[Code of Federal Regulations]
[Title 26, Volume 17]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR53.4947-2]

[Page 204-205]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 53_FOUNDATION AND SIMILAR EXCISE TAXES--Table of Contents
 
            Subpart H_Application to Certain Nonexempt Trusts
 
Sec. 53.4947-2  Special rules.

    (a) Limit to segregated amounts. If any amounts held in trust are 
segregated within the meaning of Sec. 53.4947-1(c)(3), the value of the 
net assets for purposes of section 507(c)(2) and (g) shall be limited to 
the segregated amounts with respect to which a deduction under section 
170, 545(b)(2), 556(b)(2), 642(c), 2055,

[[Page 205]]

2106(a)(2), or 2522 was allowed. See the regulations under section 
507(c)(2) and (g).
    (b) Applicability of section 4943 and 4944 to split-interests 
trusts--(1) General rule. Under section 4947(b)(3), section 4943 and 
4944 do not apply to a split-interest trust described in section 
4947(a)(2) if:
    (i) All the income interest (and none of the remainder interest) of 
the trust is devoted solely to one or more of the purposes described in 
section 170(c)(2)(B) and all amounts in the trust for which a deduction 
was allowed under section 170, 545(b)(2), 556(b)(2), 642(c), 2055, 
2106(a)(2), or 2522 have an aggregate value (at the time for which the 
deduction was allowed) of not more than 60 percent of the aggregate fair 
market value of all amounts in the trust (after the payment of estate 
taxes and all other liabilities), or
    (ii) A deduction was allowed under section 170, 545(b)(2), 
556(b)(2), 642(c), 2055, 2106(a)(2) or 2522 for amounts payable under 
the terms of the trust to every remainder beneficiary, but not to any 
income beneficiary.

This (1) shall apply to a trust described in paragraph (b)(1)(ii) of 
this section only if all amounts payable under the terms of the trust to 
every remainder beneficiary are to be devoted solely to one or more of 
the purposes described in section 170(c)(2)(B). After the expiration of 
all income interests in a trust described in paragraph (b)(1)(ii) of 
this section, the trust shall become subject to section 4947(a)(1) under 
Sec. 53.4947-1(b)(2), and section 4947(b)(3) shall no longer apply to 
the trust. A pooled income fund described in section 642(c)(5) will 
generally meet the requirements of paragraph (b)(1)(ii) of this section, 
as will a charitable remainder trust described in section 664(d)(1), if 
in either case it does not make payments to any income beneficiary 
described in section 170(c).
    (2) Definitions. (i) For purposes of section 4947(b)(3)(A), the term 
``income interest'' shall include an interest in property transferred in 
trust which is in the form of a guaranteed annuity interest or unitrust 
interest as described in Sec. 1.170A-6(c), Sec. 20.2055-2(e)(2) or 
Sec. 25.2522(c)-3(c)(2) and the term ``remainder interest'' shall 
include an interest which succeeds an ``income interest'' within the 
meaning of this (i).
    (ii) For purposes of section 4947(b)(3)(B), the term ``income 
beneficiary'' shall include a recipient of payments described in section 
642(c)(5)(F) from a pooled income fund, payments described in section 
664(d)(1)(A) from a charitable remainder annuity trust, or payments 
described in section 664(d)(2)(A) or (3) from a charitable remainder 
unitrust. The term ``remainder beneficiary'' shall include a beneficiary 
of a remainder interest described in section 642(c)(5) or 664(d)(1)(C) 
or (2)(C).
    (c) Effective date. Except as otherwise provided in Sec. Sec. 
53.4947-1 and 53.4947-2 and the regulations under sections 508 (d) and 
(e), Sec. Sec. 53.4947-1 and 53.4947-2 shall take effect on January 1, 
1970.

(Secs. 4947 and 7805, Internal Revenue Code of 1954 (68A Stat. 917: 26 
U.S.C. 7805))

[T.D. 7431, 41 FR 35515, Aug. 23, 1976]