(2) Definitions and special rules For purposes of this subsection— (A) Cash The term “cash” includes foreign currencies and cash equivalents. (B) Related person (i) In general A person is related to another person if the relationship between such persons would result in a disallowance of losses under section 267 or 707(b). In applying section 267 for purposes of the preceding sentence, section 267(c)(4) shall be applied as if the family of an individual includes the spouses of the members of the family. (ii) Allocation If any person described in paragraph (1)(B) is related to more than one person, the grantor or beneficiary to whom the treatment under this subsection applies shall be determined under regulations prescribed by the Secretary. (C) Exclusion of tax-exempts The term “United States person” does not include any entity exempt from tax under this chapter. (D) Trust not treated as simple trust Any trust which is treated under this subsection as making a distribution shall be treated as not described in section 651. (E) Exception for compensated use of property In the case of the use of any trust property other than a loan of cash or marketable securities, paragraph (1) shall not apply to the extent that the trust is paid the fair market value of such use within a reasonable period of time of such use.


26 USC § 643(i)(2)

Scoping language

For purposes of this subsection
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