Page:United States Statutes at Large Volume 96 Part 2.djvu/1027

 PUBLIC LAW 97-448—JAN. 12, 1983

96 STAT. 2389

"(A) is removed from the premises during the calendar year, and "(B) is allocated to such qualified beneficiary under paragraph (2). "(2) ALLOCATION OF PRODUCTION.—

"(A) IN GENERAL.—The qualified royalty production of a trust for any calendar year shall be allocated between the trust and its income beneficiaries as follows: "(i) there shall be sdlocated to the trust an amount of production based on the amount of any reserve for depletion for the calendar year with respect to qualified royalty production, and "(ii) production not allocated under clause (i) shall be allocated between the trust and the income beneficiaries in accordance with their respective shares of the adjusted distributable net income for the calendar year. "(B) DEFINITION AND SPECIAL RULE.—For purposes of this paragraph— "(i) ADJUSTED DISTRIBUTABLE NET INCOME.—The term 'adjusted distributable net income* means distributable net income (as defined in section 643) for the calendar year reduced by the excess (if any) of— "(I) any reserve for depletion for such year with respect to qualified royalty production, over "(II) the amount allowable as a deduction for depletion to the trust for such year with respect to qualified royalty production, "(ii) ALLOCATION PRO RATA FROM EACH UNIT OF PRO-

DUCTION.—Allocations under subparagraph (A) shall be treated as made pro rata from each unit of the qualified royalty production. "(3) PRODUCTION FROM TRANSFERRED PROPERTY.—

"(A) IN GENERAL.—The allocable trust production of any qualified beneficiary shall not include any production attributable to an interest in property which has been transferred after June 9, 1981, in a transfer which— "(i) is described in section 613A(c)(9)(A), and "(ii) is not described in section 613A(c)(9)(B). "(B) EXCEPTIONS.—Subparagraph (A) shall not apply in the case of any transfer so long as the transferor and the qualified beneficiary are required by subsection (b)(3) to share the amount determined under subsection (b)(2)(A). The preceding sentence shall apply to the transfer of any property only if the production attributable to the property was allocable trust production or qualified royalty production of the transferor. "(d) DEFINITIONS.—For purposes of this section— "(1) QUALIFIED BENEFICIARY.—The term 'qualified beneficiary' means any individual or estate which is a beneficiary of any trust which is a producer. "(2) QUALIFIED ROYALTY PRODUCTION.—The term 'qualified royalty production' means, with respect to any person, taxable crude oil (within the meaning of section 4991(a)) which is attributable to an economic interest of such person other than an operating mineral interest (within the meaning of section 614(d)). Such term does not include taxable crude oil attributa-

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