Treasury Regulations (26 C.F.R.)
26 CFR § 1.668(a)-2A
Allocation among beneficiaries; in general.
The portion of the total amount includible in income under § 1.668(a)-1A which is includible in the income of a particular beneficiary is based upon the ratio determined under the second sentence of section 662(a)(2) for the taxable year (and not for the preceding taxable year). This section may be illustrated by the following example:
Example.
(a) Under the terms of a trust instrument, the trustee may accumulate the income or make distributions to A and B. The trustee may also invade corpus for the benefit of A and B. The distributable net income of the trust for taxable year 1975 is $10,000. The trust had undistributed net income for taxable year 1973, the first year of the trust, of $5,000, to which a tax of $1,100 was allocable. On May 1, 1975, the trustee distributes $10,000 to A, and on November 29, 1975, he distributes $5,000 to B. Thus, of the total distribution of $15,000, A received two-thirds and B receives one-third.
(b) For the purposes of determining the amounts includible in the beneficiaries' gross income for 1975, the trust is deemed to have made the following distributions:
| Amount distributed out of 1975 income (distributable net income) | $10,000 |
| Accumulation distribution deemed distributed by the trust on the last day of 1973 under section 666(a) | 5,000 |
| Taxes imposed on the trust attributable to the undistributed net income deemed distributed under section 666(b) | 1,100 |
(c) A will include in his income for 1975 two-thirds of each item shown in paragraph (b) of this example. Thus, he will include in gross income $6,666.67 (10,000/15,000 × $10,000) of the 1975 distributable net income of the trust as provided in section 662(a)(2) (which is not an amount includable in his income under § 1.668(a)-1A(a)). He will include in his income $3,333.33 (10,000/15,000 × $5,000) of the accumulation distribution and $733.33 (10,000/15,000 × $1,100) of the taxes imposed on the trust, as provided in section 668(a).
(d) B will include in his income for 1975 one-third of each item shown in paragraph (b) of this example, computed in the manner shown in paragraph (c) of this example.
(e) To the extent the total accumulation distribution consists of undistributed net income and undistributed capital gain, A and B shall be treated as receiving a pro rata share of each for the preceding taxable year 1973.
[T.D. 7204, 37 FR 17148, Aug. 25, 1972]
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In this part (40 sections)
- 1.665(b)-2 · Exclusions from accumulation distributions in the case of…
- 1.665(b)-3 · Exclusions under section 663(a)(1).
- 1.665(c)-1 · Accumulation distributions of certain foreign trusts; in…
- 1.665(c)-2 · Indirect payments to the beneficiary.
- 1.665(d)-1 · Taxes imposed on the trust.
- 1.665(e)-1 · Preceding taxable year.
- 1.665(e)-2 · Application of separate share rule.
- 1.666(a)-1A · Amount allocated.
- 1.666(b)-1A · Total taxes deemed distributed.
- 1.666(c)-1A · Pro rata portion of taxes deemed distributed.
- 1.666(c)-2A · Illustration of the provisions of section 666 (a), (b),…
- 1.666(d)-1A · Information required from trusts.
- 1.666(a)-1 · Amount allocated.
- 1.666(b)-1 · Total taxes deemed distributed.
- 1.666(c)-1 · Pro rata portion of taxes deemed distributed.
- 1.666(c)-2 · Illustration of the provisions of section 666.
- 1.667-1 · Denial of refund to trusts.
- 1.667(a)-1A · [Reserved]
- 1.667(b)-1A · Authorization of credit to beneficiary for taxes imposed…
- 1.668(a)-1A · Amounts treated as received in prior taxable years;…
- 1.668(a)-2A · Allocation among beneficiaries; in general.
- 1.668(a)-3A · Determination of tax.
- 1.668(b)-1A · Tax on distribution.
- 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.