Sec. 26. A trustee shall allocate to principal: (1) to the extent not allocated to income under this chapter, assets received from: (A) a transferor during the transferor’s lifetime; (B) a decedent’s estate; (C) a trust with a terminating income interest; or (D) a payer under a contract naming the trust or its trustee as […]
Sec. 27. To the extent that a trustee accounts for receipts from rental property under this section, the trustee shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit […]
Sec. 28. (a) An amount received as interest, whether determined at a fixed, variable, or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, must be allocated to income without any provision for amortization of premium. (b) A trustee shall allocate to principal an […]
Sec. 29. (a) Except as otherwise provided in subsection (b), a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the trust or its trustee against loss for damage to, destruction of, or […]
Sec. 3. As used in this chapter, “fiduciary” means the following: (1) A personal representative, including an executor, an administrator, a successor personal representative, a special administrator, or a person performing substantially the same function with respect to a decedent’s estate that meets the requirements of section 13.5 of this chapter. (2) A trustee. As […]
Sec. 30. If a trustee determines that an allocation between principal and income required by section 31, 32, 33, 34, or 37 of this chapter is insubstantial, the trustee may allocate the entire amount to principal unless one (1) of the circumstances described in section 15(c) of this chapter applies to the allocation. This power […]
Sec. 31. (a) This section does not apply to a payment to which section 32 of this chapter applies. (b) As used in this section, “payment” means a payment that a trustee may receive over a fixed number of years or during the life of one (1) or more individuals because of services rendered or […]
Sec. 32. (a) As used in this section, “liquidating asset” means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes a leasehold, patent, copyright, royalty right, and right to receive payments during a period of more than one (1) […]
Sec. 33. (a) To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources under this section, the trustee shall allocate them as follows: (1) If received as nominal delay rental or nominal annual rent on a lease, a receipt must be allocated to income. (2) If received […]
Sec. 34. (a) To the extent that a trustee accounts for receipts from the sale of timber and related products under this section, the trustee shall allocate the net receipts: (1) to income to the extent that the amount of timber removed from the land does not exceed the rate of growth of the timber […]
Sec. 35. (a) If: (1) a marital deduction is allowed for all or part of a trust whose assets consist substantially of property that does not provide the spouse with sufficient income from or use of the trust assets; and (2) the amounts that the trustee transfers from principal to income under section 15 of […]
Sec. 36. (a) As used in this section, “derivative” means a contract or financial instrument or a combination of contracts and financial instruments that gives a trust the right or obligation to participate in: (1) some or all changes in the price of a tangible or intangible asset or group of assets; or (2) changes […]
Sec. 37. (a) As used in this section, “asset backed security” means an asset whose value is based upon the right it gives the owner to receive distributions from the proceeds of financial assets that provide collateral for the security. The term includes an asset that gives the owner the right to receive from the […]
Sec. 38. A trustee shall make the following disbursements from income to the extent that they are not disbursements to which section 18(a)(2)(B) or 18(a)(2)(C) of this chapter applies: (1) one-half (1/2) of the regular compensation of the trustee and of any person providing investment advisory or custodial services to the trustee; (2) one-half (1/2) […]
Sec. 39. (a) A trustee shall make the following disbursements from principal: (1) the remaining one-half (1/2) of the disbursements described in section 38(1) and 38(2) of this chapter; (2) all of the trustee’s compensation calculated on principal as a fee for acceptance, distribution, or termination, and disbursements made to prepare property for sale; (3) […]
Sec. 4. As used in this chapter, “income” means money or property that a fiduciary receives as current return from a principal asset. The term includes a portion of receipts from a sale, exchange, or liquidation of a principal asset, to the extent provided in sections 21 through 35 of this chapter. As added by […]
Sec. 40. (a) As used in this section, “depreciation” means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a fixed asset having a useful life of more than one (1) year. (b) A trustee may transfer to principal a reasonable amount of the net cash receipts from a principal […]
Sec. 41. (a) If a trustee makes or expects to make a principal disbursement described in this section, the trustee may transfer an appropriate amount from income to principal in one (1) or more accounting periods to reimburse principal or to provide a reserve for future principal disbursements. (b) Principal disbursements to which subsection (a) […]
Sec. 42. (a) A tax required to be paid by a trustee based on receipts allocated to income must be paid from income. (b) A tax required to be paid by a trustee based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the […]
Sec. 43. (a) A fiduciary may make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder beneficiaries that arise from: (1) elections and decisions, other than those described in subsection (b), that the fiduciary makes from time to time regarding tax matters; (2) an […]
