Part 5.--ALLOCATION OF DISBURSEMENTS DURING ADMINISTRATION OF TRUST
Article 9.--UNIFORM PRINCIPAL AND INCOME ACT (1997)
58-9-506.Adjustments between principal and incomebecause of taxes.(a) A fiduciary may make adjustments between principal andincome tooffset the shifting of economic interests or tax benefits between incomebeneficiaries and remainder beneficiaries which arise from:
(1) Elections and decisions, other than those described in subsection(b),that the fiduciary makes from time to time regarding tax matters;
(2) an income tax or any other tax that is imposed upon the fiduciary ora beneficiary as a result of a transaction involving or a distribution from theestateor trust; or
(3) the ownership by an estate or trust of an interest in an entity whosetaxable income, whether or not distributed, is includable in the taxable incomeofthe estate, trust, or a beneficiary.
(b) If the amount of an estate tax marital deduction or charitablecontribution deduction is reduced because a fiduciary deducts an amount paidfromprincipal for income tax purposes instead of deducting it for estate taxpurposes,and as a result estate taxes paid from principal are increased and income taxespaidby an estate, trust, or beneficiary are decreased, each estate, trust, orbeneficiary thatbenefits from the decrease in income tax shall reimburse the principal fromwhichthe increase in estate tax is paid. The total reimbursement must equal theincreasein the estate tax to the extent that the principal used to pay the increasewould havequalified for a marital deduction or charitable contribution deduction but forthepayment. The proportionate share of the reimbursement for each estate, trust,orbeneficiary whose income taxes are reduced must be the same as itsproportionateshare of the total decrease in income tax. An estate or trust shall reimburseprincipal from income.
Part 5.--ALLOCATION OF DISBURSEMENTS DURING ADMINISTRATION OF TRUST
Article 9.--UNIFORM PRINCIPAL AND INCOME ACT (1997)
58-9-506.Adjustments between principal and incomebecause of taxes.(a) A fiduciary may make adjustments between principal andincome tooffset the shifting of economic interests or tax benefits between incomebeneficiaries and remainder beneficiaries which arise from:
(1) Elections and decisions, other than those described in subsection(b),that the fiduciary makes from time to time regarding tax matters;
(2) an income tax or any other tax that is imposed upon the fiduciary ora beneficiary as a result of a transaction involving or a distribution from theestateor trust; or
(3) the ownership by an estate or trust of an interest in an entity whosetaxable income, whether or not distributed, is includable in the taxable incomeofthe estate, trust, or a beneficiary.
(b) If the amount of an estate tax marital deduction or charitablecontribution deduction is reduced because a fiduciary deducts an amount paidfromprincipal for income tax purposes instead of deducting it for estate taxpurposes,and as a result estate taxes paid from principal are increased and income taxespaidby an estate, trust, or beneficiary are decreased, each estate, trust, orbeneficiary thatbenefits from the decrease in income tax shall reimburse the principal fromwhichthe increase in estate tax is paid. The total reimbursement must equal theincreasein the estate tax to the extent that the principal used to pay the increasewould havequalified for a marital deduction or charitable contribution deduction but forthepayment. The proportionate share of the reimbursement for each estate, trust,orbeneficiary whose income taxes are reduced must be the same as itsproportionateshare of the total decrease in income tax. An estate or trust shall reimburseprincipal from income.
Part 5.--ALLOCATION OF DISBURSEMENTS DURING ADMINISTRATION OF TRUST
Article 9.--UNIFORM PRINCIPAL AND INCOME ACT (1997)
58-9-506.Adjustments between principal and incomebecause of taxes.(a) A fiduciary may make adjustments between principal andincome tooffset the shifting of economic interests or tax benefits between incomebeneficiaries and remainder beneficiaries which arise from:
(1) Elections and decisions, other than those described in subsection(b),that the fiduciary makes from time to time regarding tax matters;
(2) an income tax or any other tax that is imposed upon the fiduciary ora beneficiary as a result of a transaction involving or a distribution from theestateor trust; or
(3) the ownership by an estate or trust of an interest in an entity whosetaxable income, whether or not distributed, is includable in the taxable incomeofthe estate, trust, or a beneficiary.
(b) If the amount of an estate tax marital deduction or charitablecontribution deduction is reduced because a fiduciary deducts an amount paidfromprincipal for income tax purposes instead of deducting it for estate taxpurposes,and as a result estate taxes paid from principal are increased and income taxespaidby an estate, trust, or beneficiary are decreased, each estate, trust, orbeneficiary thatbenefits from the decrease in income tax shall reimburse the principal fromwhichthe increase in estate tax is paid. The total reimbursement must equal theincreasein the estate tax to the extent that the principal used to pay the increasewould havequalified for a marital deduction or charitable contribution deduction but forthepayment. The proportionate share of the reimbursement for each estate, trust,orbeneficiary whose income taxes are reduced must be the same as itsproportionateshare of the total decrease in income tax. An estate or trust shall reimburseprincipal from income.
