South Dakota Codified Laws 55-13-7. Increase in value of certain trust investments distributable as income
(a) Unless otherwise provided in the trust instrument, an increase in the value of the following investments owned by any trust is distributable as income when it becomes available for distribution:
(1) A zero coupon bond;
Terms Used In South Dakota Codified Laws 55-13-7
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Contract: A legal written agreement that becomes binding when signed.
- Income beneficiary: means the person to whom income is presently payable or for whom it is accumulated for distribution as income. See South Dakota Codified Laws 55-13-1
- 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.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
(2) An annuity contract before annuitization;
(3) A life insurance contract before the death of the insured;
(4) An interest in a common trust fund (as defined under § 584 of the Internal Revenue Code) (26 U.S.C. § 584);
(5) An interest in a partnership, as defined in § 7701 of the Internal Revenue Code (26 U.S.C. § 7701); or
(6) Any other obligation for the payment of money that is payable at a future time in accordance with a fixed, variable, or discretionary schedule of appreciation in excess of the price at which it was issued.
(b) For purposes of this section, the increase in value of an investment described in subsection (a) is available for distribution only if the trustee receives cash on account of the investment.
(c) The increase in value of the obligations described in subsection (a) is distributable to the beneficiary who was the income beneficiary at the time of the increase from the first principal cash available or, if none is available, when realized by sale, redemption, or other disposition. If unrealized increase is distributed as income but out of principal, the principal shall be reimbursed from the increase when realized.
Source: SL 1984, ch 323, § 7; SL 1995, ch 272, § 1; SL 2002, ch 100, § 25.