§ 30-2-14-21 — Income receipts and disbursements

(a) A trustee shall allocate an income receipt
or disbursement other than one to which section 18(a)(1) of this chapter
applies to principal if its due date occurs before:
(1) an individual dies in the case of an estate; or
(2) an income interest begins in the case of a trust or successive
income interest.
(b) A trustee shall allocate an income receipt or disbursement to
income if its due date occurs on or after the date on which an individual
dies or an income interest begins and it is a periodic due date. An
income receipt or disbursement must be treated as accruing from day
to day if its due date is not periodic or it has no due date. The portion
of the receipt or disbursement accruing before the date on which an
individual dies or an income interest begins must be allocated to
principal, and the balance must be allocated to income.
(c) An item of income or an obligation is due on the date the payer
is required to make a payment. If a payment date is not stated, there is
no due date for the purposes of this chapter. Distributions to
shareholders or other owners from an entity to which section 23 of this
chapter applies are considered to be due on:
(1) the date fixed by the entity for determining who is entitled to
receive the distribution; or
(2) if no date is fixed, the declaration date for the distribution.
A due date is periodic for receipts or disbursements that must be paid
at regular intervals under a lease or an obligation to pay interest or if an
entity customarily makes distributions at regular intervals.
(d) This section applies only for purposes of determining which
income receipts and disbursements of a trust are to be taken into
account in determining the net income of the trust for the period after
the beginning and before the end of a beneficiary's income interest.
Although this section provides for certain income receipts and
disbursements to be allocated to principal, this section does not control
the initial classification of receipts and disbursements as between
principal and income. Amounts received by a trust from a decedent's
estate or another trust as a distribution of principal may be allocable to
principal under section 24 of this chapter, even to the extent the
amounts received include income receipts of the distributing estate or
trust received or accrued after the beneficiary's income interest begins.

Legislative History

As added by P.L.84-2002, SEC.2. Amended by P.L.51-2014, SEC.16.