Nature of Total Return Distributions

Sec. 712.0357. NATURE OF TOTAL RETURN DISTRIBUTIONS. (a) A distribution from a total return fund is considered a distribution of all income of the fund that reasonably apportions the total return of the fund, and may not be considered a fundamental departure from applicable state law. (b) Unless the trust instrument provides otherwise, the trustee of a total return fund shall treat a distribution as first being made from the following sources in order of priority: (1) from net accounting income; (2) from ordinary accounting income not allocable to net accounting income; (3) from net realized short-term capital gains; (4) from net realized long-term capital gains; and (5) from the principal of the fund. Added by Acts 2017, 85th Leg., R.S., Ch. 1051 (H.B. 1948), Sec. 1, eff. September 1, 2017. SUBCHAPTER C. REGULATION AND ENFORCEMENT