26 C.F.R. § 1.669(d)-1A   Total taxes deemed distributed.


Title 26 - Internal Revenue


Title 26: Internal Revenue
PART 1—INCOME TAXES
treatment of excess distributions of trusts applicable to taxable years beginning before january 1, 1969

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§ 1.669(d)-1A   Total taxes deemed distributed.

(a) If a capital gain distribution is deemed under §1.669(a)–1A to be distributed on the last day of a preceding taxable year and the amount is not less than the undistributed capital gain for such preceding taxable year, then an additional amount equal to the “taxes imposed on the trust attributable to the undistributed capital gain” (as defined in §1.665(d)–1A(c)) for such preceding taxable year is also deemed to have been properly distributed. For example, assume a trust has no distributable net income and has undistributed capital gain of $18,010 for the taxable year 1974. The taxes imposed on the trust attributable to the undistributed capital gain are $2,190. During the taxable year 1977, a capital gain distribution of $18,010 is made to the beneficiary which is deemed under §1.669(a)–1A to have been distributed on the last day of 1974. The 1977 capital gain distribution is not less than the 1974 undistributed capital gain. Accordingly, taxes of $2,190 imposed on the trust attributable to the undistributed capital gain for 1974 are also deemed to have been distributed on the last day of 1974. Thus, a total of $20,200 will be deemed to have been distributed on the last day of 1974.

(b) For the purpose of paragraph (a) of this section, the undistributed capital gain of any preceding taxable year and the taxes imposed on the trust for such preceding taxable year attributable to such undistributed capital gain are computed after taking into account any capital gain distributions of taxable years intervening between such preceding taxable year and the taxable year. See paragraph (c) of §1.669(a)–1A.

[T.D. 7204, 37 FR 17156, Aug. 25, 1972]

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