26 U.S.C. § 661 | Deduction for estates and trusts accumulating income or distributing corpus

(a)

Deduction

In any taxable year there shall be allowed as a deduction in computing the taxable income of an estate or trust (other than a trust to which subpart B applies), the sum of—

(1)

any amount of income for such taxable year required to be distributed currently (including any amount required to be distributed which may be paid out of income or corpus to the extent such amount is paid out of income for such taxable year); and

(2)

any other amounts properly paid or credited or required to be distributed for such taxable year;

but such deduction shall not exceed the distributable net income of the estate or trust.

(b)

Character of amounts distributed

The amount determined under subsection (a) shall be treated as consisting of the same proportion of each class of items entering into the computation of distributable net income of the estate or trust as the total of each class bears to the total distributable net income of the estate or trust in the absence of the allocation of different classes of income under the specific terms of the governing instrument. In the application of the preceding sentence, the items of deduction entering into the computation of distributable net income (including the deduction allowed under section 642(c)) shall be allocated among the items of distributable net income in accordance with regulations prescribed by the Secretary.

(c)

Limitation on deduction

No deduction shall be allowed under subsection (a) in respect of any portion of the amount allowed as a deduction under that subsection (without regard to this subsection) which is treated under subsection (b) as consisting 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, 197690 Stat. 1834 Pub. L. 97–248, title IIISept. 3, 198296 Stat. 586 Pub. L. 98–67, title I, § 102(a)Aug. 5, 198397 Stat. 369 (, ; , , ; , §§ 302(b)(2), 308(a), , , 591; , , .)

Editorial Notes

Amendments

Pub. L. 98–67 Pub. L. 97–2481983—Subsec. (a). repealed amendments made by . See 1982 Amendment note below.

Pub. L. 97–248June 30, 1983Pub. L. 98–67, title IAug. 5, 198397 Stat. 369 Pub. L. 97–248June 30, 19831982—Subsec. (a). provided that, applicable to payments of interest, dividends, and patronage dividends paid or credited after , subsec. (a) is amended by inserting at end “For purposes of paragraph (1), the amount of distributable net income shall be computed without the deduction allowed by section 642(c).”. Section 102(a), (b) of , , , repealed subtitle A (§§ 301–308) of title III of as of the close of , 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 enacted.

Pub. L. 94–4551976—Subsec. (b). struck out “or his delegate” after “Secretary”.