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TITLE 26-INTERNAL REVENUE CODE amounts shall be considered to be an amount paid or credited within the meaning of para- graph (2) of section 661(a) and shall be taxed to the holder of the power under section 662. (d) Effect of renunciation or disclaimer Subsection (a) shall not apply with respect to a power which has been renounced or dis- claimed within a reasonable time after the holder of the power first became aware of its existence. (Aug. 16, 1954, ch. 736, 68A Stat. 231; Oct. 4, 1976, Pub. L. 94-455, title X, § 1013(b), 90 Stat. 1615.) AMENDMENTS 1976-Subsec. (b). Pub. L. 94-455 substituted "if the grantor of the trust or a transferor (to whom section 679 applies) is otherwise treated as the owner under the provisions of this subpart other than this section" for "if the grantor of the trust is otherwise treated as the owner under sections 671 to 677, inclusive". EFFECTIVE DATE OF 1976 AMENDMENT For effective date of amendment of subsec. (b) by Pub. L. 94-455, see section 1013(f)(1) of Pub. L. 94-455, set out as an Effective Date note under section 679 of this title, § 679. Foreign trusts having one or more United States beneficiaries (a) Transferor treated as owner (1) In general A United States person who directly or indi- rectly transfers property to a foreign trust (other than a trust described in section 404(a)(4)) shall be treated as the owner for his taxable year of the portion of such trust attributable to such property if for such year there is a United States beneficiary of any portion of such trust. (2) Exceptions Paragraph (1) shall not apply- (A) Transfers by reason of death To any transfer by reason of the death of the transferor. (B) Transfers where gain is recognized to trans- feror To any sale or exchange of the property at its fair market value in a transaction in which all of the gain to the transferor is re- alized at the time of the transfer and is rec- ognized either at such time or is returned as provided in section 453. (b) Trusts acquiring United States beneficiaries If- (1) subsection (a) applies to a trust for the transferor's taxable year, and (2) subsection (a) would have applied to the trust for his immediately preceding taxable year but for the fact that for such receding taxable year there was no United States bene- ficiary for any portion of the trust, then, for purposes of this subtitle, the transfer- or shall be treated as having income for the taxable year (in addition to his other income for such year) equal to the undistributed net income (at the close of such immediately pre- ceding taxable year) attributable to the portion of the trust referred to in subsection (a). (c) Trusts treated as having a United States bene- ficiary (1) In general For purposes of this section, a trust shall be treated as having a United States beneficiary for the taxable year unless- (A) under the terms of the trust, no part of the income or corpus of the trust may be paid or accumulated during the taxable year to or for the benefit of a United States person, and (B) if the trust were terminated at any time during the taxable year, no part of the income or corpus of such trust could be paid to or for the benefit of a United States person. (2) Attribution of pwnership For purposes of paragraph (1), an amount shall be treated as paid or accumulated to or for the benefit of a United States person if such amount is paid to or accumulated for a foreign corporation, foreign partnership, or foreign trust or estate, and- (A) in the case of a foreign corporation, more than 50 percent of the total combined voting power of all classes of stock entitled to vote of such corporation is owned (within the meaning of section 958(a)) or is consid- ered to be owned (within the meaning of section 958(b)) by United States sharehold- ers (as defined in section 951(b)), (B) in the case of a foreign partnership, a United States person is a partner of such partnership, or (C) in the case of a foreign trust or estate, such trust or estate has a United States beneficiary (within the meaning of para- graph (1)). (Added Pub. L. 94-455, title X, § 1013(a), Oct. 4, 1976, 90 Stat. 1614.) EFFECTIVE DATE Section 1013(f)(1) of Pub. L. 94-455 provided that: "In General.-The amendments made by this section (other than subsection (c)) [enacting this section, amending sections 678(b), 6048(c), (d) and 6678(a) of this title, and repealing section 643(d) of this title] shall apply to taxable years ending after December 31, 1975, but only in the case of- "(A) foreign trusts created after May 21, 1974, and "(B) transfers of property to foreign trusts after May 21, 1974." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 678 of this title. SUBPART F-MISCELLANEOUS Sec. 681. Limitation on charitable deduction. 682. Income of an estate or trust in case of divorce, etc. ' 683. Use of trust as an exchange fund. AMENDMENTS 1976-Pub. L. 94-455, title XXI, § 2131(e)(2), Oct. 4, 1976, 90 Stat. 1924, substituted in item 683 "Use of trust as an exchange fund" for "Applicability of provi- sions". § 679 Page 477