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Texas Property Code - PROP § 112.055. Amendment of Charitable Trusts by Operation of Law

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) Except as provided by Section 112.056 and Subsection (b) of this section, the governing instrument of a trust that is a private foundation under Section 509, Internal Revenue Code, as amended, a nonexempt charitable trust that is treated as a private foundation under Section 4947(a)(1), Internal Revenue Code, as amended, or, to the extent that Section 508(e), Internal Revenue Code, is applicable to it, a nonexempt split-interest trust under Section 4947(a)(2), Internal Revenue Code, as amended, is considered to contain provisions stating that the trust:

(1) shall make distributions at times and in a manner as not to subject the trust to tax under Section 4942, Internal Revenue Code;

(2) may not engage in an act of self-dealing that would be subject to tax under Section 4941, Internal Revenue Code;

(3) may not retain excess business holdings that would subject it to tax under Section 4943, Internal Revenue Code;

(4) may not make an investment that would subject it to tax under Section 4944, Internal Revenue Code;  and

(5) may not make a taxable expenditure that would subject it to tax under Section 4945, Internal Revenue Code.

(b) If a trust was created before January 1, 1970, this section applies to it only for its taxable years that begin on or after January 1, 1972.

(c) This section applies regardless of any provision in a trust's governing instrument and regardless of any other law of this state, including the provisions of this title.

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Cite this article: FindLaw.com - Texas Property Code - PROP § 112.055. Amendment of Charitable Trusts by Operation of Law - last updated January 01, 2024 | https://codes.findlaw.com/tx/property-code/prop-sect-112-055/

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