[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: 26CFR1.661(b)-1]

[Page 104]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.661(b)-1  Character of amounts distributed; in general.

    In the absence of specific provisions in the governing instrument 
for the allocation of different classes of income, or unless local law 
requires such an allocation, the amount deductible for distributions to 
beneficiaries under section 661(a) is treated as consisting of the same 
proportion of each class of items entering into the computation of 
distributable net income as the total of each class bears to the total 
distributable net income. For example, if a trust has distributable net 
income of $20,000, consisting of $10,000 each of taxable interest and 
royalties and distributes $10,000 to beneficiary A, the deduction of 
$10,000 allowable under section 661(a) is deemed to consist of $5,000 
each of taxable interest and royalties, unless the trust instrument 
specifically provides for the distribution or accumulation of different 
classes of income or unless local law requires such an allocation. See 
also Sec. 1.661(c)-1.