Source: https://www.law.cornell.edu/uscode/text/26/667?qt-us_code_tabs=1
Timestamp: 2016-02-11 18:34:23
Document Index: 28653898

Matched Legal Cases: ['§ 667', '§ 667', '§ 667', '§\u202f331', '§\u202f701', '§\u202f1014', '§\u202f102', '§\u202f701', '§\u202f104', '§\u202f701', '§\u202f702', '§\u202f701', '§\u202f701', '§\u202f701', '§\u202f702', '§\u202f2', '§\u202f701', '§\u202f701']

26 U.S. Code § 667 - Treatment of amounts deemed distributed by trust in preceding years | US Law | LII / Legal Information Institute
U.S. Code › Title 26 › Subtitle A › Chapter 1 › Subchapter J › Part I › Subpart D › § 667 26 U.S. Code § 667 - Treatment of amounts deemed distributed by trust in preceding years
Treatment of amounts deemed distributed by trust in preceding years
(a) General ruleThe 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—
a partial tax computed on the taxable income reduced by an amount equal to the total of such amounts, at the rate and in the manner as if this section had not been enacted,
a partial tax determined as provided in subsection (b) of this section, and
in the case of a foreign trust, the interest charge determined as provided in section 668.
(b) Tax on distribution
(1) In generalThe 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,
by taking from the 5 taxable years immediately preceding the year of the accumulation distribution the 1 taxable year for which the beneficiary’s taxable income was the highest and the 1 taxable year for which his taxable income was the lowest,
by adding to the beneficiary’s taxable income for each of the 3 taxable years remaining after the application of subparagraph (B) an amount determined by dividing the amount deemed distributed under section 666 and required to be included in income under subsection (a) by the number of preceding taxable years determined under subparagraph (A), and
by determining the average increase in tax for the 3 taxable years referred to in subparagraph (C) resulting from the application of such subparagraph.
(6) Adjustment in partial tax for estate and generation-skipping transfer taxes attributable to partial tax
(A) In generalThe partial tax shall be reduced by an amount which is equal to the pre-death portion of the partial tax multiplied by a fraction—
the numerator of which is that portion of the tax imposed by chapter 11 or 13, as the case may be, which is attributable (on a proportionate basis) to amounts included in the accumulation distribution, and
the denominator of which is the amount of the accumulation distribution which is subject to the tax imposed by chapter 11 or 13, as the case may be.
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.
(c) Special rule for multiple trusts
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) of section 666 shall not apply with respect to such part of the accumulation distribution from such third trust.
(d) Special rules for foreign trust
(1) Foreign tax deemed paid by beneficiary
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.
(C) Limitation on credit; retention of character
(i) Limitation on credit
For purposes of this paragraph, the term “computation year” means any of the three taxable years remaining after application of subsection (b)(1)(B).
(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. 99–514 amended 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—
“(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.”
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. 95–30 substituted “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(e) of this title.
Pub. L. 95–600, title VII, § 702(o)(2), Nov. 6, 1978, 92 Stat. 2937, 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—
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
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.”
Pub. L. 95–600, title VII, § 701(r)(2), Nov. 6, 1978, 92 Stat. 2911, provided that: “The amendment made by paragraph (1) [amending this section] shall apply to distributions made in taxable years beginning after December 31, 1975.”
Pub. L. 94–455, title VII, § 701(h), Oct. 4, 1976, 90 Stat. 1580, provided 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.”