Title 26, Internal Revenue CodeRelease 119-110

§651 Deduction for Trusts Distributing Current Income Only

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

Last updated Sep 22, 2026|Official source

Summary

Allows a trust to subtract from its taxable income the income it must pay out right away, but only if the trust requires all income to be paid currently and does not require charitable payments or money to be set aside. If the trust pays out other amounts in a year, the subtraction does not apply. The subtraction cannot be more than the trust’s distributable net income (DNI); when figuring DNI, leave out income that isn’t part of the trust’s gross taxable income and the deductions tied to that income.

Full Legal Text

Title 26, §651

Internal Revenue Code, Source: USLM XML via OLRC

(a)Deduction

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),

there shall be allowed as a deduction in computing the taxable income of the trust the amount of the income for the taxable year which is required to be distributed currently. This section shall not apply in any taxable year in which the trust distributes amounts other than amounts of income described in paragraph (1).

(b)Limitation on deduction

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

Sep 22, 2026

Release point: 119-110