1.679-1—U.S. transferor treated as owner of foreign trust.
(a) In general.
A U.S. transferor who transfers property to a foreign trust is treated as the owner of the portion of the trust attributable to the property transferred if there is a U.S. beneficiary of any portion of the trust, unless an exception in § 1.679-4 applies to the transfer.
(b) Interaction with
The rules of this section apply without regard to whether the U.S. transferor retains any power or interest described in sections 673 through 677. If a U.S. transferor would be treated as the owner of a portion of a foreign trust pursuant to the rules of this section and another person would be treated as the owner of the same portion of the trust pursuant to section 678, then the U.S. transferor is treated as the owner and the other person is not treated as the owner.
(c) Definitions.
The following definitions apply for purposes of this section and §§ 1.679-2 through 1.679-7:
(1) U.S. transferor.
The term U.S. transferor means any U.S. person who makes a transfer (as defined in § 1.679-3) of property to a foreign trust.
(2) U.S. person.
The term U.S. person means a United States person as defined in section 7701(a)(30), a nonresident alien individual who elects under section 6013(g) to be treated as a resident of the United States, and an individual who is a dual resident taxpayer within the meaning of § 301.7701(b)-7(a) of this chapter.
(3) Foreign trust.
Section 7701(a)(31)(B) defines the term foreign trust. See also § 301.7701-7 of this chapter.
(5) Related person.
A person is a related person if, without regard to the transfer at issue, the person is—
(iv)
A person who is related (within the meaning of section 643(i)(2)(B)) to any grantor, owner or beneficiary of the trust.
(6) Obligation.
The term obligation means any bond, note, debenture, certificate, bill receivable, account receivable, note receivable, open account, or other evidence of indebtedness, and, to the extent not previously described, any annuity contract.
(d) Examples.
The following examples illustrate the rules of paragraph (a) of this section. In these examples, A is a resident alien, B is A 's son, who is a resident alien, C is A 's father, who is a resident alien, D is A 's uncle, who is a nonresident alien, and FT is a foreign trust. The examples are as follows: