§139G — Title 26 Internal Revenue Code | U.S. Code

Summary

An Alaska Native Corporation can sign over payments it is owed under the Alaska Native Claims Settlement Act to a Settlement Trust without paying income tax on them. The exclusion works only if the assignment is in writing and the corporation has not already received the money. Instead, the Settlement Trust reports the payments as income when it actually receives them, and the income keeps the same character it would have had in the corporation's hands. The assignment must describe what is being transferred with reasonable particularity, either as a percentage of payments or a fixed dollar amount, and must state how long it lasts and whether it can be revoked. The corporation cannot also take a deduction for the assigned amounts.

Title 26, §139G

Internal Revenue Code — Source: USLM XML via OLRC

(a)In the case of a Native Corporation, gross income shall not include the value of any payments that would otherwise be made, or treated as being made, to such Native Corporation pursuant to, or as required by, any provision of the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.), including any payment that would otherwise be made to a Village Corporation pursuant to section 7(j) of the Alaska Native Claims Settlement Act (43 U.S.C. 1606(j)), provided that any such payments—

(1)are assigned in writing to a Settlement Trust, and

(2)were not received by such Native Corporation prior to the assignment described in paragraph (1).

(b)In the case of a Settlement Trust which has been assigned payments described in subsection (a), gross income shall include such payments when received by such Settlement Trust pursuant to the assignment and shall have the same character as if such payments were received by the Native Corporation.

(c)The amount and scope of any assignment under subsection (a) shall be described with reasonable particularity and may either be in a percentage of one or more such payments or in a fixed dollar amount.

(d)Any assignment under subsection (a) shall specify—

(1)a duration either in perpetuity or for a period of time, and

(2)whether such assignment is revocable.

(e)Notwithstanding section 247, no deduction shall be allowed to a Native Corporation for purposes of any amounts described in subsection (a).

(f)For purposes of this section, the terms “Native Corporation” and “Settlement Trust” have the same meaning given such terms under section 646(h).

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Alaska Native Claims Settlement Act, referred to in subsec. (a), is Pub. L. 92–203, Dec. 18, 1971, 85 Stat. 688, which is classified generally to chapter 33 (§ 1601 et seq.) of Title 43, Public Lands. For complete classification of this Act to the Code, see

Short Title

note set out under section 1601 of Title 43 and Tables.

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 115–97, title I, § 13821(a)(3), Dec. 22, 2017, 131 Stat. 2178, provided that: “The

Amendments

made by this subsection [enacting this section] shall apply to taxable years beginning after December 31, 2016.”

§139G Assignments to Alaska Native Settlement Trusts