Internal Revenue Code · 26 U.S.C.
§ 681. Limitation on charitable deduction
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. § 681
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Enacted
- October 22, 1968 by Pub. L. 90–630
- Last amended
- December 30, 1969 by Pub. L. 91–172
- Amendments
- 1 dated changes in the source credit
- Length
- 2 subsections · 179 words · about 1 min to read
- Defines
- 1 term
- Cross-references
- cites 5; cited by 3 Code sections and 9 other regulations
- Regulations
- 3 issued under this section
In computing the deduction allowable under section 642(c) to a trust, no amount otherwise allowable under section 642(c) as a deduction shall be allowed as a deduction with respect to income of the taxable year which is allocable to its unrelated business income for such year. For purposes of the preceding sentence, the term “unrelated business income” means an amount equal to the amount which, if such trust were exempt from tax under section 501(a) by reason of section 501(c)(3), would be computed as its unrelated business taxable income under section 512 (relating to income derived from certain business activities and from certain property acquired with borrowed funds).
For disallowance of certain charitable, etc., deductions otherwise allowable under section 642(c), see sections 508(d) and 4948(c)(4).
(Aug. 16, 1954, ch. 736, 68A Stat. 232; Pub. L. 90–630, § 6(b), Oct. 22, 1968, 82 Stat. 1330; Pub. L. 91–172, title I, §§ 101(j)(18), (19), 121(d)(2)(B), Dec. 30, 1969, 83 Stat. 528, 547.)
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 § 681
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 5 other sections
- § 642(c) Special rules for credits and deductions
- § 501(a) Exemption from tax on corporations, certain trusts, etc.
- § 512 Unrelated business taxable income
- § 508(d) Special rules with respect to section 501(c)(3) organizations
- § 4948(c)(4) Application of taxes and denial of exemption with respect to certain foreign organizations
Cited by 3 Code sections
- § 513(b)(1) Unrelated trade or business
- § 642(c)(4) Special rules for credits and deductions
- § 663(a)(2) Special rules applicable to sections 661 and 662
Cited in 9 regulations not issued under it
- § 1.513-1 Definition of unrelated trade or business.
- § 1.542-3 Stock ownership requirement.
- § 1.641(c)-1 Electing small business trust.
- § 1.642(c)-3 Adjustments and other special rules for determining unlimited charitable contributions deduction.
- § 1.663(a)-2 Charitable, etc., distributions.
- § 20.2055-4 Disallowance of charitable, etc., deductions because of “prohibited transactions” in the case of decedents dying before January 1, 1970.
- § 25.2522(a)-1 Charitable and similar gifts; citizens or residents.
- § 25.2522(c)-1 Disallowance of charitable, etc., deductions because of “prohibited transactions” in the case of gifts made before January 1, 1970.
- § 53.4942(a)-2 Computation of undistributed income.
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 F Miscellaneous
Nearby sections
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
1969—Subsec. (a). Pub. L. 91–172, § 121(d)(2)(B), substituted reference to certain property acquired with borrowed funds for reference to certain leases.
Subsec. (b). Pub. L. 91–172, § 101(j)(18), (19), redesignated subsec. (d) as (b) and substituted “sections 518(d) and 4948(c)(4)” for “section 503(e)”. Former subsec. (b), dealing generally with the operation of trusts, was struck out.
Subsec. (c). Pub. L. 91–172, § 101(j)(18), struck out subsec. (c) dealing with accumulated income.
Subsec. (d). Pub. L. 91–172, § 101(j)(19), redesignated subsec. (d) as (b).
1968—Subsec. (c). Pub. L. 90–630 inserted provision that par. (1) does not apply to income attributable to property transferred to a trust before January 1, 1951, by the creator thereof if the trust was irrevocable on such date and if the income is required to be accumulated pursuant to the mandatory terms of the instrument creating the trust.
Statutory Notes and Related Subsidiaries
Effective Date of 1969 Amendment
Amendment by section 101(j)(18), (19) of Pub. L. 91–172 effective Jan. 1, 1970, see section 101(k)(1) of Pub. L. 91–172, set out as an Effective Date note under section 4940 of this title.
Amendment by section 121(d)(2)(B) of Pub. L. 91–172 applicable to taxable years beginning after Dec. 31, 1969, see section 121(g) of Pub. L. 91–172, set out as a note under section 511 of this title.
Effective Date of 1968 Amendment
Pub. L. 90–630, § 6(c), Oct. 22, 1968, 82 Stat. 1330, provided that: “The amendments made by subsection (a) [amending section 504 of this title] and (b) [amending this section] shall apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954. For purposes of sections 3814 and 162(g)(4) of the Internal Revenue Code of 1939, provisions having the same effect as such amendments shall be treated as included in such sections effective with respect to taxable years beginning after December 31, 1950.”