Allocation of interest on obligation to pay money to trustee to income; allocation of amount received from disposition of certain obligations to principal; applicability of provisions.
1. 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.
2. A trustee shall allocate to principal an amount received from the sale, redemption or other disposition of an obligation to pay money to him more than 1 year after it is purchased or acquired by him, including an obligation whose purchase price or value when it is acquired is less than its value at maturity. If the obligation matures within 1 year after it is purchased or acquired by the trustee, an amount received in excess of its purchase price or its value when acquired by the trust must be allocated to income.
3. This section does not apply to an obligation to which NRS 164.865, 164.870, 164.875, 164.880, 164.890 or 164.895 applies.
Last modified: February 25, 2006