§ 2612. Taxable termination; taxable distribution; direct skip

• (a)
  • (1) For purposes of this chapter, the term “taxable termination” means the termination (by death, lapse of time, release of power, or otherwise) of an interest in property held in a trust unless—
    • (A) immediately after such termination, a non-skip person has an interest in such property, or
    • (B) at no time after such termination may a distribution (including distributions on termination) be made from such trust to a skip person.
  • (2) If, upon the termination of an interest in property held in trust by reason of the death of a lineal descendant of the transferor, a specified portion of the trust’s assets are distributed to 1 or more skip persons (or 1 or more trusts for the exclusive benefit of such persons), such termination shall constitute a taxable termination with respect to such portion of the trust property.
• (b) For purposes of this chapter, the term “taxable distribution” means any distribution from a trust to a skip person (other than a taxable termination or a direct skip).
• (c) For purposes of this chapter—
  • (1) The term “direct skip” means a transfer subject to a tax imposed by chapter 11 or 12 of an interest in property to a skip person.
  • (2) Solely for purposes of determining whether any transfer to a trust is a direct skip, the rules of section 2651(f)(2) shall not apply.