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Abstract: 

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.

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Affiliations:  1: Wichita State University.