Page:United States Statutes at Large Volume 102 Part 4.djvu/590

 102 STAT. 3560

PUBLIC LAW 100-647—NOV. 10, 1988 (1) If a beneficiary of a trust to which section 664 of the 1986 Code applies elects (at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe) to have this paragraph apply, such beneficiary shall be entitled to the benefits of section 1403(c)(2) of the Reform Act with respect to amounts included in gross income under section 664(b) of the 1986 Code in the same manner as if such amounts were included in gross income under section 652(a) of the 1986 Code. (2) Any trust beneficiary may elect (at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe) to waive the benefits of section 1403(c)(2) of the Reform Act. (3)(A) For purposes of determining the gross income of any pass-thru entity, such pass-thru entity shall not be allowed the benefits of section 806(e)(2)(C) (other than with respect to income from a common trust fund) or 1403(c)(2) of the Reform Act if such pass-thru entity is required to change its taxable year by reason of the amendments made by section 806 or 1403 of the Reform Act. (B) For purposes of subparagraph (A), the term "pass-thru entity" means any trust, partnership, S corporation, or common trust fund. (4) If any trust was required to change its taxable year by the amendments made by section 1403 of the Reform Act, such change shall be treated as initiated by such trust and approved by the Secretary of the Treasury or his delegate, (d) AMENDMENTS RELATED TO SECTION 1404 OF THE REFORM ACT.—

26 USC 6654.

(1) Subsection (a) of section 1404 of the Reform Act is amended— (A) by striking out "Subsection (k) of section 6654" and inserting in lieu thereof "Subsection (1) of section 6654, as amended by section 1841 of this Act", and (B) by striking out " '(k) TRUSTS" and inserting in lieu thereof "'(1) TRUSTS". (2) Subsection (1) of section 6654 of the 1986 Code is amended to read as follows: "(1) ESTATES AND TRUSTS.—

"(1) IN GENERAL.—Except as otherwise provided in this subsection, this subsection shall apply to any estate or trust. "(2)

EXCEPTION FOR ESTATES AND CERTAIN TRUSTS.—With

respect to any taxable year ending before the date 2 years after the date of the decedent's death, this section shall not apply to— "(A) the estate of such decedent, or "(B) any trust— "(i) all of which was treated (under subpart E of part I of subchapter J of chapter 1) as owned by the decedent, and "(ii) to which the residue of the decedent's estate will pass under his will. "(3) EXCEPTION FOR CHARITABLE TRUSTS AND PRIVATE FOUNDA-

TIONS.—This section shall not apply to any trust which is subject to the tax imposed by section 511 or which is a private foundation. "(4) SPECIAL RULE FOR ANNUAUZATIONS.—In the case of any estate or trust to which this section applies, subsection (d)(2)(B)(i) shall be applied by substituting 'ending before the

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