pass-thru entity

(6) Treatment of pass-thru entities (A) Imposition of tax If, at any time during any taxable year of a pass-thru entity, a disqualified organization is the record holder of an interest in such entity, there is hereby imposed on such entity for such taxable year a tax equal to the product of— (i) the amount of excess inclusions for such taxable year allocable to the interest held by such disqualified organization, multiplied by (ii) the highest rate of tax specified in section 11(b). (B) Pass-thru entity For purposes of this paragraph, the term “pass-thru entity” means— (i) any regulated investment company, real estate investment trust, or common trust fund, (ii) any partnership, trust, or estate, and (iii) any organization to which part I of subchapter T applies. Except as provided in regulations, a person holding an interest in a pass-thru entity as a nominee for another person shall, with respect to such interest, be treated as a pass-thru entity. (C) Tax to be deductible Any tax imposed by this paragraph with respect to any excess inclusion of any pass-thru entity for any taxable year shall, for purposes of this title (other than this subsection), be applied against (and operate to reduce) the amount included in gross income with respect to the residual interest involved. (D) Exception where holder furnishes affidavit No tax shall be imposed by subparagraph (A) with respect to any interest in a pass-thru entity for any period if— (i) the record holder of such interest furnishes to such pass-thru entity an affidavit that such record holder is not a disqualified organization, and (ii) during such period, the pass-thru entity does not have actual knowledge that such affidavit is false.


26 USC § 860E(e)(6)

Scoping language

For purposes of this paragraph
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