§ 637.403 — Business and other activities conducted by trustee

Iowa § 637.403

• Jurisdiction: Iowa
• Title XV: JUDICIAL BRANCH AND JUDICIAL PROCEDURES
• Ch. 637: UNIFORM PRINCIPAL AND INCOME ACT

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2. Except as otherwise provided in this section, cash received by a trustee from an entity
must be allocated to income.
3. Receiptsfromanentitywhichmustbeallocatedtoprincipalincludethefollowingitems:
a. Property other than cash, except as otherwise provided in paragraph “d”.
b. Cash or property received in one distribution or a series of related distributions in
exchange for part or all of a trust’s interest in the entity.
c. Cash or property received in total or partial liquidation of the entity.
d. Cash or property received from an entity that is a regulated investment company or a
real estate investment trust if the distribution is a capital gain dividend for federal income tax
purposes.
4. Cash or property is received in partial liquidation according to one of the following
principles:
a. To the extent that the entity, at or near the time of a distribution, indicates that it is a
distribution in partial liquidation.
b. If the total amount 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. Cash shall not be received in partial liquidation, nor shall it be taken into account under
subsection 4, paragraph “b”, to the extent that it does not exceed the amount of income tax
thatatrusteeorbeneficiarymustpayontaxableincomeoftheentitythatdistributesthecash.
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.