Section 469.423

Title XXXI TRUSTS AND ESTATES OF DECEDENTS AND PERSONS UNDER DISABILITY

Chapter 469

Effective - 28 Aug 2004, 2 histories   

  469.423.  Allocations by trustee — entity defined. — 1.  For purposes of this section, the term "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 469.425 applies, a business or activity to which section 469.427 applies, or an asset-backed security to which section 469.449 applies.

  2.  Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity.

  3.  A trustee shall allocate the following receipts from an entity to principal:

  (1)  Property other than money;

  (2)  Money received in one 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.

  4.  Money is received in partial liquidation:

  (1)  To the extent that the entity, at or near the time of a distribution, indicates that such money 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 is greater than twenty percent of the entity's gross assets, as shown by the entity's year-end financial statements immediately preceding the initial receipt.

  5.  Money is not received in partial liquidation, nor may it be taken into account pursuant to subdivision (2) of subsection 4 of this section, to the extent that such money does not exceed the amount of income tax that a trustee or beneficiary shall pay on taxable income of the entity that distributes the money.

  6.  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.

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(L. 2001 H.B. 241, A.L. 2004 H.B. 1511)