2022 Oklahoma Statutes
Title 60. Property
§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 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.