Title 26 — Internal Revenue CodeRelease 119-73

§651 Deduction for trusts distributing current income only

Title 26 › Subtitle Subtitle A— - Income Taxes › Chapter CHAPTER 1— - NORMAL TAXES AND SURTAXES › Subchapter Subchapter J— - Estates, Trusts, Beneficiaries, and Decedents › Part PART I— - ESTATES, TRUSTS, AND BENEFICIARIES › Subpart Subpart B— - Trusts Which Distribute Current Income Only › § 651

Last updated Apr 6, 2026|Official source

Summary

A trust that must pay out all of its income now and that does not set aside any money for charitable uses under section 642(c) can deduct the income it actually distributes to its beneficiaries. If the amount the trust is required to pay out is more than its distributable net income (DNI) for the tax year, the deduction is limited to the DNI. Distributable net income: the trust’s income for distribution purposes, figured without income items that aren’t included in the trust’s gross income and the deductions related to those items.

Full Legal Text

Title 26, §651

Internal Revenue Code — Source: USLM XML via OLRC

(a)In the case of any trust the terms of which—

(1)provide that all of its income is required to be distributed currently, and

(2)do not provide that any amounts are to be paid, permanently set aside, or used for the purposes specified in section 642(c) (relating to deduction for charitable, etc., purposes),

(b)If the amount of income required to be distributed currently exceeds the distributable net income of the trust for the taxable year, the deduction shall be limited to the amount of the distributable net income. For this purpose, the computation of distributable net income shall not include items of income which are not included in the gross income of the trust and the deductions allocable thereto.

Reference

Citations & Metadata

Citation

26 U.S.C. § 651

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73