[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: 26CFR1.669(f)-2A]

[Page 229]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.669(f)-2A  Exception for capital gain distributions from certain 
trusts.

    (a) General rule. If a capital gain distribution is paid, credited, 
or required to be distributed before January 1, 1973, from a trust that 
was in existence on December 31, 1969, section 669 shall not apply and 
no tax shall be imposed on such capital gain distribution under section 
668(a)(3). If capital gain distributions from more than one such trust 
are paid, credited, or required to be distributed to a beneficiary 
before January 1, 1973, the exception under the preceding sentence shall 
apply only to the capital gain distributions from one of the trusts. The 
beneficiary shall indicate on his income tax return for the taxable year 
in which the distribution would otherwise be included in income under 
section 668(a) the trust to which the exception provided by this section 
shall apply.
    (b) Special rule for section 2056(b)(5) trust. A capital gain 
distribution paid, credited, or required to be distributed by a trust 
that qualifies under section 2056(b)(5) of the Code (commonly known as a 
``marital deduction trust'') to a surviving spouse shall, in general, 
not be taxed under section 668(a)(3) since such a trust is required to 
distribute all of its income annually or more often. See section 
2056(b)(5) and the regulations thereunder.
    (c) Effect of exception. If this section applies to a capital gain 
distribution from a trust, such distribution shall reduce the 
undistributed capital gain of the trust. Since section 669 does not 
apply to such capital gain distribution, no amount of taxes paid by the 
trust attributable to such capital gain distribution are deemed 
distributed under section 669 (d) and (e).

[T.D. 7204, 37 FR 17157, Aug. 25, 1972]