[Code of Federal Regulations]
[Title 26, Volume 8]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.643(b)-1]

[Page 58]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.643(b)-1  Definition of ``income''.

    For purposes of subparts A through D, part I, subchapter J, chapter 
1 of the Code, the term income when not preceded by the words 
``taxable'', ``distributable net'', ``undistributed net'', or ``gross'', 
means the amount of income of an estate or trust for the taxable year 
determined under the terms of its governing instrument and applicable 
local law. Trust provisions which depart fundamentally from concepts of 
local law in the determination of what constitutes income are not 
recognized for this purpose. For example, if a trust instrument directs 
that all the trust income shall be paid to A, but defines ordinary 
dividends and interest as corpus, the trust will not be considered one 
which under its governing instrument is required to distribute all its 
income currently for purposes of section 642(b) (relating to the 
personal exemption) and section 651 (relating to ``simple'' trusts).