(a) In this section, “entity” means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or any other organization in which a trustee has an interest other than a trust or estate to which Section 91-17-402 applies, a business or activity to which Section 91-17-403 applies, or an asset-backed security to which Section 91-17-415 applies.
(b) Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity.
(c) A trustee shall allocate the following receipts from an entity to principal:(1) Property other than money;(2) Money received in one (1) distribution or a series of related distributions in exchange for part or all of a trust’s interest in the entity;(3) Money received in total or partial liquidation of the entity; and(4) Money received from an entity that is a regulated investment company or a real estate investment trust if the money distributed is a capital gain dividend for federal income tax purposes.
(1) Property other than money;
(2) Money received in one (1) distribution or a series of related distributions in exchange for part or all of a trust’s interest in the entity;
(3) Money received in total or partial liquidation of the entity; and
(4) Money received from an entity that is a regulated investment company or a real estate investment trust if the money distributed is a capital gain dividend for federal income tax purposes.
(d) Money is received in partial liquidation:(1) To the extent that the entity, at or near the time of a distribution, indicates that it is a distribution in partial liquidation; or(2) If the total amount of money and property received in a distribution or series of related distributions by all of the owners, collectively, is greater than twenty percent (20%) of the entity’s total assets, as shown by the entity’s year-end financial statements immediately preceding the initial receipt. “Total assets” means the amount of cash and the aggregate adjusted bases of other property held by the entity.
(1) To the extent that the entity, at or near the time of a distribution, indicates that it is a distribution in partial liquidation; or
(2) If the total amount of money and property received in a distribution or series of related distributions by all of the owners, collectively, is greater than twenty percent (20%) of the entity’s total assets, as shown by the entity’s year-end financial statements immediately preceding the initial receipt. “Total assets” means the amount of cash and the aggregate adjusted bases of other property held by the entity.
(e) If money is received in a partial liquidation under subsection (d)(2) of this section, a portion of the receipt allocated to principal shall be reallocated to income by the trustee to reimburse the trustee or beneficiary for the federal and state income taxes attributable to the receipt.
(f) A trustee may rely upon a statement made by an entity about the source or character of a distribution if the statement is made at or near the time of distribution by the entity’s board of directors or other person or group of persons authorized to exercise powers to pay money or transfer property comparable to those of a corporation’s board of directors.