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TITLE 26-INTERNAL REVENUE CODE § 681. Limitation on charitable deduction (a) Trade or business income In computing the deduction allowable under section 642(c) to a trust, no amount otherwise allowable under section 642(c) as a deduction shall be allowed as a deduction with respect to income of the taxable year which is allocable to its unrelated business income for such year. For purposes of the preceding sentence, the term "unrelated business income" means an amount equal to the amount which, if such trust were exempt from tax under section 501(a) by reason of section 501(c)(3), would be computed as its unrelated business taxable income under sec- tion 512 (relating to income derived from cer- tain business activities and from certain proper- ty acquired with borrowed funds). (b) Cross reference For disallowance of certain charitable, etc., deductions otherwise allowable under section 642(c), see sections 508(d) and 4948(c)(4). (Aug. 16, 1954, ch. 736, 68A Stat. 232; Oct. 22, 1968, Pub. L. 90-630, § 6(b), 82 Stat. 1330; Dec. 30, 1969, Pub. L. 91-172, title I, §§ 101(j)(18), (19), 121(d)(2)(B), 83 Stat. 528, 547.) AmENDMNTS 1969-Subsec. (a). Pub. L. 91-172, § 121(d)(2)(B), sub. stituted reference to certain property acquired with borrowed funds for reference to certain leases. Subsec. (b). Pub. L. 91-172, § 1010)(18), (19), redesig- nated former subsec. (d) as subsec. (b), and, in subsec. (b), as so redesignated, substituted "sections 518(d) and 4948(c)(4)" for section 503(e). Former subsec. (b) dealing generally with the operation of trusts, was stricken. Subsec. (c). Pub. L. 91-172, § 101(j)(18), struck out former subsec. (c) dealing with accumulated income. Subsec. (d). Pub. L. 91-172, § 101(j)(19) redesignated former subsec. (d) as subsec. (b). 1968-Subsec. (c). Pub. L. 90-630 added provision that par. (1) does not apply to income attributable to property transferred to a trust before January 1, 1951, by the creator thereof if the trust was irrevocable on such date and if the income is required to be accumu. lated pursuant to the mandatory terms of the instru- ment creating the trust. EmrEcTivE DATE or 1969 AmENDMENT Amendment of subsec. (a) by section 121(d)(2)(B) of Pub. L. 91-172 applicable to taxable years beginning after Dec. 31, 1969, see section 121(g) of Pub. L. 91- 172, set out as an Effective Date of 1969 Amendment note under section 511 of this title. Amendment -of subsecs. (b) to d) by section 101(j) (18), (19) of Pub. L. 91-172 to take effect on Jan. 1, 1970, see section 101(k)(1) of Pub. L. 91-172, set out as an Effective Date note under section 4940 of this title. ErFEcrrvE DATE OF 1968 AMENDMENT Section 6(c) of Pub. L. 90-630 provided that: "The amendments made by subsection (a) [amending sec- tion 504(a) of this title] and (b) [amending subsec. (c) of this section] shall apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954. For purposes of sections 3814 and 162(g)(4) of the Internal Revenue Code of 1939, provisions having the same effect as such amendments shall be treated as included in such sections effective with respect to taxable years beginning after Decem- ber 31, 1950." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 513, 642, 663 of this title. § 682. Income of an estate or trust in case of divorce, etc. (a) Inclusion in gross income of wife There shall be included in the gross income of a wife who is divorced or legally separated under a decree of divorce or of separate mainte- nance (or who is separated from her husband under a written separation agreement) the amount of the income of any trust which such wife is entitled to receive and which, except for this section, would be includible in the gross income of her husband, and such amount shall not, despite any other provision of this subtitle, be includible in the gross income of such hus- band. This subsection shall not apply to that part of any such income of the trust which the terms of the decree, written separation agree- ment, or trust instrument fix, in terms of an amount of money or a portion of such income, as a sum which is payable for the support of minor children of such husband. In case such income is less than the amount specified in the decree, agreement, or instrument, for the pur- pose of applying the preceding sentence, such income, to the extent of such sum payable for such support, shall be considered a payment for such support. (b) Wife considered a beneficiary For purposes of computing the taxable income of the estate or trust and the taxable income of a wife to whom subsection (a) or sec- tion 71 applies, such wife shall be considered as the beneficiary specified in this part. A periodic payment under section 71 to any portion of which this part applies shall be included in the gross income of the beneficiary in the taxable year in which under this part such portion is required to be included. (c) Cross reference For definitions of "husband" and "wife," as used in this section, see section 7701(a)(17). (Aug. 16, 1954, ch. 736, 68A Stat. 234.) CROSS REFEREcNCs Deductions for payments under this section not al- lowed, see section 215 of this title. Definition of husband and wife, see section 7701 of this title. Payment under this section not treated as payment for support of defendant, see section 152 of this title. Wife taxable on alimony and separate maintenance payments received, see section 71 of this title. SECTION REnanzD TO IN OTHE SrCroNs This section is referred to in sections 71, 72, 101, 152, 215, 7701 of this title. § 683. Use of trust as an exchange fund (a) General rule Except as provided in subsection (b), if prop- erty is transferred to a trust in exchange for an interest in other trust property and if the trust would be an investment company (within the meaning of section 351) if it were a corporation, then gain shall be recognized to the transferor. (b) Exception for pooled income funds Subsection (a) shall not apply to any transfer to a pooled income fund (within the meaning of section 642(c)(5)). Page 478