The proposed regulations would amend the definition of income in section 20.2056A-5(c)(2) that applies for purposes of section 2056A(b)(3)(A). Distributions of trust principal from a qualified domestic trust (QDOT), a trust for a non-US spouse that can qualify for the estate tax marital deduction, are subject to US estate tax, but distributions of trust income” are not. Taxpayers are relying on a provision of local law that treats a distribution from an entity to the QDOT as a distribution of income unless the distribution equals or exceeds 20% of the value of the entity or the QDOT’s interest in the entity. The proposed regulations would eliminate the ability to rely on such a state law provision to reduce the US estate tax liability of the QDOT.