Page:United States Statutes at Large Volume 90 Part 2.djvu/416

 90 STAT. 1884 26 USC 2613.

PUBLIC LAW 94-455—OCT. 4, 1976 "SEC. 2613. OTHER DEFINITIONS. "(a)

TAXABLE D I S T R I B U T I O N. — For purposes of t h i s chapter—

" (1) IN GENERAL.—The term 'taxable distribution' means any distribution which is not out of the income of the t r u s t (within the meaning of section 6 4 3 (b)) from a generation-skipping trust to any younger generation beneficiary who is assigned to a generation younger than the generation assignment of any other person who is a younger generation beneficiary. For purposes of the preceding sentence, an individual who a t no time has h a d any t h i n g other than a future interest or future power (or both) in the trust shall not be considered as a younger generation beneficiary. " (2) SOURCE OF DISTRIBUTION.—If, during the tax a b l e year of

the trust, there are distributions out of the income of the t r u s t (within the meaning of section 6 4 3 (b)) and out of other amounts, for purposes of paragraph (1) the distributions of such income shall be deemed to have been made to the beneficiaries (to the extent of the aggregate distributions made to each such beneficiary during such year) in descending order of generations, beginning with the beneficiaries assigned to the oldest generation. " (3) P A Y M E N To r TAX.—If any p o r t i o n of the tax imposed by

this chapter with respect to any transfer is paid out of the income or corpus of the trust, an amount equal to the portion so paid shall be deemed to be a generation-skipping transfer. "(4)

CERTAIN DISTRIBUTIONS EXCLUDED FROM TAX.—The term

'taxable distribution' does not include— " (A) any transfer to the extent such transfer is to a grandchild of the grantor of the trust and does not exceed the limitation provided by subsection (b)(6), and "(13) any transfer to the extent such transfer is subject to tax imposed by chapter 11 or 12. " (b) TAXABLE TERMINATION. — For purposes of t h i s chapter —

" (1) IN GENERAL.—The term 'taxable termination' means the termination (by death, lapse of time, exercise or nonexercise, or otherwise) of the interest or power in a generation-skipping t r u s t of any younger generation beneficiary who is assigned to any generation older than the generation assignment of any other person who is a younger generation beneficiary of that trust. Such term does not include a termination of the interest or power of any person who at no time has h a d anything other than a future interest or future power (or both) in the trust. " (2) T I M E CERTAIN TERMINATIONS DEEMED TO OCCUR.— " (A) W H E R E 2 OR MORE BENEFICIARIES ARE ASSIGNED TO

SAME GENERATION.—In any case where 2 or more younger generation beneficiaries of a trust are assigned to the same generation, except to the extent provided in regulations prescribed by the Secretary, the transfer constituting the termination with respect to each such beneficiary shall be treated as occurring at the time when the last such termination occurs. "(B)

S A M E BENEFICIARY HAS MORE THAN i INTEREST OR

POWER.—In any case where a younger generation beneficiary of a t r u s t has both an interest and a power, or more than 1 interest or power, in the trust, except to the extent provided in regulations prescribed by the Secretary, the termination with respect to each such interest or power shall be treated as occurring at the time when the last such termination occurs. " (C) U N U S U A L ORDER OF TERMINATION.— " (i) IN GENERAL.—If—

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