[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: 26CFR1.652(a)-2]

[Page 99]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.652(a)-2  Distributions in excess of distributable net income.

    If the amount of income required to be distributed currently to 
beneficiaries exceeds the distributable net income of the trust (as 
defined in section 643(a)), each beneficiary includes in his gross 
income an amount equivalent to his proportionate share of such 
distributable net income. Thus, if beneficiary A is to receive two-
thirds of the trust income and B is to receive one-third, and the income 
required to be distributed currently is $99,000, A will receive $66,000 
and B, $33,000. However, if the distributable net income, as determined 
under section 643(a) is only $90,000, A will include two-thirds 
($60,000) of that sum in his gross income, and B will include one-third 
($30,000) in his gross income. See Sec. Sec. 1.652(b)-1 and 1.652(b)-2, 
however, for amounts which are not includible in the gross income of a 
beneficiary because of their tax-exempt character.