Sec. 42. (a) A tax required to be paid by a
trustee based on receipts allocated to
income must be paid from income.
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Terms Used In Indiana Code 30-2-14-42
- income: means money or property that a fiduciary receives as current return from a principal asset. See Indiana Code 30-2-14-4
- principal: means property that is held in trust for distribution to a remainder beneficiary when the trust terminates or that will remain perpetually vested in the trustee. See Indiana Code 30-2-14-10
- Trustee: A person or institution holding and administering property in trust.
- trustee: includes an original, additional, or successor trustee, whether or not appointed or confirmed by a court. See Indiana Code 30-2-14-13
(c) A tax required to be paid by a trustee on the trust’s share of an entity’s taxable income must be paid:
(1) from income to the extent that receipts from the entity are allocated to income;
(2) from principal to the extent that receipts from the entity are allocated only to principal;
(3) proportionately from principal and income to the extent that receipts from the entity are allocated to both income and principal; and
(4) from principal to the extent that the tax exceeds the total receipts from the entity.
(d) After applying subsections (a) through (c), the trustee shall adjust income or principal receipts to the extent that the trust’s taxes are reduced because the trust receives a deduction for payments made to a beneficiary.
As added by P.L.84-2002, SEC.2. Amended by P.L.143-2009, SEC.20.
