Montana Code 72-34-438. Interest on obligation to pay money — allocation
72-34-438. Interest on obligation to pay money — allocation. (1) An amount received as interest, whether determined at a fixed, variable, or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, must be allocated to income without any provision for amortization of premium.
Terms Used In Montana Code 72-34-438
- Amortization: Paying off a loan by regular installments.
- Income: means money or property that a fiduciary receives as current return from a principal asset. See Montana Code 72-34-422
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Trustee: A person or institution holding and administering property in trust.
(2)An amount received from the sale, redemption, or other disposition of an obligation to pay money to the trustee more than 1 year after it is purchased or acquired by the trustee, including an obligation whose purchase price or its value when it is otherwise acquired is less than its value at maturity, must be allocated to principal. If the obligation matures within 1 year after it is purchased or acquired by the trustee, an amount received in excess of its purchase price or its value when it is otherwise acquired must be allocated to income.
(3)This section does not apply to an obligation to which 72-34-441, 72-34-442, 72-34-443, 72-34-444, 72-34-446, or 72-34-447 applies.