[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: 26CFR1.651(a)-3]

[Page 97-98]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.651(a)-3  Distribution of amounts other than income.

    (a) A trust does not qualify for treatment under section 651 for any 
taxable year in which it actually distributes corpus. For example, a 
trust which is required to distribute all of its income currently would 
not qualify as a simple trust under section 651 in the year of its 
termination since in that year actual distributions of corpus would be 
made.
    (b) A trust, otherwise qualifying under section 651, which may make 
a

[[Page 98]]

distribution of corpus in the discretion of the trustee, or which is 
required under the terms of its governing instrument to make a 
distribution of corpus upon the happening of a specified event, will be 
disqualified for treatment under section 651 only for the taxable year 
in which an actual distribution of corpus is made. For example: Under 
the terms of a trust, which is required to distribute all of its income 
currently, half of the corpus is to be distributed to beneficiary A when 
he becomes 30 years of age. The trust reports on the calendar year 
basis. On December 28, 1954, A becomes 30 years of age and the trustee 
distributes half of the corpus of the trust to him on January 3, 1955. 
The trust will be disqualified for treatment under section 651 only for 
the taxable year 1955, the year in which an actual distribution of 
corpus is made.
    (c) See section 661 and the regulations thereunder for the treatment 
of trusts which distribute corpus or claim the charitable contributions 
deduction provided by section 642(c).