### Question
How is the term common trust fund defined?


### Answer
The term **common trust fund** is defined in *26 U.S.C. § 584* as the following:

> a fund maintained by a bank—


(1) exclusively for the collective investment and reinvestment of moneys contributed thereto by the bank in its capacity—


(A) as a trustee, executor, administrator, or guardian, or


(B) as a custodian of accounts—


(i) which the Secretary determines are established pursuant to a State law which is substantially similar to the Uniform Gifts to Minors Act as published by the American Law Institute, and


(ii) with respect to which the bank establishes, to the satisfaction of the Secretary, that it has duties and responsibilities similar to duties and responsibilities of a trustee or guardian

#### Citation:
  - *26 U.S.C. § 584*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter H-Banking Institutions > PART I-RULES OF GENERAL APPLICATION TO BANKING INSTITUTIONS**

