§ 30-2-14-23 — Receipts from an entity

Indiana § 30-2-14-23

• Jurisdiction: Indiana
• Art. 2: GENERAL PROVISIONS
• Ch. 14: Uniform Principal and Income Act

Text

(a) As used in this section, "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. The term
does not include the following:
(1) A trust or an estate to which section 24 of this chapter applies.
(2) A business or an activity to which section 25 of this chapter
applies.
(3) An asset backed security to which section 37 of this chapter
applies.
(b) Except as otherwise provided in this section, a trustee shall
allocate to income money received from an entity.
(c) A trustee shall allocate the following receipts from an entity to
principal:
(1) Property other than money.
(2) Money received in one (1) 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.
(4) Money received from an entity that is:
(A) a regulated investment company; or
(B) a real estate investment trust;
if the money distributed is a capital gain dividend for federal
income tax purposes.
(d) Money is received in partial liquidation:
(1) to the extent that the entity, at or near the time of a
distribution, indicates that it 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 (20%) of the entity's gross assets, as shown by the entity's
year-end financial statements immediately preceding the initial
receipt.
(e) Money is not received in partial liquidation, nor may it be taken
into account under subsection (d)(2), to the extent that it does not
exceed the amount of income tax that a trustee or beneficiary must pay
on taxable income of the entity that distributes the money.
(f) 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:
(1) the entity's board of directors; or
(2) a 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.

Legislative History

As added by P.L.84-2002, SEC.2.