26 U.S.C. § 4947 — Application of taxes to certain nonexempt trusts
submitted 57 years ago by Pub. L. 91-172 to r/title-26-INTERNAL-REVENUE-CODE · 629 words · no verdicts yet
This section applies private-foundation rules and related tax rules to certain nonexempt charitable and split-interest trusts. It provides exceptions for specified beneficiaries, segregated amounts, earlier transfers, and certain trust structures.
(a) Application of tax. (1) Charitable trusts. For part II of subchapter F of chapter 1, except sections 508(a), (b), and (c), and for this chapter, a trust not exempt under section 501(a) is treated as a section 501(c)(3) organization if all unexpired interests are devoted to one or more section 170(c)(2)(B) purposes and a deduction was allowed under section 170, 545(b)(2), 642(c), 2055, 2106(a)(2), or 2522, or corresponding prior law. For section 509(a)(3)(A), it is treated as organized on the day it first becomes subject to this paragraph. (2) Split-interest trusts. A nonexempt trust whose unexpired interests are not all devoted to those purposes, and that has amounts for which one of those deductions was allowed, is treated as a private foundation* for section 507, applicable section 508(e), and sections 4941, 4943, 4944, and 4945, except as (b)(3) provides. This does not apply to (A) amounts payable to income beneficiaries unless a deduction was allowed under section 170(f)(2)(B), 2055(e)(2)(B), or 2522(c)(2)(B); (B) other amounts if segregated from amounts for which no deduction was allowed; or (C) amounts transferred before May 27, 1969. (3) Segregated amounts. For (2)(B), the trust must separately account for income, deductions, and other items properly attributable to each segregated amount. (b) Special rules. (1) The Secretary* must issue regulations needed to carry out this section. (2) If amounts are segregated under (a)(2)(B), net assets for section 507(c)(2) and (g) are limited to those segregated amounts. (3) Sections 4943 and 4944 do not apply to a trust described in (a)(2) if (A) all income interests, and no remainder interests, are devoted solely to section 170(c)(2)(B) purposes and deductible amounts are no more than 60% of all amounts’ aggregate fair-market value; or (B) deductions were allowed for amounts payable to every remainder beneficiary but not to any income beneficiary. (4) Section 507(a) does not apply to an (a)(2) trust because of distributing qualified employer securities to an employee* stock* ownership plan in a qualified gratuitous transfer.
For purposes of part II of subchapter F of chapter 1 (other than section 508(a), (b), and (c)) and for purposes of this chapter, a trust which is not exempt from taxation under section 501(a), all of the unexpired interests in which are devoted to one or more of the purposes described in section 170(c)(2)(B), and for which a deduction was allowed under section 170, 545(b)(2), 642(c), 2055, 2106(a)(2), or 2522 (or the corresponding provisions of prior law), shall be treated as an organization described in section 501(c)(3). For purposes of section 509(a)(3)(A), such a trust shall be treated as if organized on the day on which it first becomes subject to this paragraph.
In the case of a trust which is not exempt from tax under section 501(a), not all of the unexpired interests in which are devoted to one or more of the purposes described in section 170(c)(2)(B), and which has amounts in trust for which a deduction was allowed under section 170, 545(b)(2), 642(c), 2055, 2106(a)(2), or 2522, section 507 (relating to termination of private foundation* status), section 508(e) (relating to governing instruments) to the extent applicable to a trust described in this paragraph, section 4941 (relating to taxes on self-dealing), section 4943 (relating to taxes on excess business holdings) except as provided in subsection (b)(3), section 4944 (relating to investments which jeopardize charitable purpose) except as provided in subsection (b)(3), and section 4945 (relating to taxes on taxable expenditures) shall apply as if such trust were a private foundation. This paragraph shall not apply with respect to—
any amounts payable under the terms of such trust to income beneficiaries, unless a deduction was allowed under section 170(f)(2)(B), 2055(e)(2)(B), or 2522(c)(2)(B),
any amounts in trust other than amounts for which a deduction was allowed under section 170, 545(b)(2), 642(c), 2055, 2106(a)(2), or 2522, if such other amounts are segregated from amounts for which no deduction was allowable, or
any amounts transferred in trust before May 27, 1969.
For purposes of paragraph (2)(B), a trust with respect to which amounts are segregated shall separately account for the various income, deduction, and other items properly attributable to each of such segregated amounts.
The Secretary* shall prescribe such regulations as may be necessary to carry out the purposes of this section.
If any amounts in the trust are segregated within the meaning of subsection (a)(2)(B) of this section, the value of the net assets for purposes of subsections (c)(2) and (g) of section 507 shall be limited to such segregated amounts.
Sections 4943 and 4944 shall not apply to a trust which is described in subsection (a)(2) if—
all the income interest (and none of the remainder interest) of such trust is devoted solely to one or more of the purposes described in section 170(c)(2)(B), and all amounts in such trust for which a deduction was allowed under section 170, 545(b)(2), 642(c), 2055, 2106(a)(2), or 2522 have an aggregate value not more than 60 percent of the aggregate fair market value of all amounts in such trusts, or
a deduction was allowed under section 170, 545(b)(2), 642(c), 2055, 2106(a)(2), or 2522 for amounts payable under the terms of such trust to every remainder beneficiary but not to any income beneficiary.
The provisions of section 507(a) shall not apply to a trust which is described in subsection (a)(2) by reason of a distribution of qualified employer securities (as defined in section 664(g)(4)) to an employee* stock* ownership plan (as defined in section 4975(e)(7)) in a qualified gratuitous transfer (as defined by section 664(g)).
Source credit: (Added Pub. L. 91–172, title I, § 101(b), Dec. 30, 1969, 83 Stat. 517; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 105–34, title XV, § 1530(c)(9), Aug. 5, 1997, 111 Stat. 1079; Pub. L. 107–16, title V, § 542(e)(4), June 7, 2001, 115 Stat. 85; Pub. L. 108–357, title IV, § 413(c)(30), Oct. 22, 2004, 118 Stat. 1509; Pub. L. 111–312, title III, § 301(a), Dec. 17, 2010, 124 Stat. 3300.)
- 1969Enacted · Pub. L. 91-172 · 83 Stat. 517
- 1976Amended · Pub. L. 94-455 · 90 Stat. 1834
- 1997Amended · Pub. L. 105-34 · 111 Stat. 1079
- 2001Amended · Pub. L. 107-16 · 115 Stat. 85
- 2004Amended · Pub. L. 108-357 · 118 Stat. 1509
- 2010Amended · Pub. L. 111-312 · 124 Stat. 3300
A history note hasn’t been published yet. The record shows enactment by Pub. L. 91-172 on 1969-12-30.
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