§ 55-277.29. Income taxes
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 taxing authority.
C. A tax required to be paid by a trustee on the trust's share of an entity's taxable income must be paid proportionately:
1. From income to the extent that receipts from the entity are allocated to income; and
2. From principal to the extent that:
a. Receipts from the entity are allocated to principal; and
b. The trust's share of the entity's taxable income exceeds the total receipts described in subdivisions 1 and 2 a of this section.
D. For purposes of this section, receipts allocated to principal or income must be reduced by the amount distributed to a beneficiary from principal or income for which the trust receives a deduction in calculating the tax.
(1999, c. 975.)
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