§661 — Deduction for estates and trusts accumulating income or distributing corpus
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Statute Text — 26 U.S.C. §661
In any taxable year there shall be allowed as a deduction in computing the taxable income of an estate or trust (other than a trust to which subpart B applies), the sum of—
any amount of income for such taxable year required to be distributed currently (including any amount required to be distributed which may be paid out of income or corpus to the extent such amount is paid out of income for such taxable year); and
any other amounts properly paid or credited or required to be distributed for such taxable year;
but such deduction shall not exceed the distributable net income of the estate or trust.
The amount determined under subsection (a) shall be treated as consisting of the same proportion of each class of items entering into the computation of distributable net income of the estate or trust as the total of each class bears to the total distributable net income of the estate or trust in the absence of the allocation of different classes of income under the specific terms of the governing instrument. In the application of the preceding sentence, the items of deduction entering into the computation of distributable net income (including the deduction allowed under section 642(c)) shall be allocated among the items of distributable net income in accordance with regulations prescribed by the Secretary.
No deduction shall be allowed under subsection (a) in respect of any portion of the amount allowed as a deduction under that subsection (without regard to this subsection) which is treated under subsection (b) as consisting of any item of distributable net income which is not included in the gross income of the estate or trust.
24 Citing Cases
2036 (transfers with retained life estates); 2037 (transfers taking effect at death); 2038 (revocable transfers); 2042 (proceeds of life insurance), none of the payments or distributions of which are included in section 661 and 662 distributions.
* * * (3) Business deductions are allowed IRC section 661.[4] 2 The principal place of business of Adorno Business was in Chicago, Ill., at the time that the petition was filed with the Court.
There was attached to the return a document entitled, "Disclosure Statement Under Code Section 661 [sic] Schedule C, Line1 [sic]." That document states as follows: This return omits receipt of Income (Form 1099 from Colonial National Bank in the amount of $886,069.00).