§674 — Power to control beneficial enjoyment
62 cases·5 followed·27 distinguished·30 cited—8% support
Statute Text — 26 U.S.C. §674
The grantor shall be treated as the owner of any portion of a trust in respect of which the beneficial enjoyment of the corpus or the income therefrom is subject to a power of disposition, exercisable by the grantor or a nonadverse party, or both, without the approval or consent of any adverse party.
Subsection (a) shall not apply to the following powers regardless of by whom held:
A power described in section 677(b) to the extent that the grantor would not be subject to tax under that section.
A power, the exercise of which can only affect the beneficial enjoyment of the income for a period commencing after the occurrence of an event such that a grantor would not be treated as the owner under section 673 if the power were a reversionary interest; but the grantor may be treated as the owner after the occurrence of the event unless the power is relinquished.
A power exercisable only by will, other than a power in the grantor to appoint by will the income of the trust where the income is accumulated for such disposition by the grantor or may be so accumulated in the discretion of the grantor or a nonadverse party, or both, without the approval or consent of any adverse party.
A power to determine the beneficial enjoyment of the corpus or the income therefrom if the corpus or income is irrevocably payable for a purpose specified in section 170(c) (relating to definition of charitable contributions) or to an employee stock ownership plan (as defined in section 4975(e)(7)) in a qualified gratuitous transfer (as defined in section 664(g)(1)).
A power to distribute corpus either—
to or for a beneficiary or beneficiaries or to or for a class of beneficiaries (whether or not income beneficiaries) provided that the power is limited by a reasonably definite standard which is set forth in the trust instrument; or
to or for any current income beneficiary, provided that the distribution of corpus must be chargeable against the proportionate share of corpus held in trust for the payment of income to the beneficiary as if the corpus constituted a separate trust.
A power does not fall within the powers described in this paragraph if any person has a power to add to the beneficiary or beneficiaries or to a class of beneficiaries designated to receive the income or corpus, except where such action is to provide for after-born or after-adopted children.
A power to distribute or apply income to or for any current income beneficiary or to accumulate the income for him, provided that any accumulated income must ultimately be payable—
to the beneficiary from whom distribution or application is withheld, to his estate, or to his appointees (or persons named as alternate takers in default of appointment) provided that such beneficiary possesses a power of appointment which does not exclude from the class of possible appointees any person other than the beneficiary, his estate, his creditors, or the creditors of his estate, or
on termination of the trust, or in conjunction with a distribution of corpus which is augmented by such accumulated income, to the current income beneficiaries in shares which have been irrevocably specified in the trust instrument.
Accumulated income shall be considered so payable although it is provided that if any beneficiary does not survive a date of distribution which could reasonably have been expected to occur within the beneficiary’s lifetime, the share of the deceased beneficiary is to be paid to his appointees or to one or more designated alternate takers (other than the grantor or the grantor’s estate) whose shares have been irrevocably specified. A power does not fall within the powers described in this paragraph if any person has a power to add to the beneficiary or beneficiaries or to a class of beneficiaries designated to receive the income or corpus except where such action is to provide for after-born or after-adopted children.
A power exercisable only during—
the existence of a legal disability of any current income beneficiary, or
the period during which any income beneficiary shall be under the age of 21 years,
to distribute or apply income to or for such beneficiary or to accumulate and add the income to corpus. A power does not fall within the powers described in this paragraph if any person has a power to add to the beneficiary or beneficiaries or to a class of beneficiaries designated to receive the income or corpus, except where such action is to provide for after-born or after-adopted children.
A power to allocate receipts and disbursements as between corpus and income, even though expressed in broad language.
Subsection (a) shall not apply to a power solely exercisable (without the approval or consent of any other person) by a trustee or trustees, none of whom is the grantor, and no more than half of whom are related or subordinate parties who are subservient to the wishes of the grantor—
to distribute, apportion, or accumulate income to or for a beneficiary or beneficiaries, or to, for, or within a class of beneficiaries; or
to pay out corpus to or for a beneficiary or beneficiaries or to or for a class of beneficiaries (whether or not income beneficiaries).
A power does not fall within the powers described in this subsection if any person has a power to add to the beneficiary or beneficiaries or to a class of beneficiaries designated to receive the income or corpus, except where such action is to provide for after-born or after-adopted children. For periods during which an individual is the spouse of the grantor (within the meaning of section 672(e)(2)), any reference in this subsection to the grantor shall be treated as including a reference to such individual.
Subsection (a) shall not apply to a power solely exercisable (without the approval or consent of any other person) by a trustee or trustees, none of whom is the grantor or spouse living with the grantor, to distribute, apportion, or accumulate income to or for a beneficiary or beneficiaries, or to, for, or within a class of beneficiaries, whether or not the conditions of paragraph (6) or (7) of subsection (b) are satisfied, if such power is limited by a reasonably definite external standard which is set forth in the trust instrument. A power does not fall within the powers described in this subsection if any person has a power to add to the beneficiary or beneficiaries or to a class of beneficiaries designated to receive the income or corpus except where such action is to provide for after-born or after-adopted children.
62 Citing Cases
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 1.674(a)-1(a), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the grantor or a nonadverse party has a power, beyond specified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciary power, a power of appointment, or any other power.
Section 677 provides: 23 [*23] The grantor shall be treated as the owner of any portion of a trust, whether or not he is treated as such owner under section 674, whose income without the approval or consent of any adverse party is, or, in the discretion of the grantor or nonadverse party, or both, may be .
ng conditions are met: (1) the grantorpossesses a disqualifying reversionary interest, s_e_e sec. 673; (2) specified powers to control beneficial - 32 - [*32] enjoyment ofthe corpus or income are vested in the grantor or certain other persons, gee sec. 674; (3) certain administrative powers are exercisable by the grantor or a nonadverse party,18 gee sec. 675; (4) the trust can be revoked by the grantor or a nonadverse party, see sec. 676; or (5) trust income can be distributed to the grantor or
Fifth, certain administrative powers are exercisable by the grantor or a nonadverse party. Sec. 675. Petitioner had full control over the 1978 Trust as indicated by the trust instrument. None of the other trustees nor any other party could limit the distribution of either principal or income to petitioner. Furthermore, petitioner ultimate
Fifth, certain administrative powers are exercisable by the grantor or a nonadverse party. Sec. 675. Adverse party is defined as “any person having a substantial beneficial interest in the trust which would be adversely affected by the exercise or nonexercise of the power which he possesses respecting the trust.” Sec. 672(a). Even if the
Fifth, certain administrative powers are exercisable by the grantor or a nonadverse party. Sec. 675. Adverse party is defined as “any person having a substantial beneficial interest in the trust which would be adversely affected by the exercise or nonexercise of the power which he possesses respecting the trust.” Sec. 672(a). Even if the
Fifth, certain administrative powers are exercisable by the grantor or a nonadverse party. Sec. 675. Adverse party is defined as “any person having a substantial beneficial interest in the trust which would be adversely affected by the exercise or nonexercise of the power which he possesses respecting the trust.” Sec. 672(a). Even if the
(a) General Rule.--The grantor shall be treated as the owner of any portion of a trust, whether or not he is treated as such owner under section 674, whose - 23 - income without the approval or consent of any adverse party is, or, in the discretion of the grantor or a nonadverse party, or both, may be-- (1) distributed to the grantor or the grantor’s spouse; (2) held or accumulated for future distribution to the grantor or the grantor’s spouse; or (3) applied to the payment of prem
r’s spouse or be used to pay for insurance on their lives without the consent of an adverse party, sec. 677, (4) specified powers to control - 27 - beneficial enjoyment of the corpus or income are not vested in the grantor or certain other persons (sec. 674), and (5) certain administrative powers are not exercisable by the grantor or a nonadverse party (sec. 675). (4) Discusssion The facts establish that one or both of the J. Shirleys performed services for which payment was made and neither rep
he grantor’s spouse or used to pay for insurance on their lives without the consent of an adverse party (sec. 677), (4) specified powers to control beneficial enjoyment of the corpus or income are not vested in the grantor or certain other persons (sec. 674), and (5) certain administrative powers are not exercisable by the grantor or a nonadverse party (sec. 675). 4. Analysis a. Income With respect to Complete Connections Trust, we have found that petitioners carried on the same business activit
r’s spouse or be used to pay for insurance on their lives without the consent of an adverse party, sec. 677, (4) specified powers to control - 27 - beneficial enjoyment of the corpus or income are not vested in the grantor or certain other persons (sec. 674), and (5) certain administrative powers are not exercisable by the grantor or a nonadverse party (sec. 675). (4) Discusssion The facts establish that one or both of the J. Shirleys performed services for which payment was made and neither rep
r’s spouse or be used to pay for insurance on their lives without the consent of an adverse party, sec. 677, (4) specified powers to control - 27 - beneficial enjoyment of the corpus or income are not vested in the grantor or certain other persons (sec. 674), and (5) certain administrative powers are not exercisable by the grantor or a nonadverse party (sec. 675). (4) Discusssion The facts establish that one or both of the J. Shirleys performed services for which payment was made and neither rep
e grantor’s spouse or be used to pay for insurance on their lives without the consent of an adverse party, sec. 677; (4) specified powers to control beneficial enjoyment of the corpus or income are not vested in the grantor or certain other persons, sec. 674; and (5) certain administrative powers are not exercisable by the grantor or a nonadverse party, sec. 675. - 24 - d. Analysis The Careys bear the burden of proof. They have failed to prove that the trust interest and business gross receipts
r’s spouse or be used to pay for insurance on their lives without the consent of an adverse party, sec. 677, (4) specified powers to control - 27 - beneficial enjoyment of the corpus or income are not vested in the grantor or certain other persons (sec. 674), and (5) certain administrative powers are not exercisable by the grantor or a nonadverse party (sec. 675). (4) Discusssion The facts establish that one or both of the J. Shirleys performed services for which payment was made and neither rep
— The grantor shall be treated as the owner of any portion of a trust, whether or not he is treated as such owner under section 674, whose income without the approval or consent of any adverse party is, or, in the discretion of the grantor or a nonadverse party, or both, may be- ll) distributed to the grantor or the grantor’s spouse; (2) held or accumulated for future distribution to the grantor or the grantor’s spouse; or (3) applied to the payment of premiums oh p
Section 1.674(a)-1( ), Income Tax Regs., provides: Under section 674, the grantor is treated as the owner of a portion of a trust if the gradtor or a nonadverse party has a power, beyond spe(ified limits, to dispose of the beneficial enjoyment of the income or corpus, whether the power is a fiduciarylpower, a power of appointment, or any other power.
eturn of property. The phrase does not appear in new Rule 41(f), which now speaks to motions to suppress, but it has not been doubted that the concept is still applicable to a Rule 41(f) motion. C. Wright, Federal Practice and Procedure: Criminal 2d sec. 674, p. 770 n. 1 (1982). 8 The Supreme Court, which had often spoken in terms of "standing," attempted to abolish the use of the term in Rakas v. Illinois, 439 U.S. 128 (1978): Rigorous application of the principle that the rights secured by thi
turn of property. The phrase does not appear in new rule 41(f), which now speaks to motions to suppress, but it has not been doubted that the concept is still applicable to a rule 41(f) motion. C. Wright, Federal Practice and Procedure: Criminal 2d, sec. 674, at 770 n. 1 (1982). The Supreme Court, which had often spoken in terms of “standing,” attempted to abolish the use of the term in Rakas v. Illinois, 439 U.S. 128 (1978): “Rigorous application of the principle that the rights seemed by this