[Code of Federal Regulations]
[Title 26, Volume 8]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.642(a)(1)-1]

[Page 19]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.642(a)(1)-1  Partially tax-exempt interest.

    An estate or trust is allowed the credit against tax for partially 
tax-exempt interest provided by section 35 only to the extent that the 
credit does not relate to interest properly allocable to a beneficiary 
under section 652 or 662 and the regulations thereunder. A beneficiary 
of an estate or trust is allowed the credit against tax for partially 
tax-exempt interest provided by section 35 only to the extent that the 
credit relates to interest properly allocable to him under section 652 
or 662 and the regulations thereunder. If an estate or trust holds 
partially tax-exempt bonds and elects under section 171 to treat the 
premium on the bonds as amortizable, the credit allowable under section 
35, with respect to the bond interest (whether allowable to the estate 
or trust or to the beneficiary), is reduced under section 171(a)(3) by 
reducing the shares of the interest allocable, respectively, to the 
estate or trust and its beneficiary by the portion of the amortization 
deduction attributable to the shares.