Section 11.104A.290. Income taxes.

(1) A tax required to be paid by a trustee based on receipts allocated to income must be charged to income.

(2) A tax required to be paid by a trustee based on receipts allocated to principal must be charged to principal, even if the tax is called an income tax by the taxing authority.

(3) A tax required to be paid by a trustee on the trust's share of an entity's taxable income must be charged:

(a) To income to the extent that receipts from the entity are allocated only to income;

(b) To principal to the extent that receipts from the entity are allocated only to principal;

(c) Proportionately to income and principal to the extent that receipts from the entity are allocated to both income and principal;

(d) Otherwise to principal.

(4) Before applying subsections (1) through (3) of this section, the trustee must adjust income or principal receipts by the distributions to a beneficiary for which the trust receives an income tax deduction.

[ 2011 c 33 § 1; 2002 c 345 § 505.]

2011 c 33 § 1; 2002 c 345 § 505.