Internal Revenue Code:Sec. 675. Administrative powers
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter J - Estates, Trusts, Beneficiaries, and Decedents
PART I - ESTATES, TRUSTS, AND BENEFICIARIES
Subpart E - Grantors and Others Treated as Substantial Owners
Statute
Sec. 675. Administrative powers
The grantor shall be treated as the owner of any portion of a
trust in respect of which -
(1) Power to deal for less than adequate and full consideration
A power exercisable by the grantor or a nonadverse party, or
both, without the approval or consent of any adverse party
enables the grantor or any person to purchase, exchange, or
otherwise deal with or dispose of the corpus or the income
therefrom for less than an adequate consideration in money or
money's worth.
(2) Power to borrow without adequate interest or security
A power exercisable by the grantor or a nonadverse party, or
both, enables the grantor to borrow the corpus or income,
directly or indirectly, without adequate interest or without
adequate security except where a trustee (other than the grantor)
is authorized under a general lending power to make loans to any
person without regard to interest or security.
(3) Borrowing of the trust funds
The grantor has directly or indirectly borrowed the corpus or
income and has not completely repaid the loan, including any
interest, before the beginning of the taxable year. The
preceding sentence shall not apply to a loan which provides for
adequate interest and adequate security, if such loan is made by
a trustee other than the grantor and other than a related or
subordinate trustee subservient to the grantor. For periods
during which an individual is the spouse of the grantor (within
the meaning of section 672(e)(2)), any reference in this
paragraph to the grantor shall be treated as including a
reference to such individual.
(4) General powers of administration
A power of administration is exercisable in a nonfiduciary
capacity by any person without the approval or consent of any
person in a fiduciary capacity. For purposes of this paragraph,
the term ''power of administration'' means any one or more of the
following powers: (A) a power to vote or direct the voting of
stock or other securities of a corporation in which the holdings
of the grantor and the trust are significant from the viewpoint
of voting control; (B) a power to control the investment of the
trust funds either by directing investments or reinvestments, or
by vetoing proposed investments or reinvestments, to the extent
that the trust funds consist of stocks or securities of
corporations in which the holdings of the grantor and the trust
are significant from the viewpoint of voting control; or (C) a
power to reacquire the trust corpus by substituting other
property of an equivalent value.
Sources
(Aug. 16, 1954, ch. 736, 68A Stat. 229; Pub. L. 100-647, title I,
Sec. 1014(a)(2), Nov. 10, 1988, 102 Stat. 3559.)
Miscellaneous
AMENDMENTS
1988 - Par. (3). Pub. L. 100-647 inserted at end ''For periods
during which an individual is the spouse of the grantor (within the
meaning of section 672(e)(2)), any reference in this paragraph to
the grantor shall be treated as including a reference to such
individual.''
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective, except as otherwise
provided, as if included in the provision of the Tax Reform Act of
1986, Pub. L. 99-514, to which such amendment relates, see section
1019(a) of Pub. L. 100-647, set out as a note under section 1 of
this title.
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 672, 678 of this title.
