Tenn. Comp. R. & Regs. 1320-03-02-.13 - CHARITABLE REMAINDER TRUSTS
(1) Charitable
remainder trusts, as defined in §664 of the Internal Revenue Code, are
taxable in the following manner:
(a) Income
earned by such a trust shall be taxable up to the amount of such income
distributed to the income beneficiary whether such income is earned in the tax
year or is undistributed income from prior years.
(b) The amount distributed to the income
beneficiary shall be considered paid from the trust income or corpus in the
following order:
1. Income subject to the 6%
tax rate under T.C.A. §
67-2-102(a) which
is earned in the tax year or is undistributed income of the trust for prior
years.
2. Income not subject to the
tax which is earned in the tax year or is undistributed income of the trust for
prior years
3. Trust
corpus.
Notes
Authority: T.C.A. §§ 67-1-102, 67-1-102(a), and 67-2-113.
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