Net receipts from the sale of timber and related products
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
during the accounting periods in which a beneficiary has a
mandatory income interest;
(2) to principal to the extent that the amount of timber removed
from the land exceeds the rate of growth of the timber or the net
receipts are from the sale of standing timber;
(3) to or between income and principal if the net receipts are
from:
(A) the lease of timberland; or
(B) a contract to cut timber from land owned by a trust;
by determining the amount of timber removed from the land
under the lease or contract and applying the rules in
subdivisions (1) and (2); or
(4) to principal to the extent that advance payments, bonuses,
and other payments are not allocated under subdivision (1), (2),
or (3).
(b) In determining net receipts to be allocated under subsection
(a), a trustee shall deduct and transfer to principal a reasonable
amount for depletion.
(c) This chapter applies whether or not a decedent or transferor
was harvesting timber from the property before it became subject to
the trust.
(d) If a trust owns an interest in timberland, the trustee may
allocate net receipts from the sale of timber and related products as
provided in this chapter or in the manner used by the trustee before
January 1, 2003. If the trust acquires an interest in timberland after
December 31, 2002, the trustee shall allocate net receipts from the
sale of timber and related products as provided in this chapter.
As added by P.L.84-2002, SEC.2.
Last modified: May 27, 2006