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26 U.S.C. § 663 — Special rules applicable to sections 661 and 662
Federal law — U.S. Code and appendices · legal_authorities
**(a) Exclusions** There shall not be included as amounts falling within section 661(a) or 662(a)—
(1) **Gifts, bequests, etc.** — Any amount which, under the terms of the governing instrument, is properly paid or credited as a gift or bequest of a specific sum of money or of specific property and which is paid or credited all at once or in not more than 3 installments. For this purpose an amount which can be paid or credited only from the income of the estate or trust shall not be considered as a gift or bequest of a specific sum of money.
(2) **Charitable, etc., distributions** — Any amount paid or permanently set aside or otherwise qualifying for the deduction provided in section 642(c) (computed without regard to sections 508(d), 681, and 4948(c)(4)).
(3) **Denial of double deduction** — Any amount paid, credited, or distributed in the taxable year, if section 651 or section 661 applied to such amount for a preceding taxable year of an estate or trust because credited or required to be distributed in such preceding taxable year.
**(b) Distributions in first sixty-five days of taxable year**
(1) **General rule** — If within the first 65 days of any taxable year of an estate or a trust, an amount is properly paid or credited, such amount shall be considered paid or credited on the last day of the preceding taxable year.
(2) **Limitation** — Paragraph (1) shall apply with respect to any taxable year of an estate or a trust only if the executor of such estate or the fiduciary of such trust (as the case may be) elects, in such manner and at such time as the Secretary prescribes by regulations, to have paragraph (1) apply for such taxable year.
**(c) Separate shares treated as separate estates or trusts** For the sole purpose of determining the amount of distributa
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Source file: Laws/federal/codes/united-states-code/title-26/section-663-special-rules-applicable-to-sections-661-and-662--821c9fdc38.md
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Source location: Title 26, Chapter 1, § 663; chapter-001-normal-taxes-and-surtaxes.md
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**(a) Exclusions** There shall not be included as amounts falling within section 661(a) or 662(a)—
(1) **Gifts, bequests, etc.** — Any amount which, under the terms of the governing instrument, is properly paid or credited as a gift or bequest of a specific sum of money or of specific property and which is paid or credited all at once or in not more than 3 installments. For this purpose an amount which can be paid or credited only from the income of the estate or trust shall not be considered as a gift or bequest of a specific sum of money.
(2) **Charitable, etc., distributions** — Any amount paid or permanently set aside or otherwise qualifying for the deduction provided in section 642(c) (computed without regard to sections 508(d), 681, and 4948(c)(4)).
(3) **Denial of double deduction** — Any amount paid, credited, or distributed in the taxable year, if section 651 or section 661 applied to such amount for a preceding taxable year of an estate or trust because credited or required to be distributed in such preceding taxable year.
**(b) Distributions in first sixty-five days of taxable year**
(1) **General rule** — If within the first 65 days of any taxable year of an estate or a trust, an amount is properly paid or credited, such amount shall be considered paid or credited on the last day of the preceding taxable year.
(2) **Limitation** — Paragraph (1) shall apply with respect to any taxable year of an estate or a trust only if the executor of such estate or the fiduciary of such trust (as the case may be) elects, in such manner and at such time as the Secretary prescribes by regulations, to have paragraph (1) apply for such taxable year.
**(c) Separate shares treated as separate estates or trusts** For the sole purpose of determining the amount of distributable net income in the application of sections 661 and 662, in the case of a single trust having more than one beneficiary, substantially separate and independent shares of different beneficiaries in the trust shall be treated as separate trusts. Rules similar to the rules of the preceding provisions of this subsection shall apply to treat substantially separate and independent shares of different beneficiaries in an estate having more than 1 beneficiary as separate estates. The existence of such substantially separate and independent shares and the manner of treatment as separate trusts or estates, including the application of subpart D, shall be determined in accordance with regulations prescribed by the Secretary.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Tax-exempt foundations** There is hereby imposed on each private foundation which is exempt from taxation under section 501(a) for the taxable year, with respect to the carrying on of its activities, a tax equal to 1.39 percent of the net investment income of such foundation for the taxable year.
**(b) Taxable foundations** There is hereby imposed on each private foundation which is not exempt from taxation under section 501(a) for the taxable year, with respect to the carrying on of its activities, a tax equal to—
(1) the amount (if any) by which the sum of (A) the tax imposed under subsection (a) (computed as if such subsection applied to such private foundation for the taxable year), plus (B) the amount of the tax which would have been imposed under section 511 for the taxable year if such private foundation had been exempt from taxation under section 501(a), exceeds
(2) the tax imposed under subtitle A on such private foundation for the taxable year.
**(c) Net investment income defined**
(1) **In general** — For purposes of subsection (a), the net investment income is the amount by which (A) the sum of the gross investment income and the capital gain net income exceeds (B) the deductions allowed by paragraph (3). Except to the extent inconsistent with the provisions of this section, net investment income shall be determined under the principles of subtitle A.
(2) **Gross investment income** — For purposes of paragraph (1), the term “gross investment income” means the gross amount of income from interest, dividends, rents, payments with respect to securities loans (as defined in section 512(a)(5)), and royalties, but not including any such income to the extent included in computing the tax imposed by section 511. Such term shall also include income from s
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Undistributed net income** For purposes of this subpart, the term “undistributed net income” for any taxable year means the amount by which distributable net income of the trust for such taxable year exceeds the sum of—
(1) the amounts for such taxable year specified in paragraphs (1) and (2) of section 661(a), and
(2) the amount of taxes imposed on the trust attributable to such distributable net income.
**(b) Accumulation distribution** For purposes of this subpart, except as provided in subsection (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 661(a) for such taxable year, exceed
(2) distributable net income for such year reduced (but not below zero) by the amounts specified in paragraph (1) of section 661(a).
For purposes of section 667 (other than subsection (c) thereof, relating to multiple trusts), the amounts specified in paragraph (2) of section 661(a) shall not include amounts properly paid, credited, or required to be distributed to a beneficiary from a trust (other than a foreign trust) as income accumulated before the birth of such beneficiary 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 distributions from certain domestic trusts** For purposes of this subpart—
(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 undistributed net income.
(2) **Qu
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 665
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Federal law — U.S. Code and appendices · legal_authorities
Page 1831
TITLE 26—INTERNAL REVENUE CODE
§ 663
which is treated under subsection (b) as con-
sisting of any item of distributable net income
which is not included in the gross income of the
estate or trust.
(Aug. 16, 1954, ch. 736, 68A Stat. 220; Pub. L.
94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90
Stat. 1834; Pub. L. 97–248, title III, §§ 302(b)(2),
308(a), Sept. 3, 1982, 96 Stat. 586, 591; Pub. L.
98–67, title I, § 102(a), Aug. 5, 1983, 97 Stat. 369.)
Editorial Notes
AMENDMENTS
1983—Subsec. (a). Pub. L. 98–67 repealed amendments
made by Pub. L. 97–248. See 1982 Amendment note
below.
1982—Subsec. (a). Pub. L. 97–248 provided that, appli-
cable to payments of interest, dividends, and patronage
dividends paid or credited after June 30, 1983, subsec. (a)
is amended by inserting at end ‘‘For purposes of para-
graph (1), the amount of distributable net income shall
be computed without the deduction allowed by section
642(c).’’. Section 102(a), (b) of Pub. L. 98–67, title I, Aug.
5, 1983, 97 Stat. 369, repealed subtitle A (§§ 301–308) of
title III of Pub. L. 97–248 as of the close of June 30, 1983,
and provided that the Internal Revenue Code of 1954
(this title) shall be applied and administered (subject to
certain exceptions) as if such subtitle A (and the
amendments made by such subtitle A) had not been en-
acted.
1976—Subsec. (b). Pub. L. 94–455 struck out ‘‘or his
delegate’’ after ‘‘Secretary’’.
§ 662. Inclusion of amounts in gross income of
beneficiaries of estates and trusts accumu-
lating income or distributing corpus
(a) Inclusion
Subject to subsection (b), there shall be in-
cluded in the gross income of a beneficiary to
whom an amount specified in section 661(a) is
paid, credited, or required to be distributed (by
an estate o
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