Internal Revenue Code · 26 U.S.C.

§ 684. Recognition of gain on certain transfers to certain foreign trusts and estates

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

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. § 684

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status: In force
Added: August 5, 1997 by Pub. L. 105–34
Last amended: December 17, 2010 by Pub. L. 111–312
Amendments: 2 dated changes in the source credit
Length: 3 subsections · 217 words · about 1 min to read
Cross-references: cites 1; cited by 1 Code section and 2 other regulations
Regulations: 5 issued under this section

¶(a) In general Except as provided in regulations, in the case of any transfer of property by a United States person to a foreign estate or trust, for purposes of this subtitle, such transfer shall be treated as a sale or exchange for an amount equal to the fair market value of the property transferred, and the transferor shall recognize as gain the excess of—

¶(1) the fair market value of the property so transferred, over

¶(2) the adjusted basis (for purposes of determining gain) of such property in the hands of the transferor.

¶(b) Exception

Subsection (a) shall not apply to a transfer to a trust by a United States person to the extent that any person is treated as the owner of such trust under section 671.

¶(c) Treatment of trusts which become foreign trusts

If a trust which is not a foreign trust becomes a foreign trust, such trust shall be treated for purposes of this section as having transferred, immediately before becoming a foreign trust, all of its assets to a foreign trust.

(Added Pub. L. 105–34, title XI, § 1131(b), Aug. 5, 1997, 111 Stat. 978; amended Pub. L. 107–16, title V, § 542(e)(1)(A)–(C), June 7, 2001, 115 Stat. 84, 85; Pub. L. 111–312, title III, § 301(a), Dec. 17, 2010, 124 Stat. 3300.)

Regulations under this section

Treasury regulations (26 CFR) issued under § 684

Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 1 other section

§ 671 Trust income, deductions, and credits attributable to grantors and others as substantial owners

Cited by 1 Code section

§ 877A(h)(3) Tax responsibilities of expatriation

Cited in 2 regulations not issued under it

Amendment history

From the source credit and the official notes, newest first.

December 17, 2010Amended by Pub. L. 111–312
June 7, 2001Amended by Pub. L. 107–16
August 5, 1997Added by Pub. L. 105–34

Where it sits in the Code

Nearby sections

§ 681 Limitation on charitable deduction
§ 682 Repealed
§ 683 Use of trust as an exchange fund
§ 684 Recognition of gain on certain transfers to certain foreign trusts and estates
§ 685 Treatment of funeral trusts

Official notes

Show the Law Revision Counsel's notes (amendments, effective dates)

Editorial Notes

Codification

Another section 1131(b) of Pub. L. 105–34 amended sections 367, 721, and 1035 of this title.

Amendments

2010—Pub. L. 111–312 amended catchline, introductory provisions of subsec. (a), and subsec. (b) to read as if amendment by Pub. L. 107–16, § 542(e)(1)(A)–(C), had never been enacted. See 2001 Amendment note below. Prior to amendment, subsec. (b) read as follows: “Exceptions.—

“(1) Transfers to certain trusts.—Subsection (a) shall not apply to a transfer to a trust by a United States person to the extent that any United States person is treated as the owner of such trust under section 671.

“(2) Lifetime transfers to nonresident aliens.—Subsection (a) shall not apply to a lifetime transfer to a nonresident alien.”

2001—Pub. L. 107–16, § 542(e)(1)(A)–(C), amended section by inserting “and nonresident aliens” after “estates” in section catchline and “or to a nonresident alien” after “or trust” in introductory provisions of subsec. (a) and amending subsec. (b) generally. Prior to amendment, text of subsec. (b) read as follows: “Subsection (a) shall not apply to a transfer to a trust by a United States person to the extent that any person is treated as the owner of such trust under section 671.”

Effective Date of 2010 Amendment

Amendment by Pub. L. 111–312 applicable to estates of decedents dying, and transfers made after Dec. 31, 2009, except as otherwise provided, see section 301(e) of Pub. L. 111–312, set out as an Effective and Termination Dates of 2010 Amendment note under section 121 of this title.

Effective Date of 2001 Amendment

Amendment by Pub. L. 107–16 applicable to transfers after Dec. 31, 2009, see section 542(f)(2) of Pub. L. 107–16, set out as a note under section 121 of this title.