[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.584-1]

[Page 311-312]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.584-1  Common trust funds.

    (a) Method of taxation. A common trust fund maintained by a bank is 
not subject to taxation under this chapter and is not considered a 
corporation. Its participants are taxed on their proportionate share of 
income from the common trust fund.
    (b) Conditions for qualification. (1) For a fund to be qualified as 
a common trust fund it must be maintained by a bank (as defined in 
section 581) in conformity with the rules and regulations of the 
Comptroller of the Currency, exclusively for the collective investment

[[Page 312]]

and reinvestment of contributions to the fund by the bank. The bank may 
either act alone or with one or more other fiduciaries, but it must act 
solely in its capacity as one or a combination of the following: (i) As 
a trustee of a trust created by will, deed, agreement, declaration of 
trust, or order of court; (ii) as an executor of a will or as an 
administrator of an estate; (iii) as a guardian (by whatever name known 
under local law) of the estate of an infant, of an incompentent 
individual, or of an absent individual; or (iv) on or after October 3, 
1976, as a custodian of a UniformGifts to Minors account. A Uniform 
Gifts to Minors account is an account established pursuant to a State 
law substantially similar to the Uniform Gifts to Minors Act. (See the 
Uniform Gifts to Minors Act of 1956 or the Uniform Gifts to Minors Act 
of 1966, as published by the National Conference of Commissioners on 
Uniform State Laws.) The Commissioner will publish a list of the States 
whose laws he determines to be substantially similar to such uniform 
acts. A bank that maintains a Uniform Gifts to Minors Act account must 
establish, to the satisfaction of the Commissioner or his delegate, that 
with respect to the account the bank has duties and responsibilities 
similar to the duties and responsibilities of a trustee or guardian.
    (2) A common trust fund may be a participant in another common trust 
fund.
    (c) Affiliated groups. For taxable years beginning after December 
31, 1975, two or more banks that are members of the same affiliated 
group (within the meaning of section 1504) are treated, for purposes of 
section 584, as one bank for the period of their affiliation. A common 
trust fund may be maintained by one or by more than one member of an 
affiliated group. Any member of the group may, but need not, contribute 
to the fund. Further, for purposes of this paragraph, members of an 
affiliated group may be, but need not be, co-trustees of the common 
trust fund.

[T.D. 6500, 25 FR 11737, Nov. 26, 1960, as amended by T.D. 7935, 49 FR 
1694, Jan. 13, 1984]