Source: http://www.law.cornell.edu/uscode/text/26/667?quicktabs_8=1
Timestamp: 2013-05-23 20:24:14
Document Index: 630271381

Matched Legal Cases: ['§ 667', '§ 667', '§ 667', '§ 331', '§ 701', '§ 1014', '§ 102', '§ 701', '§ 104', '§ 701', '§ 702', '§ 701', '§ 701', '§ 701', '§ 2']

26 USC § 667 - Treatment of amounts deemed distributed by trust in preceding years | Title 26 - Internal Revenue Code | U.S. Code | LII / Legal Information Institute
USC › Title 26 › Subtitle A › Chapter 1 › Subchapter J › Part I › Subpart D › § 667	prevnext
26 USC § 667 - Treatment of amounts deemed distributed by trust in preceding years
General rule The total of the amounts which are treated under section 666 as having been distributed by a trust in a preceding taxable year shall be included in the income of a beneficiary of the trust when paid, credited, or required to be distributed to the extent that such total would have been included in the income of such beneficiary under section 662
(a)(2) (and, with respect to any tax-exempt interest to which section 103 applies, under section 662
(b)) if such total had been paid to such beneficiary on the last day of such preceding taxable year. The tax imposed by this subtitle on a beneficiary for a taxable year in which any such amount is included in his income shall be determined only as provided in this section and shall consist of the sum of—
Tax on distribution (1)
In general The partial tax imposed by subsection (a)(2) shall be determined.
by determining the number of preceding taxable years of the trust on the last day of which an amount is deemed under section 666
(a) to have been distributed,
The partial tax imposed by subsection (a)(2) shall be the excess (if any) of the average increase in tax determined under subparagraph (D), multiplied by the number of preceding taxable years determined under subparagraph (A), over the amount of taxes (other than the amount of taxes described in section 665
(d)(2)) deemed distributed to the beneficiary under sections 666
Treatment of loss years For purposes of paragraph (1), the taxable income of the beneficiary for any taxable year shall be deemed to be not less than zero.
Certain preceding taxable years not taken into account For purposes of paragraph (1), if the amount of the undistributed net income deemed distributed in any preceding taxable year of the trust is less than 25 percent of the amount of the accumulation distribution divided by the number of preceding taxable years to which the accumulation distribution is allocated under section 666
(a), the number of preceding taxable years of the trust with respect to which an amount is deemed distributed to a beneficiary under section 666
(a) shall be determined without regard to such year.
Effect of other accumulation distributions In computing the partial tax under paragraph (1) for any beneficiary, the income of such beneficiary for each of his prior taxable years shall include amounts previously deemed distributed to such beneficiary in such year under section 666 as a result of prior accumulation distributions (whether from the same or another trust).
Multiple distributions in the same taxable year In the case of accumulation distributions made from more than one trust which are includible in the income of a beneficiary in the same taxable year, the distributions shall be deemed to have been made consecutively in whichever order the beneficiary shall determine.
Adjustment in partial tax for estate and generation-skipping transfer taxes attributable to partial tax (A)
In general The partial tax shall be reduced by an amount which is equal to the pre-death portion of the partial tax multiplied by a fraction—
Partial tax determined without regard to this paragraph For purposes of this paragraph, the term “partial tax” means the partial tax imposed by subsection (a)(2) determined under this subsection without regard to this paragraph.
Pre-death portion For purposes of this paragraph, the pre-death portion of the partial tax shall be an amount which bears the same ratio to the partial tax as the portion of the accumulation distribution which is attributable to the period before the date of the death of the decedent or the date of the generation-skipping transfer bears to the total accumulation distribution.
Special rule for multiple trusts (1)
In general If, in the same prior taxable year of the beneficiary in which any part of the accumulation distribution from a trust (hereinafter in this paragraph referred to as “third trust”) is deemed under section 666
(a) to have been distributed to such beneficiary, some part of prior distributions by each of 2 or more other trusts is deemed under section 666
(a) to have been distributed to such beneficiary, then subsections (b) and (c) ofsection 666 shall not apply with respect to such part of the accumulation distribution from such third trust.
Accumulation distributions from trust not taken into account unless they equal or exceed $1,000 For purposes of paragraph (1), an accumulation distribution from a trust to a beneficiary shall be taken into account only if such distribution, when added to any prior accumulation distributions from such trust which are deemed under section 666
(a) to have been distributed to such beneficiary for the same prior taxable year of the beneficiary, equals or exceeds $1,000.
Special rules for foreign trust (1)
Foreign tax deemed paid by beneficiary (A)
In general In determining the increase in tax under subsection (b)(1)(D) for any computation year, the taxes described in section 665
(d)(2) which are deemed distributed under section 666
(b) or (c) and added under subsection (b)(1)(C) to the taxable income of the beneficiary for any computation year shall, except as provided in subparagraphs (B) and (C), be treated as a credit against the increase in tax for such computation year under subsection (b)(1)(D).
Deduction in lieu of credit If the beneficiary did not choose the benefits of subpart A of part III of subchapter N with respect to the computation year, the beneficiary may in lieu of treating the amounts described in subparagraph (A) (without regard to subparagraph (C)) as a credit may treat such amounts as a deduction in computing the beneficiary’s taxable income under subsection (b)(1)(C) for the computation year.
Limitation on credit; retention of character (i)
Retention of character
The items of income, deduction, and credit of the Trust shall retain their character (subject to the application of section 904
(f)(5)) to the extent necessary to apply this paragraph.
Computation year For purposes of this paragraph, the term “computation year” means any of the three taxable years remaining after application of subsection (b)(1)(B).
Retention of character of amounts distributed from accumulation trust to nonresident aliens and foreign corporations In the case of a distribution from a trust to a nonresident alien individual or to a foreign corporation, the first sentence of subsection (a) shall be applied as if the reference to the determination of character under section 662
(b) applied to all amounts instead of just to tax-exempt interest.
(Aug. 16, 1954, ch. 736, 68A Stat. 225; Pub. L. 91–172, title III, § 331(a),Dec. 30, 1969, 83 Stat. 594; Pub. L. 94–455, title VII, § 701(a)(1), title X, § 1014(a),Oct. 4, 1976, 90 Stat. 1575, 1617; Pub. L. 95–30, title I, § 102(b)(8),May 23, 1977, 91 Stat. 138; Pub. L. 95–600, title VII, §§ 701(q)(1)(B), (C), (r)(1), 702
(o)(1),Nov. 6, 1978, 92 Stat. 2909, 2910, 2936; Pub. L. 99–514, title I, § 104(b)(10),Oct. 22, 1986, 100 Stat. 2105.)
1986—Subsec. (b)(2). Pub. L. 99–514amended par. (2) generally. Prior to amendment, par. (2) read as follows: “For purposes of paragraph (1), the taxable income of the beneficiary for any taxable year shall be deemed to be not less than—
1978—Subsec. (b)(1). Pub. L. 95–600, § 701(q)(1)(C), inserted in last sentence “(other than the amount of taxes described in section 665
(d)(2))” after “taxes”.
Subsec. (b)(6). Pub. L. 95–600, § 702(o)(1), added par. (6).
Subsec. (d). Pub. L. 95–600, § 701(q)(1)(B), added subsec. (d).
Subsec. (e). Pub. L. 95–600, § 701(r)(1), added subsec. (e).
1977—Subsec. (b)(2). Pub. L. 95–30substituted “not less than (A) in the case of a beneficiary who is an individual, the zero bracket amount for such year, or (B) in the case of a beneficiary who is a corporation, zero” for “not less than zero”.
1976—Pub. L. 94–455, §§ 701(a)(1), 1014
(a), substituted provisions relating to the treatment of amounts deemed distributed by trust in preceding years for provisions that no refund or credit be allowed to a trust for any preceding taxable year by reason of a distribution deemed to have been made by such trust in such year under section 666 or 669 and that there be allowed as a credit against the tax imposed by this subtitle on the beneficiary an amount equal to the amount of the taxes deemed distributed to such beneficiary by the trust under sections 666
(b) and (c) and 669
(d) and (e) during preceding taxable years of the trust on the last day of which the beneficiary was in being, reduced by the amount of the taxes deemed distributed to such beneficiary for such preceding taxable years to the extent that such taxes are taken into account under sections 668
(b)(1) and 669
(b) in determining the amount of the tax imposed by section 668. See section 666
1969—Subsec. (a). Pub. L. 91–172incorporated existing provisions of first sentence in provisions designated as subsec. (a), included distributions made under section 669 of this title, and struck out provisions for credit of taxes imposed on the trust against tax of beneficiary. See subsec. (b) of this section.
Subsec. (b). Pub. L. 91–172incorporated provision of first sentence for credit of taxes imposed on the trust against tax of beneficiary, and provided for interest free credit and method of computation of its amount. The second sentence had provided that the amount of taxes which may not be refunded or credited to the trust shall be an amount equal to the excess of (1) the taxes imposed on the trust for any preceding taxable year (computed without regard to the accumulation distribution for the taxable year) over (2) the amount of taxes for such preceding taxable year imposed on the undistributed portion of distributable net income of the trust for such preceding taxable year after the application of this subpart on account of the accumulation distribution determined for such taxable year.
Amendment by section 701(q)(1)(B), (C) ofPub. L. 95–600applicable to distributions made in taxable years beginning after Dec. 31, 1975, see section 701(q)(3)(A) ofPub. L. 95–600, set out as a note under section 665 of this title.
Section 702(o)(2) ofPub. L. 95–600, as amended by Pub. L. 99–514, § 2,Oct. 22, 1986, 100 Stat. 2095, provided that: “The amendment made by paragraph (1) [amending this section] shall apply—
“(A) in the case of the tax imposed by chapter 11 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954, section 2001 et seq. of this title], to the estates of decedents dying after December 31, 1979, and
“(B) in the case of the tax imposed by chapter 13 [section 2601 et seq. of this title], to any generation-skipping transfer (within the meaning of section 2611(a) of such Code) made after June 11, 1976.”
Section 701(r)(2) ofPub. L. 95–600provided that: “The amendment made by paragraph (1) [amending this section] shall apply to distributions made in taxable years beginning after December 31, 1975.”
Section 701(h) ofPub. L. 94–455provided that: “The amendments made by subsections (a), (b), (c), (d), and (f) of this section [amending this section and sections 665, 666, 1302, and 6401 of this title and repealing sections 668 and 669 of this title] shall apply to distributions made in taxable years beginning after December 31, 1975. The amendments made by subsection (e) of this section [enacting section 644 of this title and amending section 641 of this title] shall apply to transfers in trust made after May 21, 1976.”
Amendment by Pub. L. 91–172applicable to taxable years beginning after Dec. 31, 1968, see section 331(d) ofPub. L. 91–172, set out as a note under section 665 of this title.