Definition of Income for Trust Purposes

• Author: Seymour Goldberg
• Profession: Senior partner in the law firm of Goldberg & Goldberg, PC in Woodbury, New York
• Pages: 99-99

Selected portions of the preamble to the Internal Revenue Service (IRS)

nal regulations are provided next.

(1)

On December 30, 2003, the IRS issued nal regulations revis-

ing the denition of income under Section 643(b) of the Internal

Revenue Code.

(2)

According to the IRS, these regulations are necessary to reect

changes in the denition of trust accounting income under the

state laws.

(3)

The regulations also clarify situations that involve capital gains and

the relationship of capital gains and distributable net income under

643(a)(3) of the Internal Revenue Code.

(4) Amendments are made to the regulations affecting ordinary trusts,

pooled income funds, charitable remainder trusts, trusts that qual-

ify for the gift and estate tax marital deduction, and trusts that are

exempt from the generation-skipping transfer taxes.

(5) The regulations affect the grantors, beneciaries and duciaries of

trusts.

(6)

Generally, the nal regulations are applicable to trusts and estates

for taxable years ending after January 2, 2004.

(7)

Taxpayers may rely on the provisions of the nal regulations for any

taxable years in which a trust or estate is governed by a state statute

authorizing a unitrust payment in satisfaction of the income inter-

est of the income beneciaries or granting the trustee a power to

adjust between income and principal in each case as described in

the nal regulations.

99

DEFINITION OF INCOME

FOR TRUST PURPOSES

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