[Federal Register Volume 79, Number 137 (Thursday, July 17, 2014)]
[Rules and Regulations]
[Page 41636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-16834]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9664]
RIN 1545-BF80


Section 67 Limitations on Estates or Trusts; Change of Effective 
Date

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations; amendment.

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SUMMARY: This document amends final regulations (TD 9664) that were 
published in the Federal Register on May 9, 2014. The final regulations 
provide guidance on which costs incurred by estates or trusts other 
than grantor trusts (non-grantor trusts) are subject to the 2-percent 
floor for miscellaneous itemized deductions under section 67(a) of the 
Internal Revenue Code.

DATES: Effective Date: This amendment to the final regulations 
published on May 9, 2014 (79 FR 90), is effective on July 17, 2014.
    Applicability Date: For date of applicability, see Sec.  1.67-4(d).

FOR FURTHER INFORMATION CONTACT: Jennifer N. Keeney, (202) 317-6850 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations that are the subject of these amendments are 
under section 67 of the Internal Revenue Code. The final regulations 
(TD 9664) were published in the Federal Register on Friday, May 9, 2014 
(79 FR 90). The final regulations applied to taxable years beginning on 
or after May 9, 2014.

Need for Amendment

    The Treasury Department and the IRS received a comment raising 
concerns about the effective/applicability date of the regulations. As 
issued, the final regulations apply to taxable years beginning on or 
after May 9, 2014. Therefore, fiduciaries of existing trusts and 
calendar-year estates would implement the rules beginning January 1, 
2015. However, the rules would apply immediately to any non-grantor 
trust created after May 8, 2014, the estate of any decedent who dies 
after May 8, 2014, and any existing fiscal-year estate with a taxable 
year beginning after May 8, 2014. The commentator stated that the 
effective/applicability date in the regulations does not give 
fiduciaries of these trusts and estates sufficient time to implement 
the changes that are necessary to comply with the regulations. 
Specifically, the commentator is concerned about allowing fiduciaries 
sufficient time to design and implement the necessary program changes 
to determine the portion of a bundled fee that is attributable to costs 
that are subject to the 2-percent floor versus costs that are not 
subject to the 2-percent floor. In response to these comments, this 
document amends Sec.  1.67-4(d) of the Final Regulations so that the 
regulations apply to taxable years beginning on or after January 1, 
2015.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 1 is amended as follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority:  26 U.S.C. 7805 * * *


0
Par. 2. In Sec.  1.67-4, paragraph (d) is revised read as follows:


Sec.  1.67-4  Costs paid or incurred by estates or non-grantor trusts.

* * * * *
    (d) Effective/applicability date. This section applies to taxable 
years beginning after December 31, 2014.

Martin V. Franks,
Branch Chief, Publications & Regulations Branch, Legal Processing 
Division, Associate Chief Counsel, (Procedure & Administration).
[FR Doc. 2014-16834 Filed 7-16-14; 8:45 am]
BILLING CODE 4830-01-P