Source: https://www.govinfo.gov/content/pkg/CFR-2025-title26-vol14/pdf/CFR-2025-title26-vol14-sec1-1411-10.pdf#page=6
Pages 6-6, text extracted with pdftotext (poppler), reading order.

§ 1.1411–10

26 CFR Ch. I (4–1–25 Edition)

regulations thereunder, the term modified adjusted gross income means modified adjusted gross income as defined in
§ 1.1411–2(c)(1)—
(i) Increased by amounts included in
net investment income under paragraphs (c)(1)(i), (c)(1)(ii), (c)(2)(i), and
(c)(4) of this section that are not otherwise included in gross income for chapter 1 purposes;
(ii) Increased or decreased, as applicable, by the difference between the
amount calculated with respect to a
disposition under paragraphs (c)(2)(iii)
and (iv) of this section and the amount
of the gain or loss attributable to the
relevant disposition as calculated for
chapter 1 purposes;
(iii) Decreased by any amount included in gross income for chapter 1
purposes under section 951(a) or section
1293(a) attributable to a CFC or QEF
with respect to which no election under
paragraph (g) of this section is in effect; and
(iv) To the extent the section
163(d)(1) investment interest expense
deduction is calculated using the method of calculation set forth in paragraph
(c)(5) of this section and the deduction
is taken into account under § 1.1411–
4(f)(2), increased or decreased, as appropriate, by the difference between the
amount of the section 163(d)(1) investment interest expense deduction calculated under paragraph (c)(5) of this
section and the amount calculated for
chapter 1 purposes.
(2) Estates and trusts. Solely for purposes of section 1411(a)(2)(B)(i) and the
regulations thereunder, the term adjusted gross income means adjusted
gross income as defined in § 1.1411–
3(a)(1)(ii)(B)(1) adjusted by the following amounts to the extent those
amounts are not distributed by the estate or trust—
(i) Increased by amounts included in
net investment income under paragraphs (c)(1)(i), (c)(1)(ii), (c)(2)(i), and
(c)(4) of this section that are not otherwise included in gross income for chapter 1 purposes;
(ii) Increased or decreased, as applicable, by the difference between the
amount calculated with respect to a
disposition under paragraphs (c)(2)(iii)
and (iv) of this section and the amount
of the gain or loss attributable to the

relevant disposition as calculated for
chapter 1 purposes;
(iii) Decreased by any amount included in gross income for chapter 1
purposes under section 951(a) or section
1293(a) attributable to a CFC or QEF
with respect to which no election under
paragraph (g) of this section is in effect; and
(iv) To the extent the section
163(d)(1) investment interest expense
deduction is calculated using the method of calculation set forth in paragraph
(c)(5) of this section and taken into account under § 1.1411–4(f)(2), increased or
decreased, as appropriate, by the difference between the amount of the section 163(d)(1) investment interest expense deduction calculated under paragraph (c)(5) of this section and the
amount calculated for chapter 1 purposes.
(f) Application to estates and trusts. All
of the items described in paragraph (c)
of this section are included in the net
investment income of an estate or
trust or its beneficiaries. The amounts
described
in
paragraphs
(e)(2)(i)
through (iv) of this section, regardless
of whether the estate or trust receives
those amounts directly or indirectly
through another estate or trust, increase or decrease, as applicable, the
estate’s or trust’s distributable net income for purposes of section 1411. The
estate or trust, or the beneficiaries
thereof, must take those amounts into
account in a manner reasonably consistent with the general operating
rules for estates and trusts in § 1.1411–3
and subchapter J in computing the undistributed net investment income of
the estate or trust and the net investment income of the beneficiaries.
(g) Election with respect to CFCs and
QEFs—(1) Effect of election. If an election under paragraph (g) of this section
is made with respect to a CFC or QEF,
amounts included in gross income for
chapter 1 purposes under section 951(a)
or section 1293(a)(1)(A) with respect to
the CFC or QEF in taxable years beginning with the taxable year for which
the election is made are treated as net
investment income for purposes of
§ 1.1411–4(a)(1)(i), and amounts included
in
gross
income
under
section
1293(a)(1)(B) with respect to the QEF in

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