Receipts and property allocated to principal
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
beneficiary;
(2) money or other property received from the sale, exchange,
liquidation, or change in form of a principal asset, including
realized profit, subject to sections 23 through 37 of this chapter;
(3) amounts recovered from third parties to reimburse the trust
because of disbursements described in section 39(a)(7) of this
chapter or for other reasons to the extent not based on the loss
of income;
(4) proceeds of property taken by eminent domain, but a
separate award made for the loss of income with respect to an
accounting period during which a current income beneficiary
had a mandatory income interest is income;
(5) net income received in an accounting period during which
there is no beneficiary to whom a trustee may or must distribute
income; and
(6) other receipts as provided in sections 30 through 37 of this
chapter.
As added by P.L.84-2002, SEC.2.
Last modified: May 27, 2006