Oklahoma § 60-175.718 - Tax-related limitations

§ 60-175.718. Tax-related limitations

TAX-RELATED LIMITATIONS

A. The authorized trustee shall not distribute the principal of

a trust under Section 3 or 4 of this act in a manner that would

prevent a contribution to that trust from qualifying for or that

Oklahoma Statutes - Title 60. Property

would reduce the exclusion, deduction or other federal tax benefit

that was originally claimed for that contribution, including:

1. The annual exclusion under Section 2503(b) of the Internal

Revenue Code of 1986, as amended;

2. A marital deduction under Section 2056(a) or 2523(a) of the

Internal Revenue Code of 1986, as amended;

3. The charitable deduction under Section 170(a), 642(c),

2055(a), or 2522(a) of the Internal Revenue Code of 1986, as

amended;

4. Direct skip treatment under Section 2642(c) of the Internal

Revenue Code of 1986, as amended; or

5. Any other tax benefit for income, gift, estate, or

generation-skipping transfer tax purposes under the Internal Revenue

Code of 1986, as amended.

B. Notwithstanding subsection A of this section, an authorized

trustee may distribute the principal of a first trust to a second

trust regardless of whether the settlor is treated as the owner of

either or both trusts under the Internal Revenue Code, 26 U.S.C.,

Sections 671 through 679, as amended.

C. If S corporation stock is held in trust, an authorized

trustee shall not distribute all or part of that stock under Section

3 or 4 of this act to a second trust that is not a permitted

shareholder under the Internal Revenue Code, 26 U.S.C., Section

1361(c)(2), as amended.

D. If an interest in property that is subject to the minimum

distribution rules of the Internal Revenue Code, 26 U.S.C., Section

401(a)(9), as amended, is held in trust, an authorized trustee shall

not distribute the trust's interest in the property to a second

trust under Section 3 or 4 of this act if the distribution would

shorten the minimum distribution period applicable to the property.

Added by Laws 2021, c. 268, § 18, eff. Nov. 1, 2021.