§675 — Administrative powers
61 cases·2 followed·8 distinguished·1 overruled·50 cited—3% support
Statute Text — 26 U.S.C. §675
The grantor shall be treated as the owner of any portion of a trust in respect of which—
A power exercisable by the grantor or a nonadverse party, or both, without the approval or consent of any adverse party enables the grantor or any person to purchase, exchange, or otherwise deal with or dispose of the corpus or the income therefrom for less than an adequate consideration in money or money’s worth.
A power exercisable by the grantor or a nonadverse party, or both, enables the grantor to borrow the corpus or income, directly or indirectly, without adequate interest or without adequate security except where a trustee (other than the grantor) is authorized under a general lending power to make loans to any person without regard to interest or security.
The grantor has directly or indirectly borrowed the corpus or income and has not completely repaid the loan, including any interest, before the beginning of the taxable year. The preceding sentence shall not apply to a loan which provides for adequate interest and adequate security, if such loan is made by a trustee other than the grantor and other than a related or subordinate trustee subservient to the grantor. For periods during which an individual is the spouse of the grantor (within the meaning of section 672(e)(2)), any reference in this paragraph to the grantor shall be treated as including a reference to such individual.
A power of administration is exercisable in a nonfiduciary capacity by any person without the approval or consent of any person in a fiduciary capacity. For purposes of this paragraph, the term “power of administration” means any one or more of the following powers: (A) a power to vote or direct the voting of stock or other securities of a corporation in which the holdings of the grantor and the trust are significant from the viewpoint of voting control; (B) a power to control the investment of the trust funds either by directing investments or reinvestments, or by vetoing proposed investments or reinvestments, to the extent that the trust funds consist of stocks or securities of corporations in which the holdings of the grantor and the trust are significant from the viewpoint of voting control; or (C) a power to reacquire the trust corpus by substituting other property of an equivalent value.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.675-1 Administrative powers
- Treas. Reg. §Treas. Reg. §1.675-1(a) General rule.
- Treas. Reg. §Treas. Reg. §1.675-1(b) Prohibited controls.
- Treas. Reg. §Treas. Reg. §1.675-1(c) Authority of trustee.
- Treas. Reg. §Treas. Reg. §1.675-1(i) §1.675-1(i)
61 Citing Cases
(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 the grantor's spouse or be used to pay for insurance on their lives without the consent ofan adverse pa
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 ultimately became the only trustee after a 1995 modification of the trust instrument. The trust is therefore
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 ultimately became the only trustee after a 1995 modification of the trust instrument. The trust is therefore
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 section 672 definition of an adverse party is satisfied, however, sections 674-677 require a trust’s
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 section 672 definition of an adverse party is satisfied, however, sections 674-677 require a trust’s
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 section 672 definition of an adverse party is satisfied, however, sections 674-677 require a trust’s
, (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 reported any compensation, either directly or indirectly (e.g, by way of salary), for performing such services
ec. 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 activities both before and after the trust reported income from such activities, and we have found that petitione
, (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 reported any compensation, either directly or indirectly (e.g, by way of salary), for performing such services
, (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 reported any compensation, either directly or indirectly (e.g, by way of salary), for performing such services
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 should not be taxed to them under either the fundamental principles or grantor trust rules described above
, (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 reported any compensation, either directly or indirectly (e.g, by way of salary), for performing such services
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a
Section 675(3) provides that the grantor is treated as the owner of any portion of a trust in respect of which the grantor - 369 - has directly or indirectly borrowed the corpus or income of the trust and has not completely repaid the loan, including any interest, before the beginning of the taxable year. However, this section does not apply to a