PUBLIC LAW 91-172-DEC. 30, 1969
be deemed to have properly distributed on the last day of such preceding taxable year an additional amount. Such additional amount shall be equal to the taxes imposed on the trust for such taxable year attributable to such undistributed capital gain multiplied by the ratio of the portion of the capital gain distribution to the undistributed capital gain of the trust for such year. For purposes of this subsection the undistributed capital gain and the taxes imposed on the trust for such preceding taxable year attributable to such gain shall be computed without regard to the capital gain distribution and without regard to any capital gain distribution determined for any succeeding taxable year. "(f) CHARACTER OF CAPITAL GAIN.—For purposes of this section the character of the capital gain of a trust for any taxable year with respect to a beneficiary shall be the same as it was with respect to the trust." (b)
68A Stat 222.
DISTRIBUTIONS I N FIRST SIXTY-FIVE DAYS OF TAXABLE YEAR.—
Se(.tion 663(b)(2) (relating to limitation on sixty-five day rule) is
2 6 UoC^ 0 0 0,
79 Stat. 168.
1 1 1
amended to read as follows: "(2) LIMITATION.—Paragraph (1) shall apply with respect to any taxable year of a trust only if the fiduciary of such trust elects in such manner and at such time as the Secretary or his delegate prescribes by regulations, to have paragraph (1) apply for such taxable year." ^^^ EXCESSIVE CREDITS.—Section 6401(b) (relating to excessive credits) is amended— (1) by striking out "UNDER SECTIONS 31 AND 39" in the heading of such section; (2) by striking out "and 39 (relating" in the text of such section and inserting in lieu thereof ", 39 (relating"; and (3) by inserting after "lubricating o i l) " in the text of such section "and 667 (b) (relating to taxes paid by certain trusts)". (d)
EFFECTIVE DATE.— (1) GENERAL RULE.—Except
as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 1968. (2) EXCEPTIONS.—
Ante, p. 5 9 3.
(A) Amounts paid, credited, or required to be distributed by a trust (other than a foreign trust created by a United States person) on or before the last day of a taxable year of the trust beginning before January 1, 1974, shall not be deemed to be accumulation distributions to the extent that such amounts were accumulated by a trust in taxable years of such trust beginning before January 1, 1969, and would have been excepted from the definition of an accumulation distribution by reason of paragraphs (1), (2), (3), or (4) of section 665(b) of the Internal Revenue Code of 1954, as in effect on - i - December 31, 1968, if they had been distributed on the last
- - i. 5 • day of the last taxable year of the trust beginning before
J" V January 1, 1969. (B) For taxable years of a trust begimiing before January 1, 1970, the first sentence of section 666(a) of the Internal Revenue Code of 1954 (as amended by this section) shall not apply, and the amount of the accumulation distribution of the trust for such taxable years shall be deemed to be an amount within the meaning of paragraph (2) of section 661(a) distributed on the last day of each of the preceding taxable years