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TITLE 26-INTERNAL REVENUE CODE AMENDMENTS 1976-Subsec. (b). Pub. L. 94-455 struck out "or his delegate" following "Secretary". CRoss REFERENCES Computation of deduction for capital gains in case of estate or trust, see section 1202 of this title. Inclusion of amounts in gross income of beneficiaries of estates and trusts accumulating income or distribut- ing corpts, see section 662 of this title. SECTION REFERIED TO IN OTHER SECTIONS This section is referred to in sections 116, 642. 643, 1202 of this title. SUBPART C-ESTATES AND TRUSTS WHICH MAY ACCUMULATE INCOME OR WHICH DISTRIBUTE CORPUS See. 661. Deductions for estates and trusts accumulating income or distributing corpus. ' 662. Inclusion of amounts in gross income of benefi- ciaries of estates and trusts accumulating income or distributing corpus. 663. Special rules applicable to sections 661 and 662. 664. Charitable remainder trusts. AMENDMENTS 1969-Pub. L. 91-172, title II, § 201(e)(2), Dec. 30. 1969, 83 Stat. 564, added item 664. SUBPART REFERRED TO IN OTHER SECTIONS This subpart is referred to in section 671 of this title. § 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 (in- cluding 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 distri- butable 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 pro- portion 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 dif- ferent classes of income under the specific terms of the governing instrument. In the ap- plication of the preceding sentence, the items of deduction entering into the computation of distributable net income (including the deduc- tion allowed under section 642(c)) shall be allo- cated among the Items of distributable net income in accordance with regulations pre- scribed by the Secretary. 'So in original. Does not conform to section catch- line. (c) Limitation on deduction No deduction shall be allowed under subsec- tion (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 iticome of the estate or trust. (Aug. 16, 1954, ch. 736, 68A Stat. 220; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1906(b)(13)(A), 90 Stat. 1834.) AMENDMENTS 1976-Subsec. (b). Pub. L. 94-455 struck out "or his delegate" following "Secretary". CRoss REFERENCRS Deduction for trusts distributing current income only, see section 651 of this title. SECTION REFRED TO IN OTHER SECTIONS This section is referred to in sections 57, 642, 643, 662, 663, 665. 666, 677, 678, 6166, 6166A of this title. § 662. Inclusion of amounts in gross income of bene- ficiaries of estates and trusts accumulating income or distributing corpus (a) Inclusion Subject to subsection (b), there shall be in- cluded in the gross income of a beneficiary to whom an amount specified in section 661(a) is paid, credited, or required to be distributed (by an estate or trust described in section 661), the sum of the following amounts: (1) Amounts required to be distributed currently The amount of income for the taxable year required to be distributed currently to such beneficiary, whether distributed or not. If the amount of income required to be distributed currently to all beneficiaries exceeds the dis- tributable net income (computed without the deduction allowed by section 642(c), relating to deduction for charitable, etc., purposes) of the estate or trust, then, in lieu of the amount provided in the preceding sentence, there shall be included in the gross income of the beneficiary an amount which bears the same ratio to distributable net income (as so computed) as the amount of income required to be distributed currently to such beneficia- ry bears to the amount required to be distrib- uted currently to all beneficiaries. For pur- poses of this section, the phrase "the amount of income for the taxable year required to be distributed currently" includes any amount required to be paid out of income or corpus to the extent such amount is paid out of income for such taxable year. (2) Other amounts distributed All other amounts properly paid, credited, or required to be distributed to such benefi- ciary for the taxable year. If the sum of- (A) the amount of income for the taxable year required to be distributed currently to all beneficiaries, and (B) all other amounts properly paid, cred- ited, or required to be distributed to all beneficiaries exceeds the distributable net income of the estate or trust, then, in lieu of the amount Page 465 § 662