Internal Revenue Code · 26 U.S.C.
§ 668. Interest charge on accumulation distributions from foreign trusts
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 668
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- October 4, 1976 by Pub. L. 94–455
- Last amended
- August 20, 1996 by Pub. L. 104–188
- Amendments
- 2 dated changes in the source credit
- Length
- 3 subsections · 495 words · about 2 min to read
- Defines
- 1 term
- Cross-references
- cites 3; cited by 2 Code sections and 11 other regulations
- Regulations
- 13 issued under this section
The interest charge determined under this section with respect to any distribution is the amount of interest which would be determined on the partial tax computed under section 667(b) for the period described in paragraph (2) using the rates and the method under section 6621 applicable to underpayments of tax.
For purposes of paragraph (1), the period described in this paragraph is the period which begins on the date which is the applicable number of years before the date of the distribution and which ends on the date of the distribution.
For purposes of this subsection, the term “undistributed income year” means any prior taxable year of the trust for which there is undistributed net income, other than a taxable year during all of which the beneficiary receiving the distribution was not a citizen or resident of the United States.
Notwithstanding section 666, for purposes of this subsection, an accumulation distribution from the trust shall be treated as reducing proportionately the undistributed net income for undistributed income years.
The total amount of the interest charge shall not, when added to the total partial tax computed under section 667(b), exceed the amount of the accumulation distribution (other than the amount of tax deemed distributed by section 666(b) or (c)) in respect of which such partial tax was determined.
The interest charge determined under this section shall not be allowed as a deduction for purposes of any tax imposed by this title.
(Added Pub. L. 94–455, title X, § 1014(b), Oct. 4, 1976, 90 Stat. 1617; amended Pub. L. 101–508, title XI, § 11802(f)(3), Nov. 5, 1990, 104 Stat. 1388–530; Pub. L. 104–188, title I, § 1906(a), Aug. 20, 1996, 110 Stat. 1914.)
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
Regulations under this section
Treasury regulations (26 CFR) issued under § 668
- § 1.668(a)-1A Amounts treated as received in prior taxable years; inclusion in gross income.
- § 1.668(a)-2A Allocation among beneficiaries; in general.
- § 1.668(a)-3A Determination of tax.
- § 1.668(b)-1A Tax on distribution.
- § 1.668(b)-2A Special rules applicable to section 668.
- § 1.668(b)-3A Computation of the beneficiary's income and tax for a prior taxable year.
- § 1.668(b)-4A Information requirements with respect to beneficiary.
- § 1.668(a)-1 Amounts treated as received in prior taxable years; inclusion in gross income.
- § 1.668(a)-2 Allocation among beneficiaries; in general.
- § 1.668(a)-3 Excluded amounts.
- § 1.668(a)-4 Tax attributable to throwback.
- § 1.668(b)-1 Credit for taxes paid by the trust.
- § 1.668(b)-2 Illustration of the provisions of subpart D.
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 3 other sections
- § 667(a) Treatment of amounts deemed distributed by trust in preceding years
- § 6621 Determination of rate of interest
- § 666 Accumulation distribution allocated to preceding years
Cited by 2 Code sections
- § 667(a)(3) Treatment of amounts deemed distributed by trust in preceding years
- § 6048(c)(2)(B) Information with respect to certain foreign trusts
Cited in 11 regulations not issued under it
- § 1.643(h)-1 Distributions by certain foreign trusts through intermediaries.
- § 1.652(b)-1 Character of amounts.
- § 1.667-1 Denial of refund to trusts.
- § 1.667(b)-1A Authorization of credit to beneficiary for taxes imposed on the trust.
- § 1.669(a)-1 Limitation on tax.
- § 1.669(a)-2 Rules applicable to section 669 computations.
- § 1.669(a)-4 Tax attributable to short-cut throwback method.
- § 1.665(b)-1A Accumulation distributions.
- § 1.665(b)-2A Special rules for accumulation distributions made in taxable years beginning before January 1, 1974.
- § 1.672(f)-4 Recharacterization of purported gifts.
- § 1.679-2 Trusts treated as having a U.S. beneficiary.
Amendment history
From the source credit and the official notes, newest first.
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter J Estates, Trusts, Beneficiaries, and Decedents
- Part I ESTATES, TRUSTS, AND BENEFICIARIES
- Subpart D Treatment of Excess Distributions by Trusts
Nearby sections
- § 665 Definitions applicable to subpart D
- § 666 Accumulation distribution allocated to preceding years
- § 667 Treatment of amounts deemed distributed by trust in preceding years
- § 668 Interest charge on accumulation distributions from foreign trusts
- § 669 Repealed
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Prior Provisions
A prior section 668, acts Aug. 16, 1954, ch. 736, 68A Stat. 225; Oct. 16, 1962, Pub. L. 87–834, § 7(d), 76 Stat. 986; Dec. 30, 1969, Pub. L. 91–172, title III, § 331(a), 83 Stat. 594, related to treatment of amounts deemed distributed in preceding years, prior to repeal by Pub. L. 94–455, title VII, § 701(a)(3), Oct. 4, 1976, 90 Stat. 1577. See section 667 of this title.
Amendments
1996—Subsec. (a). Pub. L. 104–188 reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of the tax determined under section 667(a), the interest charge is an amount equal to 6 percent of the partial tax computed under section 667(b) multiplied by a fraction—
“(1) the numerator of which is the sum of the number of taxable years between each taxable year to which the distribution is allocated under section 666(a) and the taxable year of the distribution (counting in each case the taxable year to which the distribution is allocated but not counting the taxable year of the distribution), and
“(2) the denominator of which is the number of taxable years to which the distribution is allocated under section 666(a).”
1990—Subsec. (c). Pub. L. 101–508 substituted heading for one which read “Special rules” and amended text generally, restating provisions of former par. (1) as entire subsection and striking out former par. (2) which provided that for purposes of this section, undistributed net income existing in a trust as of January 1, 1977, would be treated as allocated under section 666(a) to the first taxable year beginning after December 31, 1976.
Statutory Notes and Related Subsidiaries
Effective Date of 1996 Amendment
Pub. L. 104–188, title I, § 1906(d)(1), Aug. 20, 1996, 110 Stat. 1916, provided that: “The amendment made by subsection (a) [amending this section] shall apply to distributions after the date of the enactment of this Act [Aug. 20, 1996].”
Effective Date
Pub. L. 94–455, title X, § 1014(d), Oct. 4, 1976, 90 Stat. 1617, provided that: “The amendments made by this section [enacting this section and amending section 667 of this title] shall apply to taxable years beginning after December 31, 1976.”
Savings Provision
For provisions that nothing in amendment by Pub. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101–508, set out as a note under section 45K of this title.