Page:United States Statutes at Large Volume 90 Part 2.djvu/418

 90 STAT. 1886 26 USC 2001 2501, '

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PUBLIC LAW 94-455—OCT. 4, 1976 " (B) any transfer to the extent such transfer is subject ^o ^ ^^^ imposed by chapter 11 or 12. " (6) $250,000 LIMIT ON EXCLUSION OF TRANSFERS TO GRANDCHILDREN,—In the case of any deemed transferor, the maximum amount exchided from the terms 'taxable distribution' and 'taxable termination' by reason of provisions exempting from such terms transfers to the grandchildren of the g r a n to r of the trust shall be $250,000, The preceding sentence shall be applied to transfers from one or more trusts in the order in which such transfers are made or deemed made. " (7) COORDINATION W I T H SUBSECTION (a). — " (A) TERMINATIONS TAKE PRECEDENCE OVER DISTRIBUTIONS.—If—

" (i) the death of an individual or any other occurrence is a taxable termination with respect to any property, and " ( i i) such occurrence also requires the distribution of part or all of such property i n a distribution which would (but for this subparagraph) be a taxable distribution, then a taxable distribution shall be deemed not to have occurred with respect to the portion described in clause (i). "(B)

CERTAIN PRIOR TRANSFERS.—To the extent that —

" (i) the deemed transferor i n any p r i o r transfer of the property of the trust being transferred in this transfer was assigned to the same generation as ( o r a lower generation than) the generation assignment of the deemed transferor in this transfer, " ( i i) the transferee i n such prior transfer was assigned to the same generation as (or a higher generation than) the generation assignment of the transferee i n this transfer, and " ( i i i) such transfers do not have the effect of avoiding tax under this chapter with respect to any transfer, the terms 'taxable termination' and 'taxable aistribution' do not include this later transfer. " (c) YOUNGER GENERATION B E N E F I C I A R Y; B E N E F I C I A R Y. — For pur-

poses of this chapter— "(1)

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generation beneficiary' means any beneficiary who is assigned to a generation younger than the grantor's generation. "(2)

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YOUNGER GENERATION BENEFICIARY.—The term 'younger

T I M E FOR ASCERTAINING YOUNGER GENERATION BENEFI-

CIARIES.—A person is a younger generation beneficiary of a trust with respect to any transfer only if such person was a younger generation beneficiary of the trust immediately before the transfer (or, in the case of a series of related transfers, only if such person was a younger generation beneficiary of the trust immediately before the first of such transfers). " (3) BENEFICIARY.—The term 'beneficiary' means any person who has a present o r future interest or power in the trust, " (d) INTEREST OR P O W E R. — For purposes of this chapter— " (1) INTEREST.—A person has an interest in a trust if such person— " (A) has a r i g h t to receive income or corpus from the trust, or " (B) is a permissible recipient of such income or corpus. " (2) POWER.—The term 'power' means any power to establish or alter beneficial enjoyment of the corpus o r income of the trust.

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