§ 2-3-909 — Treatment and allocation of income

(a) Following the conversion of an income trust to a total
return unitrust or upon creation of a total return unitrust by a
settlor, the trustee:
(i) Shall treat the unitrust amount as net income of
the trust for purposes of determining the amount available, from
time to time, for distribution from the trust; and
(ii) May allocate to trust income for each taxable
year of the trust, or portion thereof:
(A) Net short-term capital gain described in
Internal Revenue Code § 1222(5) for the year, or portion
thereof, but only to the extent that the amount so allocated
together with all other amounts allocated to trust income for
the year, or portion thereof does not exceed the unitrust amount
for the year, a portion thereof; and
(B) Net long-term capital gain described in
Internal Revenue Code § 1222(7) for the year, or portion
thereof, but only to the extent that the amount so allocated
together with all other amounts, including amounts described in
subparagraph (A) of this paragraph, allocated to trust income
for the year, or portion thereof, does not exceed the unitrust
amount for the year, or portion thereof.