The portion of the total amount includible in gross income under §1.668 (a)-1 which is includible in the gross income of a particular beneficiary is based upon the ratio determined under the second sentence of section 662(a)(2) for the taxable year (and not for the preceding taxable year). This section may be illustrated by the following example:
(b) For the purposes of determining the amounts includible in the beneficiaries' gross income for 1955, the trust is deemed to have made the following distributions:
Amount distributed out of 1955 income (distributable net income) | $10,000 |
Accumulation distribution deemed distributed by the trust on the last day of 1954 under section 666(a) | 5,000 |
Taxes imposed on the trust deemed distributed under section 666(b) | 1,100 |
(d) B will include in his gross income for 1955 one-third of each item shown in paragraph (b) of this example, computed in the manner shown in paragraph (c) of this example.