Treasury Regulations · 26 CFR
§ 1.643(d)-2. Illustration of the provisions of section 643.
Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).
Regulation under 26 U.S.C. § 643(d)
Cite as 26 CFR § 1.643(d)-2
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Issued
- November 26, 1960 by T.D. 6500
- Last amended
- January 1, 1969 by T.D. 6989
- Issued under
- 26 U.S.C. § 643(d)
- Length
- 375 words · about 2 min to read
- Cross-references
- cites 2 Code sections and 1 regulation; cited by 1
(1) Under the terms of the trust instrument, the income of a trust is required to be currently distributed to W during her life. Capital gains are allocable to corpus and all expenses are charges against corpus. During the taxable year the trust has the following items of income and expenses:
| Dividends from domestic corporations | $30,000 | |
| Extraordinary dividends allocated to corpus by the trustee in good faith | 20,000 | |
| Taxable interest | 10,000 | |
| Tax-exempt interest | 10,000 | |
| Long-term capital gains | 10,000 | |
| Trustee's commissions and miscellaneous expenses allocable to corpus | 5,000 | |
(2) The “income” of the trust determined under section 643(b) which is currently distributable to W is $50,000, consisting of dividends of $30,000, taxable interest of $10,000, and tax-exempt interest of $10,000. The trustee's commissions and miscellaneous expenses allocable to tax-exempt interest amount to $1,000 (10,000/50,000 × $5,000).
(3) The “distributable net income” determined under section 643(a) amounts to $45,000, computed as follows:
| Dividends from domestic corporations | $30,000 | |
| Taxable interest | 10,000 | |
| Nontaxable interest | $10,000 | |
| Less: Expenses allocable thereto | 1,000 | |
| 9,000 | ||
| Total | 49,000 | |
| Less: Expenses ($5,000 less $1,000 allocable to tax-exempt interest) | 4,000 | |
| Distributable net income | 45,000 | |
In determining the distributable net income of $45,000, the taxable income of the trust is computed with the following modifications: No deductions are allowed for distributions to W and for personal exemption of the trust (section 643(a) (1) and (2)); capital gains allocable to corpus are excluded and the deduction allowable under section 1202 is not taken into account (section 643(a)(3)): the extraordinary dividends allocated to corpus by the trustee in good faith are excluded (sections 643(a)(4)); and the tax- exempt interest (as adjusted for expenses) and the dividend exclusion of $50 are included) section 643(a) (5) and (7)).
[T.D. 6500, 25 FR 11814, Nov. 26, 1960. Redesignated, T.D. 6989, 34 FR 732, Jan. 1, 1969]
Cross-references
Computed from the citations in the text of 26 CFR.
Code sections it cites
- § 643 Definitions applicable to subparts A, B, C, and D
- § 1202 Partial exclusion for gain from certain small business stock
Regulations it cites
Cited by 1 other regulation
Amendment history
From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.
- Amended by T.D. 6989 (34 FR 732)
- Issued by T.D. 6500 (25 FR 11814)
Where it sits in 26 CFR
- Subchapter A Income tax
- Part 1 Income taxes
- Estates, Trusts, and Beneficiaries
Nearby sections
- § 1.643(b)-1 Definition of income.
- § 1.643(b)-2 Dividends allocated to corpus.
- § 1.643(c)-1 Definition of “beneficiary”.
- § 1.643(d)-1 Definition of “foreign trust created by a United States person”.
- § 1.643(d)-2 Illustration of the provisions of section 643.
- § 1.643(f)-1 Treatment of multiple trusts.
- § 1.643(h)-1 Distributions by certain foreign trusts through intermediaries.