Page 469

TITLE 26-INTERNAL REVENUE CODE scribed by the Secretary, be treated as a trust to which subpart C applies. (Aug. 16, 1954, ch. 736, 68A Stat. 223; Oct. 16, 1962, Pub. L. 87-834, § 7(b), 76 Stat. 985; Dec. 30, 1969, Pub. L. 91-172, title III, § 331(a), 83 Stat. 592; Dec. 10, 1971, Pub. L. 92-178, title III, § 306(a), 85 Stat. 524; Oct. 4, 1976, Pub. L. 94- 455, title VII, §§ 701(b), (c), (d)(2), (3), title XIX, § 1906(b)(13)(A), 90 Stat. 1577, 1578, 1834.) REFERENCES IN TEXT Section 669, referred to in subsec. (d), was repealed by Pub. L. 94-455, title VII, § 701(d)(1), Oct. 4, 1976, 90 Stat. 1578. AMENDMENTS 1976-Subsec. (b). Pub. L. 94-455, § 701(b), (c), added provisions that for purposes of sec. 667 the amounts specified in par. (2) of sec. 661(a) not include amounts paid, credited, or required to be distributed to a bene- ficiary from a trust as income accumulated before the birth of such beneficiary or before such beneficiary reaches 21, and that if the amounts paid, credited, or required to be distributed by the trust for the taxable year do not exceed the income of the trust for such year, there be no accumulation distribution for such year. Subsec. (d). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (e). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary" in provi- sions following subsec. (e)(2). Subsec. (e)(1). Pub. L. 94-455, § 701(d)(2), struck out provision that preceding taxable year does not include any taxable year of the trust which begins before Jan. 1, 1969, in the case of a capital gain distribution made during a taxable year beginning after Dec. 31, 1968. Subsecs. (f), (g). Pub. L. 94-455, § 701(d)(3), struck out subsec. Cf) which related to undistributed capital gains and subsec. (g) which related to capital gain dis tribution. 1971--Subsec. (g). Pub. L. 92-178 struck out "for such taxable year" following "undistributed capital gain" in the introductory text. 1969-Subsec. (a). Pub. L. 91-172 inserted "attribut- able to such distributable net income" following "on the trust" in par. (2). Subsec. (b). Pub. L. 91-172 substituted "Accumula- tion distribution" for "Accumulation distributions of trusts other than certain foreign trusts" as subsec. heading, combined existing provisions of subsecs. (b) and (c) defining "accumulation distribution" in the case of a trust (other than a foreign trust created by a United States person) and of a foreign trust created by a United States person, respectively, in provisions now designated as pars. (1) and (2), deleting "the amount (if in excess of $2,000)" preceding "by which" in the introductory text and inserting "(but not below zero)" in par. (2), and deleted the second sentence providing that for purposes of this subsection, the amount speci- fied in par. (2) of section 661(a) shall be determined without regard to section 666 and excepting from "ac- cumulation distributions": accumulations before birth or attainment of age 21; distributions for emergency needs; distributions, where beneficiary attained speci- fied age or ages and there were not more than 4 distri- butions, at intervals of 4 or more years; and final dis- tribution of trust was made more than 9 years after date of last transfer to the trust. Subsee. c). Pub. L. 91-172 substituted "Special rule applicable to distributions by certain foreign trusts" for "Accumulation distribution of certain foreign trusts" as subsec. heading, inserted introductory phrase "For purposes of this subpart", reenacted pro- visions of former third sentence as the subsection, de- leted the first sentence which defined in the case of a foreign trust created by a United States person the term "accumulation distribution", now covered by subsec. (b) of this section, and deleted the second sen- tence which stated that "For purposes of this subsec- tion, the amount specified in paragraph (2) of section 661(a) shall be determined without regard to section 66B." Subsec. d). Pub. L. 91-172 substituted "taxable year of the trust" for "taxable year on the trust", "alloca. ble to the undistributed portions of distributable net income and gains to excess of losses from sales or ex- changes of capital assets" for "allocable to the undis- tributed portion of the distributable net income", and "reduced by any amount of such taxes deemed distrib- uted under section 666(b) and c) or 669(d) and Ce) to any beneficiary" for "reduced by any amount of such taxes allowed, under sections 667 and 668, as a credit to any beneficiary on account of any accumulation dis- tribution determined for any taxable year". Subsec. e). Pub. L. 91-172 substituted provisions of the first sentence contained in pars. 1(A) to (C) and (2) for prior first sentence which read "For purposes of this subpart, the term 'preceding taxable year' does not include any taxable year of the trust to which this part does not apply" and reenacted the provisions of the second sentence. Subsecs. (f), (g). Pub. L. 91-172 added subsecs. f) and (g). 1962-Subsec. (b). Pub. L. 87-834, § 7(b)(1), substitut- ed "Accumulation distributions of trusts other than certain foreign trusts" for "Accumulation distribu- tion" in the subsection catchline, and inserted "in the case of a trust (other than a foreign trust created by a United States person)," following "purposes of this subpart,". Subsec. (c). Pub. L. 87-834, §7(b)(2), added subsec. (c) and redesignated former subsec. Cc) as Cd). Subsecs. (d), Ce). Pub. L. 87-834, § 7(b)(2), redesignat- ed former subsecs. (c) and (d) as Cd) and (e), respec- tively. EFFECTIVE DATE OF 1976 AMENDMENT Amendment of subsecs. (b), (e)(1), f), (g) by section 701(b), (c), (d)(2), (3), of Pub. L. 94-455 applicable to distributions made in taxable years beginning after Dec. 31, 1975, see section 701(h), set out as an Effec- tive Date of 1976 Amendment note under section 667 of this title. EFFECTIVE DATE OF 1971 AMENDmENT Section 306(a) of Pub. L. 92-178 provided in part that amendment of subsec. (g) of this section by Pub. L. 92-178 shall be effective with respect to taxable years beginning after Dec. 31, 1968. EFFECTIVE DATE OF 1969 AMENDMENT Section 331(d) of Pub. L. 91-172, as amended by Pub. L. 92-178, title III, § 306(b), Dec. 10, 1971, 85 Stat. 524, provided that: "Cl) General Rule.-Except as otherwise provided in this subsection, the amendments made by this section [to sections 663(b)(2), 665 to 669, and 6401(b) of this title] shall apply to taxable years beginning after De- cember 31, 1968. "(2) Exceptions.- "(A) Amounts paid, credited, or required to be dis- tributed by a trust (other than a foreign trust cre- ated by a United States person) on or before the last day of a taxable year of the trust beginning before January 1, 1974, shall not be deemed to be accumula- tion distributions to the extent that such amounts were accumulated by a trust in taxable years of such trust beginning before January 1, 1969, and would have been excepted from the definition of an accu- mulation distribution by reason of paragraph (1), (2), (3), or (4) of section 665(b) of the Internal Rev- enue Code of 1954, as in effect on December 31, 1968 [subsec. (b)(1), (2). (3), or (4) of this section], if they had been distributed on the last day of the last tax- able year of the trust beginning before January 1, 1969. "(B) For taxable years of a trust beginning before January 1, 1970, the first sentence of section 666(a) of the Internal Revenue Code of 1954 (as amended 71-999 0 - 78 - 32 (Vol. 7) Page 469 § 665