Where it is specified in this subpart that the grantor or another person shall be treated as the owner of any portion of a trust, there shall then be included in computing the taxable income and credits of the grantor or the other person those items of income, deductions, and credits against tax of the trust which are attributable to that portion of the trust to the extent that such items would be taken into account under this chapter in computing taxable income or credits against the tax of an individual. Any remaining portion of the trust shall be subject to subparts A through D. No items of a trust shall be included in computing the taxable income and credits of the grantor or of any other person solely on the grounds of his dominion and control over the trust under section 61 (relating to definition of gross income) or any other provision of this title, except as specified in this subpart.
(Aug. 16, 1954, ch. 736, 68A Stat. 226.)
Certain Entities Not Treated as Corporations
Pub. L. 99– 4, title VI, §646, Oct. 22, 1986, 100 Stat. 2292, as amended by Pub. L. 100–647, title I, §1006(k), Nov. 10, 1988, 102 Stat. 3411, provided that:
“(1) such entity was created in 1906 as a common law trust and is governed by the trust laws of the State of Minnesota,
“(2) such entity is exclusively engaged in the leasing of mineral property and activities incidental thereto, and
“(3) income interests in such entity are publicly traded as of October 22, 1986, on a national stock exchange.
“(A) shall be made by the board of trustees of the entity before January 1, 1991, and
“(B) shall not be valid unless accompanied by an agreement described in paragraph (2).
“(i) surface rights to property the acquisition of which—
“(I) is necessary to mine mineral rights held on October 22, 1986, and
“(II) is required by a written binding agreement between the entity and an unrelated person entered into on or before October 22, 1986,
“(ii) surface rights to property which are not described in clause (i) and which—
“(I) are acquired in an exchange to which section 1031 [probably means section 1031 of this title] applies, and
“(II) are necessary to mine mineral rights held on October 22, 1986,
“(iii) tangible personal property incidental to the leasing of mineral property and activities incidental thereto, or
“(iv) part of any required reserves of the entity.
“(A) such entity shall be treated as having been liquidated into a trust immediately before the period described in subsection (c)(3) in a liquidation to which section 333 of the Internal Revenue Code of 1954 (as in effect before the amendments made by this Act) applies, and
“(B) for purposes of section 333 of such Code (as so in effect)—
“(i) any person holding an income interest in such entity as of such time shall be treated as a qualified electing shareholder, and
“(ii) the earnings and profits, and the value of money or stock or securities, of such entity shall be apportioned ratably among persons described in clause (i).
The amendments made by subtitle D of this title [subtitle D (§§631–634) of title VI of Pub. L. 99– 4, see Tables for classification] and section 1804 of this Act [see Tables for classification] shall not apply to any liquidation under this paragraph.
“(1) a reversionary interest shall not be taken into account until it comes into possession, and
“(2) all items of income, gain, loss, deduction, and credit shall be allocated to persons holding income interests for the period of the allocation.”