CLARIFICATIONS WITH RESPECT TO FOREIGN TRUSTS WHICH ARE TREATED AS HAVING A UNITED STATES BENEFICIARY.

SEC. 531. CLARIFICATIONS WITH RESPECT TO FOREIGN TRUSTS WHICH ARE TREATED AS HAVING A UNITED STATES BENEFICIARY.(a) In General.—Paragraph (1) of section 679(c) is amended by adding at the end the following:“For purposes of subparagraph (A), an amount shall be treated as accumulated for the benefit of a United States person even if the United States person’s interest in the trust is contingent on a future event.”.(b) Clarification Regarding Discretion To Identify Beneficiaries.—Subsection (c) of section 679 is amended by adding at the end the following new paragraph:“(4) Special rule in case of discretion to identify beneficiaries.—For purposes of paragraph (1)(A), if any person has the discretion (by authority given in the trust agreement, by power of appointment, or otherwise) of making a distribution from the trust to, or for the benefit of, any person, such trust shall be treated as having a beneficiary who is a United States person unless—“(A) the terms of the trust specifically identify the class of persons to whom such distributions may be made, and“(B) none of those persons are United States persons during the taxable year.”.(c) Clarification That Certain Agreements and Understandings Are Terms of the Trust.—Subsection (c) of section 679, as amended by subsection (b), is amended by adding at the end the following new paragraph:“(5) Certain agreements and understandings treated as terms of the trust.—For purposes of paragraph (1)(A), if any United States person who directly or indirectly transfers property to the trust is directly or indirectly involved in any agreement or understanding (whether written, oral, or otherwise) that may result in the income or corpus of the trust being paid or accumulated to or for the benefit of a United States person, such agreement or understanding shall be treated as a term of the trust.”.