§681 — Limitation on charitable deduction
15 cases·2 overruled·13 cited
Statute Text — 26 U.S.C. §681
In computing the deduction allowable under section 642(c) to a trust, no amount otherwise allowable under section 642(c) as a deduction shall be allowed as a deduction with respect to income of the taxable year which is allocable to its unrelated business income for such year. For purposes of the preceding sentence, the term “unrelated business income” means an amount equal to the amount which, if such trust were exempt from tax under section 501(a) by reason of section 501(c)(3), would be computed as its unrelated business taxable income under section 512 (relating to income derived from certain business activities and from certain property acquired with borrowed funds).
For disallowance of certain charitable, etc., deductions otherwise allowable under section 642(c), see sections 508(d) and 4948(c)(4).
15 Citing Cases
Specifically, the Commissioner seeks a ruling that the Trusts’ shares of the noncash charitable contributions from Hobby Lobby that 10 would otherwise be allowable under section 642(c) are fully disallowed by section 681 because they are entirely allocable to the Trusts’ unrelated business income.