§677 — Income for benefit of grantor
45 cases·11 followed·2 distinguished·1 criticized·2 overruled·29 cited—24% support
Statute Text — 26 U.S.C. §677
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—
distributed to the grantor or the grantor’s spouse;
held or accumulated for future distribution to the grantor or the grantor’s spouse; or
applied to the payment of premiums on policies of insurance on the life of the grantor or the grantor’s spouse (except policies of insurance irrevocably payable for a purpose specified in section 170(c) (relating to definition of charitable contributions)).
This subsection shall not apply to 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 the 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.
Income of a trust shall not be considered taxable to the grantor under subsection (a) or any other provision of this chapter merely because such income in the discretion of another person, the trustee, or the grantor acting as trustee or co-trustee, may be applied or distributed for the support or maintenance of a beneficiary (other than the grantor’s spouse) whom the grantor is legally obligated to support or maintain, except to the extent that such income is so applied or distributed. In cases where the amounts so applied or distributed are paid out of corpus or out of other than income for the taxable year, such amounts shall be considered to be an amount paid or credited within the meaning of paragraph (2) of section 661(a) and shall be taxed to the grantor under section 662.
45 Citing Cases
They assert that the Court did not address whether the MCLT was a grantortrust and that the Court "did not overrule the Bankruptcy Court with respect to its finding * * *, the Supreme Court merely said that Petitioner is not a 'grantor' in the classic sense ofthe term." Petitioners are wrong.
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 .
Pursuant to section 677(a), Textron is considered to be the grantor of a grantor trust; to wit, the voting trust.
d the owner under subpart E of part I of subchapter J (relating to grantors and others treated as substantial owners) shall be considered as owned by such person. Petitioner does not argue that the voting trust is properly characterized as a foreign trust. The fact that Textron could not vote the Avdel shares is of no concern to us for purposes of sec. 677.
(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 party, me sec. 677. IV. Winch Road Property Income We examine Lost Creek Trust using the four-factortest that we applied in Markosian v. Commissioner, 73 T.C. at 1243-1244. A. Petitioners and Mr. Leach's Relationship With the Winch Road Property Petitioners and
Fourth, specified powers to control beneficial enjoyment of the corpus or income are "vested in the grantor or certain other persons. Sec. 674. 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 t
Fourth, specified powers to control beneficial enjoyment of the corpus or income are vested in the grantor or certain other persons . Sec . 674 . 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 o
Fourth, specified powers - 25 - to control beneficial enjoyment of the corpus or income are vested in the grantor or certain other persons. Sec. 674. 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
Fourth, specified powers - 25 - to control beneficial enjoyment of the corpus or income are vested in the grantor or certain other persons. Sec. 674. 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
Fourth, specified powers - 25 - to control beneficial enjoyment of the corpus or income are vested in the grantor or certain other persons. Sec. 674. 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
73, (2) the trust cannot be revoked by the grantor or a nonadverse party, sec. 676, (3) trust income cannot be distributed to the grantor or the 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 - 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
673), (2) the trust cannot be revoked by the grantor or a nonadverse party (sec. 676), (3) trust income cannot be distributed to the grantor or the 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
73, (2) the trust cannot be revoked by the grantor or a nonadverse party, sec. 676, (3) trust income cannot be distributed to the grantor or the 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 - 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
73, (2) the trust cannot be revoked by the grantor or a nonadverse party, sec. 676, (3) trust income cannot be distributed to the grantor or the 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 - 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
73; (2) the trust cannot be revoked by the grantor or a nonadverse party, sec. 676; (3) trust income cannot be distributed to the grantor or the 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, s
73, (2) the trust cannot be revoked by the grantor or a nonadverse party, sec. 676, (3) trust income cannot be distributed to the grantor or the 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 - 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
The trust is a grantor trust, and the positions of the parties will be considered accordingly. Contrary to petitioner's argument, section 67(e) does not and cannot apply to grantor trusts.1 Because the items of income and deductions are passed through to the grantor, the adjusted gross income of a grantor trust, in effect, is not a viable
The regulations provide the following interpretive gloss on the scope of the statutory language: Under Section 677 the grantor is treated as the owner of a portion of a trust if he has retained any interest which might, without the approval or consent of an adverse party, enable him to have the income from that portion distributed to him at some time either actually or constructively * * *.
The regulations provide the following interpretive gloss on the scope of the statutory language: Under Section 677 the grantor is treated as the owner of a portion of a trust if he has retained any interest which might, without the approval or consent of an adverse party, enable him to have the income from that portion distributed to him at some time either actually or constructively * * *.
The regulations provide the following interpretive gloss on the scope of the statutory language: Under Section 677 the grantor is treated as the owner of a portion of a trust if he has retained any interest which might, without the approval or consent of an adverse party, enable him to have the income from that portion distributed to him at some time either actually or constructively * * *.