Treasury Regulations (26 C.F.R.)
26 CFR § 1.665(c)-1A
Special rule applicable to distributions by certain foreign trusts.
# (a) In general.
Except as provided in paragraph (b) of this section, for purposes of section 665 any amount paid to a U.S. person which is from a payor who is not a U.S. person and which is derived directly or indirectly from a foreign trust created by a U.S. person shall be deemed in the year of payment to the U.S. person to have been directly paid to the U.S. person by the trust. For example, if a nonresident alien receives a distribution from a foreign trust created by a U.S. person and then pays the amount of the distribution over to a U.S. person, the payment of such amount to the U.S. person represents an accumulation distribution to the U.S. person from the trust to the extent that the amount received would have been an accumulation distribution had the trust paid the amount directly to the U.S. person in the year in which the payment was received by the U.S. person. This section also applies in a case where a nonresident alien receives indirectly an accumulation distribution from a foreign trust created by a U.S. person and then pays it over to a U.S. person. An example of such a transaction is one where the foreign trust created by a U.S. person makes the distribution to an intervening foreign trust created by either a U.S. person or a person other than a U.S. person and the intervening trust distributes the amount received to a nonresident alien who in turn pays it over to a U.S. person. Under these circumstances, it is deemed that the payment received by the U.S. person was received directly from a foreign trust created by a U.S. person.
# (b) Limitation.
In the case of a distribution to a beneficiary who is a U.S. person, paragraph (a) of this section does not apply if the distribution is received by such beneficiary under circumstances indicating lack of intent on the part of the parties to circumvent the purposes for which section 7 of the Revenue Act of 1962 (76 Stat. 985) was enacted.
[T.D. 7204, 37 FR 17139 Aug. 25, 1972]
Source: view the official text
In this part (40 sections)
- 1.668(b)-2A · Special rules applicable to section 668.
- 1.668(b)-3A · Computation of the beneficiary's income and tax for a…
- 1.668(b)-4A · Information requirements with respect to beneficiary.
- 1.668(a)-1 · Amounts treated as received in prior taxable years;…
- 1.668(a)-2 · Allocation among beneficiaries; in general.
- 1.668(a)-3 · Excluded amounts.
- 1.668(a)-4 · Tax attributable to throwback.
- 1.668(b)-1 · Credit for taxes paid by the trust.
- 1.668(b)-2 · Illustration of the provisions of subpart D.
- 1.669(a)-1 · Limitation on tax.
- 1.669(a)-2 · Rules applicable to section 669 computations.
- 1.669(a)-3 · Tax computed by the exact throwback method.
- 1.669(a)-4 · Tax attributable to short-cut throwback method.
- 1.669(b)-1 · Information requirements.
- 1.669(b)-2 · Manner of exercising election.
- 1.664-4A · Valuation of charitable remainder interests for which the…
- 1.665(a)-0A · Excess distributions by trusts; scope of subpart D.
- 1.665(a)-1A · Undistributed net income.
- 1.665(b)-1A · Accumulation distributions.
- 1.665(b)-2A · Special rules for accumulation distributions made in…
- 1.665(c)-1A · Special rule applicable to distributions by certain…
- 1.665(d)-1A · Taxes imposed on the trust.
- 1.665(e)-1A · Preceding taxable year.
- 1.665(f)-1A · [Reserved]
- 1.665(g)-1A · [Reserved]
- 1.665(g)-2A · Application of separate share rule.
- 1.671-1 · Grantors and others treated as substantial owners; scope.
- 1.671-2 · Applicable principles.
- 1.671-3 · Attribution or inclusion of income, deductions, and credits…
- 1.671-4 · Method of reporting.
- 1.671-5 · Reporting for widely held fixed investment trusts.
- 1.672(a)-1 · Definition of adverse party.
- 1.672(b)-1 · Nonadverse party.
- 1.672(c)-1 · Related or subordinate party.
- 1.672(d)-1 · Power subject to condition precedent.
- 1.672(f)-1 · Foreign persons not treated as owners.
- 1.672(f)-2 · Certain foreign corporations.
- 1.672(f)-3 · Exceptions to general rule.
- 1.672(f)-4 · Recharacterization of purported gifts.
- 1.672(f)-5 · Special rules.