26 U.S.C. § 669 — Untitled legal text

Page 1844 TITLE 26—INTERNAL REVENUE CODE [§ 669 distributed net income, other than a taxable year during all of which the beneficiary re- ceiving the distribution was not a citizen or resident of the United States. (5) Determination of undistributed net income Notwithstanding section 666, for purposes of this subsection, an accumulation distribution from the trust shall be treated as reducing proportionately the undistributed net income for undistributed income years. (6) Periods before 1996 Interest for the portion of the period de- scribed in paragraph (2) which occurs before January 1, 1996, shall be determined— (A) by using an interest rate of 6 percent, and (B) without compounding until January 1, 1996. (b) Limitation The total amount of the interest charge shall not, when added to the total partial tax com- puted under section 667(b), exceed the amount of the accumulation distribution (other than the amount of tax deemed distributed by section 666(b) or (c)) in respect of which such partial tax was determined. (c) Interest charge not deductible The interest charge determined under this sec- tion shall not be allowed as a deduction for pur- poses of any tax imposed by this title. (Added Pub. L. 94–455, title X, § 1014(b), Oct. 4, 1976, 90 Stat. 1617; amended Pub. L. 101–508, title XI, § 11802(f)(3), Nov. 5, 1990, 104 Stat. 1388–530; Pub. L. 104–188, title I, § 1906(a), Aug. 20, 1996, 110 Stat. 1914.) Editorial Notes PRIOR PROVISIONS A prior section 668, acts Aug. 16, 1954, ch. 736, 68A Stat. 225; Oct. 16, 1962, Pub. L. 87–834, § 7(d), 76 Stat. 986; Dec. 30, 1969, Pub. L. 91–172, title III, § 331(a), 83 Stat. 594, related to treatment of amounts deemed distrib- uted in preceding years, prior to repeal by Pub. L. 94–455, title VII, § 701(a)(3), Oct. 4, 1976, 90 Stat. 1577. See section 667 of this title. AMENDMENTS 1996—Subsec. (a). Pub. L. 104–188 reenacted heading without change and amended text generally. Prior to amendment, text read as follows: ‘‘For purposes of the tax determined under section 667(a), the interest charge is an amount equal to 6 percent of the partial tax com- puted under section 667(b) multiplied by a fraction— ‘‘(1) the numerator of which is the sum of the num- ber of taxable years between each taxable year to which the distribution is allocated under section 666(a) and the taxable year of the distribution (count- ing in each case the taxable year to which the dis- tribution is allocated but not counting the taxable year of the distribution), and ‘‘(2) the denominator of which is the number of tax- able years to which the distribution is allocated under section 666(a).’’ 1990—Subsec. (c). Pub. L. 101–508 substituted heading for one which read ‘‘Special rules’’ and amended text generally, restating provisions of former par. (1) as en- tire subsection and striking out former par. (2) which provided that for purposes of this section, undistrib- uted net income existing in a trust as of January 1, 1977, would be treated as allocated under section 666(a) to the first taxable year beginning after December 31, 1976. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1996 AMENDMENT Pub. L. 104–188, title I, § 1906(d)(1), Aug. 20, 1996, 110 Stat. 1916, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall apply to distributions after the date of the enactment of this Act [Aug. 20, 1996].’’ EFFECTIVE DATE Pub. L. 94–455, title X, § 1014(d), Oct. 4, 1976, 90 Stat. 1617, provided that: ‘‘The amendments made by this section [enacting this section and amending section 667 of this title] shall apply to taxable years beginning after December 31, 1976.’’ SAVINGS PROVISION For provisions that nothing in amendment by Pub. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liabil- ity for tax for periods ending after Nov. 5, 1990, see sec- tion 11821(b) of Pub. L. 101–508, set out as a note under section 45K of this title. [§ 669. Repealed. Pub. L. 94–455, title VII, § 701(d)(1), Oct. 4, 1976, 90 Stat. 1578] Section, acts Oct. 16, 1962, Pub. L. 87–834, § 7(e), 76 Stat. 986; Dec. 30, 1969, Pub. L. 91–172, title III, § 331(a), 83 Stat. 596, related to the treatment of capital gain deemed distributed in preceding years. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF REPEAL Repeal applicable to distributions made in taxable years beginning after Dec. 31, 1975, see section 701(h) of Pub. L. 94–455, set out as an Effective Date of 1976 Amendment note under section 667 of this title. SUBPART E—GRANTORS AND OTHERS TREATED AS SUBSTANTIAL OWNERS Sec. 671. Trust income, deductions, and credits attrib- utable to grantors and others as substantial owners. 672. Definitions and rules. 673. Reversionary interests. 674. Power to control beneficial enjoyment. 675. Administrative powers. 676. Power to revoke. 677. Income for benefit of grantor. 678. Person other than grantor treated as substan- tial owner. 679. Foreign trusts having one or more United States beneficiaries. Editorial Notes AMENDMENTS 1976—Pub. L. 94–455, title X, § 1013(e)(1), Oct. 4, 1976, 90 Stat. 1616, added item 679. § 671. Trust income, deductions, and credits at- tributable to grantors and others as substan- tial owners Where it is specified in this subpart that the grantor or another person shall be treated as the owner of any portion of a trust, there shall then be included in computing the taxable income and credits of the grantor or the other person