Page:United States Statutes at Large Volume 92 Part 3.djvu/304

 92 STAT. 2936

26 USC 2613.

PUBLIC LAW 95-600—NOV. 6, 1978 trust or the income therefrom to a beneficiary or a class of beneficiaries designated in the trust instrument. "(B) RELATED OR SUBORDINATE TRUSTEE DEFINED.—For purposes of subparagraph (A), the term 'related or subordinate trustee' means any trustee who is assigned to a younger generation than the grantor's generation and who is— "(i) the spouse of the grantor or of any beneficiary, "(ii) the father, mother, lineal descendant, brother, or sister of the grantor or of any beneficiary, "(iii) an employee of a corporation in which the stockholdings of the grantor, the trust, and the beneficiaries of the trust are significant from the viewpoint of voting control, "(iv) an employee of a corporation in which the grantor or any beneficiary of the trust is an executive, "(v) a partner of a partnership in which the interest of the grantor, the trust, and the beneficiaries of the trust are significant from the viewpoint of operating control or distributive share of partnership income, "(vi) an employee of a corporation in which the grantor or any beneficiary of the trust is an executive, or "(vii) an employee of a partnership in which the grantor or any beneficiary of the trust is a partner.". (3) CLARIFICATION OF SECTION 2613(b)(2)(B).—Subparagraph (B) of section 2613(b)(2) (defining taxable termination for purposes of the tax on generation-skipping transfer) is amended— (A) by striking out "an interest and a power" and inserting in lieu thereof a present interest and a present power", and (B) by striking out "interest or power" and inserting in lieu thereof "present interest or present power". (4) ALTERNATE VALUATION IN CERTAIN CASES WHERE THERE IS A TAXABLE TERMINATION AT DEATH OF OLDER GENERATION BENEFICIARY

26 USC 2602.

26 USC 2613

note. 26 USC 2601 et "eq-

(A) IN GENERAL.—Subparagraph (A) of section 2602(d)(1) (relating to alternate valuation) is amended by inserting "(or at the same time as the death of a beneficiary of the trust assigned to a higher generation than such deemed transferor)" after "such deemed transferor". (B) SPECIAL RULES.—Subparagraph (A) of section 2602(d)(2) (relating to special rules for alternate valuation) is amended by inserting "(or beneficiary)" after "the deemed transferor". (5) EFFECTIVE DATE.—

(A) Except as provided in subparagraph (B), the amendments made by this subsection shall take effect as if included in chapter 13 of the Internal Revenue Code of 1954 as added by section 2006 of the Tax Reform Act of 1976. (B) The amendment made by paragraph (1) shall take effect on October 4, 1976. (o) ADJUSTMENT IN INCOME TAX ON ACCUMULATION DISTRIBUTIONS FOR PORTION OF ESTATE AND GENERATION-SKIPPING TRANSFER TAXES.—

26 USC 667.

(1) IN GENERAL.—Subsection (b) of section 667 (relating to tax on accumulation distribution) is amended by adding at the end thereof the following new paragraph: "(6) ADJUSTMENT IN PARTIAL TAX FOR ESTATE AND GENERATIONSKIPPING TRANSFER TAXES ATTRIBUTABLE TO PARTIAL TAX.—

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