[Code of Federal Regulations]
[Title 26, Volume 5]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.402(c)-1]

[Page 388]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.402(c)-1  Taxability of beneficiary of certain foreign situs trusts.

    Section 402(c) has the effect of treating, for purposes of section 
402, the distributions from a trust which at the time of the 
distribution is located outside the United States in the same manner as 
distributions from a trust which is located in the United States. If the 
trust would qualify for exemption from tax under section 501(a) except 
for the fact that it fails to comply with the provisions of paragraph 
(a)(3)(i) of Sec. 1.401-1, which restricts qualification to trusts 
created or organized in the United States and maintained here, section 
402(a) and Sec. 1.402(a)-1 are applicable to the distributions from 
such a trust. Thus, for example, a total distribution from such a trust 
is entitled to the long-term capital gains treatment of section 
402(a)(2), except in the case of a nonresident alien individual (see 
section 871 and 1441 and the regulations thereunder). However, if the 
plan fails to meet any requirement of section 401 and the regulations 
thereunder in addition to paragraph (a)(3)(i) of Sec. 1.401-1, section 
402(b) and Sec. 1.402(b)-1 are applicable to the distributions from 
such a trust.

[T.D. 6500, 25 FR 11679, Nov. 26, 1960]