means the amount by which 
the distributable net income of the trust for such taxable 
year exceeds the sum of— 
‘‘(1) the amounts for such taxable year speci-
fied in paragraphs (1) and (2) of section 146(a), 
and 
‘‘(2) the amount of taxes imposed on the trust 
attributable to such distributable net income. 
‘‘(b) ACCUMULATION DISTRIBUTION.—For purposes 
of sections 150 through 152, except as provided in sub-
section (c), the term ‘accumulation distribution’ means, 
for any taxable year of the trust, the amount by which— 
‘‘(1) the amounts specified in paragraph (2) of 
section 146(a) for such taxable year, exceed
237 
‘‘(2) distributable net income for such year re-
duced (but not below zero) by the amounts specified 
in paragraph (1) of section 146(a). 
For purposes of section 152 (other than subsection (c) 
thereof, relating to multiple trusts), the amounts specified 
in paragraph (2) of section 146(a) shall not include 
amounts properly paid, credited, or required to be distrib-
uted to a beneficiary from a trust (other than a foreign 
trust) as income accumulated before the birth of such ben-
eficiary 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 DISTRIBU-
TIONS FROM CERTAIN DOMESTIC TRUSTS.—For purposes 
of sections 150 through 152— 
‘‘(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 undistrib-
uted net income. 
‘‘(2) QUALIFIED TRUST.—For purposes of this 
subsection, the term ‘qualified trust’ means any 
trust other than—
238 
‘‘(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 
143(f) if such section applied to such trust. 
‘‘(d) TAXES IMPOSED ON THE TRUST.—For purposes 
of sections 150 through 152— 
‘‘(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 sections 150 through 
152) and which, under regulations prescribed by the 
Secretary, are properly allocable to the undistributed 
portions of distributable net income and gains in ex-
cess of losses from sales or exchanges of capital as-
sets. The amount determined in the preceding sen-
tence shall be reduced by any amount of such taxes 
deemed distributed under section 151(b) and (c) to 
any beneficiary. 
‘‘(2) FOREIGN TRUSTS.—In the case of any for-
eign trust, the term ‘taxes imposed on the trust’ in-
cludes the amount, reduced as provided in the last 
sentence of paragraph (1), of any income, war prof-
239 
its, 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 regula-
tions 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 but for section 154(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. 
‘‘SEC. 151. ACCUMULATION DISTRIBUTION ALLOCATED TO 
PRECEDING YEARS. 
‘‘(a) AMOUNT ALLOCATED.—In the case of a trust 
which is subject to sections 146 through 149, the amount 
of the accumulation distribution of such trust for a taxable 
year shall be deemed to be an amount within the meaning 
of paragraph (2) of section 146(a) distributed on the last 
day of each of the preceding taxable years, commencing 
with the earliest of such years, to the extent that such 
amount exceeds the total of any undistributed net income 
for all earlier preceding taxable years. The amount deemed 
to be distributed in any such preceding taxable year under
240 
the preceding sentence shall not exceed the undistributed 
net income for such preceding taxable year. For purposes 
of this subsection, undistributed net income for each of 
such preceding taxable years shall be computed without 
regard to such accumulation distribution and without re-
gard to any accumulation distribution determined for any 
succeeding taxable year. 
‘‘(b) TOTAL TAXES DEEMED DISTRIBUTED.—If any 
portion of an accumulation distribution for any taxable 
year is deemed under subsection (a) to be an amount with-
in the meaning of paragraph (2) of section 146(a) distrib-
uted on the last day of any preceding taxable year, and 
such portion of such distribution is not less than the un-
distributed net income for such preceding taxable year, the 
trust shall be deemed to have distributed on the last day 
of such preceding taxable year an additional amount with-
in the meaning of paragraph (2) of section 146(a). Such 
additional amount shall be equal to the taxes imposed on 
the trust for such preceding taxable year attributable to 
the undistributed net income. For purposes of this sub-
section, the undistributed net income and the taxes im-
posed on the trust for such preceding taxable year attrib-
utable to such undistributed net income shall be computed 
without regard to such accumulation distribution and