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26 U.S.C. § 678 — Person other than grantor treated as substantial owner
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** A person other than the grantor shall be treated as the owner of any portion of a trust with respect to which:
(1) such person has a power exercisable solely by himself to vest the corpus or the income therefrom in himself, or
(2) such person has previously partially released or otherwise modified such a power and after the release or modification retains such control as would, within the principles of sections 671 to 677, inclusive, subject a grantor of a trust to treatment as the owner thereof.
**(b) Exception where grantor is taxable** Subsection (a) shall not apply with respect to a power over income, as originally granted or thereafter modified, if the grantor of the trust or a transferor (to whom section 679 applies) is otherwise treated as the owner under the provisions of this subpart other than this section.
**(c) Obligations of support** Subsection (a) shall not apply to a power which enables such person, in the capacity of trustee or cotrustee, merely to apply the income of the trust to the support or maintenance of a person whom the holder of the power is obligated to support or maintain except to the extent that such income is so applied. In cases where the amounts so applied or distributed are paid out of corpus or out of other than income of the taxable year, such amounts shall be considered to be an amount paid or credited within the meaning of paragraph (2) of section 661(a) and shall be taxed to the holder of the power under section 662.
**(d) Effect of renunciation or disclaimer** Subsection (a) shall not apply with respect to a power which has been renounced or disclaimed within a reasonable time after the holder of the power first became aware of its existence.
**(e) Cross reference** For provision under which beneficiary
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Stable record: federal_law:legal_authorities:record_usc_b48814c19313a45266b6d649
Source file: Laws/federal/codes/united-states-code/title-26/section-678-person-other-than-grantor-treated-as-substantial-owner--84eaa143e6.md
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Source location: Title 26, Chapter 1, § 678; chapter-001-normal-taxes-and-surtaxes.md
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**(a) General rule** A person other than the grantor shall be treated as the owner of any portion of a trust with respect to which:
(1) such person has a power exercisable solely by himself to vest the corpus or the income therefrom in himself, or
(2) such person has previously partially released or otherwise modified such a power and after the release or modification retains such control as would, within the principles of sections 671 to 677, inclusive, subject a grantor of a trust to treatment as the owner thereof.
**(b) Exception where grantor is taxable** Subsection (a) shall not apply with respect to a power over income, as originally granted or thereafter modified, if the grantor of the trust or a transferor (to whom section 679 applies) is otherwise treated as the owner under the provisions of this subpart other than this section.
**(c) Obligations of support** Subsection (a) shall not apply to a power which enables such person, in the capacity of trustee or cotrustee, merely to apply the income of the trust to the support or maintenance of a person whom the holder of the power is obligated to support or maintain except to the extent that such income is so applied. In cases where the amounts so applied or distributed are paid out of corpus or out of other than income of the taxable year, such amounts shall be considered to be an amount paid or credited within the meaning of paragraph (2) of section 661(a) and shall be taxed to the holder of the power under section 662.
**(d) Effect of renunciation or disclaimer** Subsection (a) shall not apply with respect to a power which has been renounced or disclaimed within a reasonable time after the holder of the power first became aware of its existence.
**(e) Cross reference** For provision under which beneficiary of trust is treated as owner of the portion of the trust which consists of stock in an S corporation, see section 1361(d).
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Transferor treated as owner**
(1) **In general** — A United States person who directly or indirectly transfers property to a foreign trust (other than a trust described in section 6048(a)(3)(B)(ii)) shall be treated as the owner for his taxable year of the portion of such trust attributable to such property if for such year there is a United States beneficiary of any portion of such trust.
(2) **Exceptions** — Paragraph (1) shall not apply—
(A) *Transfers by reason of death* — To any transfer by reason of the death of the transferor.
(B) *Transfers at fair market value* — To any transfer of property to a trust in exchange for consideration of at least the fair market value of the transferred property. For purposes of the preceding sentence, consideration other than cash shall be taken into account at its fair market value.
(3) **Certain obligations not taken into account under fair market value exception**
(A) *In general* — In determining whether paragraph (2)(B) applies to any transfer by a person described in clause (ii) or (iii) of subparagraph (C), there shall not be taken into account—
(i) except as provided in regulations, any obligation of a person described in subparagraph (C), and
(ii) to the extent provided in regulations, any obligation which is guaranteed by a person described in subparagraph (C).
(B) *Treatment of principal payments on obligation* — Principal payments by the trust on any obligation referred to in subparagraph (A) shall be taken into account on and after the date of the payment in determining the portion of the trust attributable to the property transferred.
(C) *Persons described* — The persons described in this subparagraph are—
(i) the trust,
(ii) any grantor, owner, or beneficiary of the trust
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 679
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Married individuals filing joint returns and surviving spouses** There is hereby imposed on the taxable income of—
(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and
(2) every surviving spouse (as defined in section 2(a)),
a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $36,90015% of taxable income. Over $36,900 but not over $89,150$5,535, plus 28% of the excess over $36,900. Over $89,150 but not over $140,000$20,165, plus 31% of the excess over $89,150. Over $140,000 but not over $250,000$35,928.50, plus 36% of the excess over $140,000. Over $250,000$75,528.50, plus 39.6% of the excess over $250,000.
**(b) Heads of households** There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $29,60015% of taxable income. Over $29,600 but not over $76,400$4,440, plus 28% of the excess over $29,600. Over $76,400 but not over $127,500$17,544, plus 31% of the excess over $76,400. Over $127,500 but not over $250,000$33,385, plus 36% of the excess over $127,500. Over $250,000$77,485, plus 39.6% of the excess over $250,000.
**(c) Unmarried individuals (other than surviving spouses and heads of households)** There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $22,10015% of taxable income. Over $22,100 but not over $53,50
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1
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Federal law — U.S. Code and appendices · legal_authorities
Page 1851
TITLE 26—INTERNAL REVENUE CODE
§ 679
1969—Subsec. (a)(1) to (3). Pub. L. 91–172, § 332(a)(1), in-
serted ‘‘or the grantor’s spouse’’ after ‘‘the grantor’’ in
pars. (1), (2), and (3).
Subsec. (b). Pub. L. 91–172, § 332(a)(2), inserted ‘‘(other
than the grantor’s spouse)’’ after ‘‘beneficiary’’.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99–514 applicable with respect
to transfers in trust made after Mar. 1, 1986, except for
transfers pursuant to a certain binding property settle-
ment agreement, see section 1402(c) of Pub. L. 99–514,
set out as a note under section 673 of this title.
EFFECTIVE DATE OF 1969 AMENDMENT
Pub. L. 91–172, title III, § 332(b), Dec. 30, 1969, 83 Stat.
599, provided that: ‘‘The amendments made by sub-
section (a) [amending this section] shall apply in re-
spect of property transferred in trust after October 9,
1969.’’
§ 678. Person other than grantor treated as sub-
stantial owner
(a) General rule
A person other than the grantor shall be treat-
ed as the owner of any portion of a trust with re-
spect to which:
(1) such person has a power exercisable sole-
ly by himself to vest the corpus or the income
therefrom in himself, or
(2) such person has previously partially re-
leased or otherwise modified such a power and
after the release or modification retains such
control as would, within the principles of sec-
tions 671 to 677, inclusive, subject a grantor of
a trust to treatment as the owner thereof.
(b) Exception where grantor is taxable
Subsection (a) shall not apply with respect to
a power over income, as originally granted or
thereafter modified, if the grantor of the trust
or a transferor (to whom section 679 applies) is
otherwise treated as the owner under
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 678
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.