§ 637.424 — Timber

Iowa § 637.424

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

Text

1. A trustee may account for net receipts from the sale of timber and related products
under subsection 2 or section 637.403 or, if the trustee determines that net receipts are
insubstantial, may allocate the net receipts to principal. The presumptions in section 637.420
apply in determining whether net receipts are insubstantial. If a trust owns more than one
block of timberland, the trustee may use different methods to account for net receipts from
different blocks.
2. If a trustee does not account under section 637.403 for net receipts from the sale
of timber and related products or allocate the net receipts to principal because they are
insubstantial,thetrusteeshallallocatethenetreceiptsaccordingtooneofthefollowingrules:
a. Allocate the net receipts to income to the extent that the amount of timber removed
fromthelanddoesnotexceedtherateofgrowthoftheblockasawholeduringtheaccounting
periods in which a beneficiary has a mandatory income interest.
b. Allocate the net receipts to principal to the extent that the amount of timber removed
from the land exceeds the block’s rate of growth or the net receipts are from the sale of
standing timber.
c. Allocate the net receipts to or between income and principal if the net receipts are
from the lease of timberland or from a contract to cut timber from land owned by a trust,
by determining the amount of timber removed from the land under the lease or contract and
applying the rules in paragraphs “a” and “b”.

d. Allocate the net receipts to principal to the extent that advance payments, bonuses, and
other payments are not allocated pursuant to paragraph “a”, “b”, or “c”.
3. In determining the net receipts from the sale of timber, a trustee shall deduct and
transfer to principal a reasonable amount for depletion.
4. This chapter applies regardless of whether a decedent or transferor was harvesting
timber from the property before it became subject to the trust.
5. If a trust owns an interest in timberland on or before July 1, 2000, the trustee may
allocate net receipts from the sale of timber and related products as provided in this section
or in the manner used by the trustee before July 1, 2000. If the trust acquires an interest in
timberland after July 1, 2000, the trustee shall allocate net receipts from the sale of timber
and related products as provided in this section.