[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: 26CFR1.662(c)-2]

[Page 110]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.662(c)-2  Death of individual beneficiary.

    If an amount specified in section 662(a) (1) or (2) is paid, 
credited, or required to be distributed by an estate or trust for a 
taxable year which does not end with or within the last taxable year of 
a beneficiary (because of the beneficiary's death), the extent to which 
the amount is included in the gross income of the beneficiary for his 
last taxable year or in the gross income of his estate is determined by 
the computations under section 662 for the taxable year of the estate or 
trust in which his last taxable year ends. Thus, the distributable net 
income and the amounts paid, credited, or required to be distributed for 
the taxable year of the estate or trust, determine the extent to which 
the amounts paid, credited, or required to be distributed to the 
beneficiary are included in his gross income for his last taxable year 
or in the gross income of his estate. (Section 662(c) does not apply to 
such amounts.) The gross income for the last taxable year of a 
beneficiary on the cash basis includes only income actually distributed 
to the beneficiary before his death. Income required to be distributed, 
but in fact distributed to his estate, is included in the gross income 
of the estate as income in respect of a decedent under section 691. See 
paragraph (e) of Sec. 1.663(c)-3 with respect to separate share 
treatment for the periods before and after the death of a trust's 
beneficiary.