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Final Section 643 Regulations Revise Definition of “Income” and Determine Its Impact on Taxation of Trusts and Estates  

Author:  Jeffrey Bryant.

Source: Volume 22, Number 04, Summer 2005 , pp.283-302(20)

Journal of Taxation of Investments

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The IRS has finalized regulations under Internal Revenue Code Section 643 concerning definitions of income for trust and estate purposes. These provisions have significant impact on a taxpayer’s ability to take advantage of various tax benefits available from trusts. Further, the new rules may affect who will be taxed on the income of a trust or estate. First, the new regulations amend the definition of trust accounting income in Reg. 1.643(b)-1. Second, they revise the definition of distributable net income (DNI) in Reg. 1.643(a)-3 by adding explanation and examples about the circumstances in which capital gains will be included in DNI. Other regulation provisions affected by these changes are also amended.


Affiliations:  1: Wichita State University.

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