Internal Revenue Code · 26 U.S.C.
§ 673. Reversionary interests
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. § 673
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Enacted
- December 30, 1969 by Pub. L. 91–172
- Last amended
- November 10, 1988 by Pub. L. 100–647
- Amendments
- 2 dated changes in the source credit
- Length
- 4 subsections · 306 words · about 1 min to read
- Cross-references
- cites 0; cited by 3 Code sections and 15 other regulations
- Regulations
- 4 issued under this section
The grantor shall be treated as the owner of any portion of a trust in which he has a reversionary interest in either the corpus or the income therefrom, if, as of the inception of that portion of the trust, the value of such interest exceeds 5 percent of the value of such portion.
Any postponement of the date specified for the reacquisition of possession or enjoyment of the reversionary interest shall be treated as a new transfer in trust commencing with the date on which the postponement is effective and terminating with the date prescribed by the postponement. However, income for any period shall not be included in the income of the grantor by reason of the preceding sentence if such income would not be so includible in the absence of such postponement.
(Aug. 16, 1954, ch. 736, 68A Stat. 227; Pub. L. 91–172, title II, § 201(c), Dec. 30, 1969, 83 Stat. 560; Pub. L. 99–514, title XIV, § 1402(a), Oct. 22, 1986, 100 Stat. 2711; Pub. L. 100–647, title I, § 1014(b), Nov. 10, 1988, 102 Stat. 3559.)
Regulations under this section
Treasury regulations (26 CFR) issued under § 673
- § 1.673(a)-1 Reversionary interests; income payable to beneficiaries other than certain charitable organizations; general rule.
- § 1.673(b)-1 Income payable to charitable beneficiaries before amendment by Tax Reform Act of 1969).
- § 1.673(c)-1 Reversionary interest after income beneficiary's death.
- § 1.673(d)-1 Postponement of date specified for reacquisition.
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
Cited by 3 Code sections
- § 674(b)(2) Power to control beneficial enjoyment
- § 676(b) Power to revoke
- § 677(a)(3) Income for benefit of grantor
Cited in 15 regulations not issued under it
- § 1.1(h)-1 Capital gains look-through rule for sales or exchanges of interests in a partnership, S corporation, or trust.
- § 1.170A-6 Charitable contributions in trust.
- § 1.671-1 Grantors and others treated as substantial owners; scope.
- § 1.671-2 Applicable principles.
- § 1.671-3 Attribution or inclusion of income, deductions, and credits against tax.
- § 1.672(f)-1 Foreign persons not treated as owners.
- § 1.672(f)-2 Certain foreign corporations.
- § 1.674(a)-1 Power to control beneficial enjoyment; scope of section 674.
- § 1.674(b)-1 Excepted powers exercisable by any person.
- § 1.677(a)-1 Income for benefit of grantor; general rule.
- § 1.679-0 Outline of major topics.
- § 1.679-1 U.S. transferor treated as owner of foreign trust.
- § 1.679-2 Trusts treated as having a U.S. beneficiary.
- § 1.1361-1 S corporation defined.
- § 1.9006-1 Interest and penalties in case of certain taxable years.
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 E Grantors and Others Treated as Substantial Owners
Nearby sections
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
1988—Subsecs. (c), (d). Pub. L. 100–647 added subsecs. (c) and (d).
1986—Pub. L. 99–514 amended section generally, substituting “the value of such interest exceeds 5 percent of the value of such portion” for “the interest will or may reasonably be expected to take effect in possession or enjoyment within 10 years commencing with the date of the transfer of that portion of the trust” in subsec. (a), adding subsec. (b), striking out subsec. (c) which provided that the grantor not be treated under subsec. (a) as the owner of any portion of a trust where his reversionary interest in such portion was not to take effect in possession or enjoyment until the death of the persons to whom the income therefrom was payable, and subsec. (d) which provided that any postponement of the date specified for the reacquisition of possession or enjoyment of the reversionary interest be treated as a new transfer in trust commencing with the date on which the postponement was effected and terminating with the date prescribed by the postponement.
1969—Subsec. (b). Pub. L. 91–172 struck out provisions relating to trusts where the income was payable to a charitable beneficiary for at least a two-year period.
Statutory Notes and Related Subsidiaries
Effective Date of 1988 Amendment
Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Effective Date of 1986 Amendment
Pub. L. 99–514, title XIV, § 1402(c), Oct. 22, 1986, 100 Stat. 2712, provided that:
“(1) In general.— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 674, 676, and 677 of this title] shall apply with respect to transfers in trust made after March 1, 1986.“(2) Transfers pursuant to property settlement agreement.— The amendments made by this section shall not apply to any transfer in trust made after March 1, 1986, pursuant to a binding property settlement agreement entered into on or before March 1, 1986, which required the taxpayer to establish a grantor trust and for the transfer of a specified sum of money or property to the trust by the taxpayer. This paragraph shall apply only to the extent of the amount required to be transferred under the agreement described in the preceding sentence.”
Effective Date of 1969 Amendment
Amendment by Pub. L. 91–172 applicable to transfers in trust made after April 22, 1969, see section 201(g)(3) of Pub. L. 91–172, set out as a note under section 170 of this title.