Source: http://taxtv.com/code/00457-USCODE-2011-title26-subtitleA-chap1-subchapH-partI-sec584/
Timestamp: 2017-10-24 04:14:09
Document Index: 278292909

Matched Legal Cases: ['§584', '§584', '§584', '§4', '§201', '§1', '§1402', '§1901', '§2131', '§101', '§404', '§301', '§103', '§1001', '§612', '§1008', '§1805', '§3001', '§302', '§302', '§3001', '§3001', '§3001', '§612', '§612', '§301', '§301', '§2138', '§1402', '§1402', '§1901', '§2131', '§1906']

IRC §584. Common trust funds - TaxTV.com
IRC §584. Common trust funds
View related content: IRC §584
For purposes of this subtitle, the term “common trust fund” means a fund maintained by a bank—
(1) exclusively for the collective investment and reinvestment of moneys contributed thereto by the bank in its capacity—
(A) as a trustee, executor, administrator, or guardian, or
(B) as a custodian of accounts—
(i) which the Secretary determines are established pursuant to a State law which is substantially similar to the Uniform Gifts to Minors Act as published by the American Law Institute, and
(ii) with respect to which the bank establishes, to the satisfaction of the Secretary, that it has duties and responsibilities similar to duties and responsibilities of a trustee or guardian; and
(2) in conformity with the rules and regulations, prevailing from time to time, of the Board of Governors of the Federal Reserve System or the Comptroller of the Currency pertaining to the collective investment of trust funds by national banks.
(b) Taxation of common trust funds
(c) Income of participants in fund
Each participant in the common trust fund in computing its taxable income shall include, whether or not distributed and whether or not distributable—
(1) as part of its gains and losses from sales or exchanges of capital assets held for not more than 1 year, its proportionate share of the gains and losses of the common trust fund from sales or exchanges of capital assets held for not more than 1 year,
(2) as part of its gains and losses from sales or exchanges of capital assets held for more than 1 year, its proportionate share of the gains and losses of the common trust fund from sales or exchanges of capital assets held for more than 1 year, and
(3) its proportionate share of the ordinary taxable income or the ordinary net loss of the common trust fund, computed as provided in subsection (d).
(d) Computation of common trust fund income
The taxable income of a common trust fund shall be computed in the same manner and on the same basis as in the case of an individual, except that—
(1) there shall be segregated the gains and losses from sales or exchanges of capital assets;
(2) after excluding all items of gain and loss from sales or exchanges of capital assets, there shall be computed—
(A) an ordinary taxable income which shall consist of the excess of the gross income over deductions; or
(B) an ordinary net loss which shall consist of the excess of the deductions over the gross income; and
(3) the deduction provided by section 170 (relating to charitable, etc., contributions and gifts) shall not be allowed.
(e) Admission and withdrawal
(f) Different taxable years of common trust fund and participant
(g) Net operating loss deduction
(h) Nonrecognition treatment for certain transfers to regulated investment companies
(A) a common trust fund transfers substantially all of its assets to one or more regulated investment companies in exchange solely for stock in the company or companies to which such assets are so transferred, and
(B) such stock is distributed by such common trust fund to participants in such common trust fund in exchange solely for their interests in such common trust fund,
(2) Basis rules
(A) Regulated investment company
(3) Treatment of assumptions of liability
(B) Special rule where assumed liabilities exceed basis
If, in any transfer referred to in paragraph (1)(A), the assumed liabilities exceed the aggregate adjusted bases (in the hands of the common trust fund) of the assets transferred to the regulated investment company or companies—
(I) notwithstanding paragraph (1), gain shall be recognized to the common trust fund on such transfer in an amount equal to such excess,
(II) the basis of the assets received by the regulated investment company or companies in such transfer shall be increased by the amount so recognized, and
(III) any adjustment to the basis of a participant’s interest in the common trust fund as a result of the gain so recognized shall be treated as occurring immediately before the exchange referred to in paragraph (1)(B).
(ii) Assumed liabilities
For purposes of clause (i), the term “assumed liabilities” means any liability of the common trust fund assumed by any regulated investment company in connection with the transfer referred to in paragraph (1)(A).
(4) Common trust fund must meet diversification rules
(i) Taxable year of common trust fund
(Aug. 16, 1954, ch. 736, 68A Stat. 203; Pub. L. 87–722, §4, Sept. 28, 1962, 76 Stat. 670; Pub. L. 88–272, title II, §201(d)(5), Feb. 26, 1964, 78 Stat. 32; Pub. L. 94–414, §1, Sept. 17, 1976, 90 Stat. 1273; Pub. L. 94–455, title XIV, §1402(b)(1)(H), (2), title XIX, §§1901(b)(1)(G), 1906(b)(13)(A), title XXI, §§2131(d), 2138, Oct. 4, 1976, 90 Stat. 1732, 1790, 1834, 1924, 1932; Pub. L. 95–30, title I, §101(d)(7), May 23, 1977, 91 Stat. 133; Pub. L. 96–223, title IV, §404(b)(3), Apr. 2, 1980, 94 Stat. 306; Pub. L. 97–34, title III, §301(b)(3), (6)(A), Aug. 13, 1981, 95 Stat. 270; Pub. L. 97–448, title I, §103(a)(2), Jan. 12, 1983, 96 Stat. 2375; Pub. L. 98–369, div. A, title X, §1001(b)(7), (e), July 18, 1984, 98 Stat. 1011, 1012; Pub. L. 99– 4, title VI, §612(b)(2), Oct. 22, 1986, 100 Stat. 2250; Pub. L. 100–647, title I, §1008(e)(5)(A), Nov. 10, 1988, 102 Stat. 3440; Pub. L. 104–188, title I, §1805(a), Aug. 20, 1996, 110 Stat. 1894; Pub. L. 106–36, title III, §3001(c)(1), June 25, 1999, 113 Stat. 183; Pub. L. 108–27, title III, §302(e)(7), May 28, 2003, 117 Stat. 764.)
2003—Subsec. (c). Pub. L. 108–27, §§302(e)(7), 303, temporarily inserted concluding provisions. See Effective and Termination Dates of 2003 Amendment note below.
1999—Subsec. (h)(3)(A). Pub. L. 106–36, §3001(c)(1)(A), struck out “, and the fact that any property transferred by the common trust fund is subject to a liability,” before “shall be disregarded”.
Subsec. (h)(3)(B)(ii). Pub. L. 106–36, §3001(c)(1)(B), added cl. (ii) and struck out heading and text of former cl. (ii). Text read as follows: “For purposes of clause (i), the term ‘assumed liabilities’ means the aggregate of—
“(I) any liability of the common trust fund assumed by any regulated investment company in connection with the transfer referred to in paragraph (1)(A), and
“(II) any liability to which property so transferred is subject.”
Subsec. (h)(3)(C). Pub. L. 106–36, §3001(c)(1)(B), added subpar. (C).
1996—Subsecs. (h), (i). Pub. L. 104–188 added subsec. (h) and redesignated former subsec. (h) as (i).
1986—Subsec. (c). Pub. L. 99– 4, §612(b)(2)(B), substituted “1 year” for “6 months” wherever appearing in pars. (1) and (2).
Pub. L. 99– 4, §612(b)(2)(A), amended subsec. (c) generally, restating subpars. (A) to (C) of former par. (1) as pars. (1) to (3) and striking out former par. (2) which read as follows: “The proportionate share of each participant in the amount of dividends or interest received by the common trust fund and to which section 116 or 128 applies shall be considered for purposes of such section as having been received by such participant.”
1984—Subsec. (c)(1)(A), (B). Pub. L. 98–369 substituted “6 months” for “1 year”, wherever appearing, applicable to property acquired after June 22, 1984, and before Jan. 1, 1988. See Effective Date of 1984 Amendment note below.
1983—Subsec. (c)(2). Pub. L. 97–448 reenacted par. (2) without change.
1981—Subsec. (c)(2). Pub. L. 97–34, §301(b)(6)(A), inserted reference to “interest” in heading and text, which continued the amendment made by Pub. L. 96–223.
Pub. L. 97–34, §301(b)(3), inserted “or 128” after “section 116”.
1980—Subsec. (c)(2). Pub. L. 96–223 inserted “or interest” after “dividends” in heading and text.
1977—Subsec. (d)(4). Pub. L. 95–30 struck out par. (4) relating to standard deduction.
1976—Subsec. (a). Pub. L. 94–414 inserted provision relating to treatment of two or more bank members of same affiliated group.
Subsec. (a)(1). Pub. L. 94–455, §2138, designated existing provisions relating to trustee, executor, administrator and guardian as subpar. (A) and added subpar. (B).
Subsec. (c)(1)(A), (B). Pub. L. 94–455, §1402(b)(2), provided that “9 months” would be changed to “1 year” wherever appearing.
Pub. L. 94–455, §1402(b)(1)(H), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.
Subsec. (c)(2). Pub. L. 94–455, §1901(b)(1)(G), struck out provisions relating to partially tax exempt interest and election of a common trust fund to amortize premiums on bonds and other obligations.
Subsec. (e). Pub. L. 94–455, §2131(d), inserted “The admission of a participant shall be treated with respect to the participant as the purchase of, or exchange for, the participating interest”.
Subsec. (g). Pub. L. 94–455, §1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
1964—Subsec. (c)(2). Pub. L. 88–272 struck out “section 34 or” before “section 116 applies”.
1962—Subsec. (a)(2). Pub. L. 87–722 inserted “or the Comptroller of the Currency” after “the Board of Governors of the Federal Reserve System”.
Section 1805(b) of Pub. L. 104–188 provided that: “The amendment made by subsection (a) [amending this section] shall apply to transfers after December 31, 1995.”
Section 1008(e)(5)(B) of Pub. L. 100–647 provided that: “The amendment made by subparagraph (A) [amending this section] shall take effect as if included in the amendments made by section 806 of the Reform Act [Pub. L. 99– 4], except that section 806(e)(1) [set out as a note under section 1378 of this title] shall be applied by substituting ‘December 31, 1987’ for ‘December 31, 1986’. For purposes of section 806(e)(2) of the Reform Act [set out as a note under section 1378 of this title]—
“(i) a participant in a common trust fund shall be treated in the same manner as a partner, and
“(ii) subparagraph (C) thereof shall be applied by substituting ‘December 31, 1987’ for ‘December 31, 1986’ and as if it did not contain the election to include all income in the short taxable year.”
Section 612(b)(2)(B) of Pub. L. 99– 4 provided that: “If the amendments made by section 1001 of the Tax Reform Act of 1984 [Pub. L. 98–369, amending this section and sections 166, 341, 402, 403, 423, 582, 631, 642, 702, 818, 852, 856, 857, 1222, 1223, 1231, 1232, 1233, 1234, 1235, 1246, 1247, and 1248 of this title] cease to apply [see Effective Date of 1984 Amendment note below], effective with respect to property to which such amendments do not apply, subsection (c) of section 584 is amended by striking out ‘6 months’ each place it appears and inserting in lieu thereof ‘1 year’.”
Amendment by section 612(b)(2) of Pub. L. 99– 4 applicable to taxable years beginning after Dec. 31, 1986, see section 612(c) of Pub. L. 99– 4, set out as a note under section 301 of this title.
Amendment by section 301(b)(3) of Pub. L. 97–34 applicable to taxable years ending after Sept. 30, 1981, and amendment by section 301(b)(6)(A) of Pub. L. 97–34 applicable to taxable years beginning after Dec. 31, 1981, see section 301(d) of Pub. L. 97–34, set out as a note under section 265 of this title.
Section 2131(f)(6) of Pub. L. 94–455 provided that: “The amendments made by subsections (d) and (e) [amending this section and section 683 of this title] shall take effect on April 8, 1976, in taxable years ending on or after such date.”
Amendment by section 1901(b)(1)(G) of Pub. L. 94–455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as an Effective Date of 1976 Amendment note under section 2 of this title.
Section 2 of Pub. L. 94–414 provided that: “The amendment made by the first section of this Act [amending this section] shall apply to taxable years beginning after December 31, 1975.”