2005 Arizona Revised Statutes - Revised Statutes §14-7421 Timber
A. To the extent that a trustee accounts for receipts from the sale of timber and related products pursuant to this section, the trustee shall allocate the net receipts:
1. To income to the extent that the amount of timber removed from the land does not exceed the rate of growth of the timber during the accounting periods in which a beneficiary has a mandatory income interest.
2. To principal to the extent that the amount of timber removed from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber.
3. To or between income and principal if the net receipts are from the lease of timberland or from a contract to cut timber from land owned by a trust, by determining the amount of timber removed from the land under the lease or contract and applying paragraphs 1 and 2.
4. To principal to the extent that advance payments, bonuses and other payments are not allocated pursuant to paragraph 1, 2 or 3.
B. In determining net receipts to be allocated pursuant to subsection A, a trustee shall deduct and transfer to principal a reasonable amount for depletion.
C. This article applies whether or not a decedent or transferor was harvesting timber from the property before it became subject to the trust.
D. If a trust owns an interest in timberland on the effective date of this article, the trustee may allocate net receipts from the sale of timber and related products as provided in this article or in the manner used by the trustee before the effective date of this article. If the trust acquires an interest in timberland after the effective date of this article, the trustee shall allocate net receipts from the sale of timber and related products as provided in this article.
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