[Code of Federal Regulations]
[Title 26, Volume 5]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.402(c)-1]

[Page 339-340]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
DEFERRED COMPENSATION, ETC.--Table of Contents
 
Sec. 1.402(c)-1  Taxability of beneficiary of certain foreign situs trusts.

    Section 402(c) has the effect of treating, for purposes of section 
402, the distributions from a trust which at the time of the 
distribution is located outside the United States in the same manner as 
distributions from a trust which is located in the United States. If the 
trust would qualify for exemption from tax under section 501(a) except 
for the fact that it fails to comply with the provisions of paragraph 
(a)(3)(i) of Sec. 1.401-1, which restricts

[[Page 340]]

qualification to trusts created or organized in the United States and 
maintained here, section 402(a) and Sec. 1.402(a)-1 are applicable to 
the distributions from such a trust. Thus, for example, a total 
distribution from such a trust is entitled to the long-term capital 
gains treatment of section 402(a)(2), except in the case of a 
nonresident alien individual (see section 871 and 1441 and the 
regulations thereunder). However, if the plan fails to meet any 
requirement of section 401 and the regulations thereunder in addition to 
paragraph (a)(3)(i) of Sec. 1.401-1, section 402(b) and Sec. 1.402(b)-1 
are applicable to the distributions from such a trust.

[T.D. 6500, 25 FR 11679, Nov. 26, 1960]