1993 Alaska Statutes
TITLE 13 DECEDENTS' ESTATES, GUARDIANSHIPS AND TRUSTS
Chapter 13.38 PRINCIPAL AND INCOME OF TRUSTS
Section 13.38.110 UNDERPRODUCTIVE PROPERTY.

(a) Except as otherwise provided in this section, a portion of the net proceeds of sale of any part of principal that has not produced an average net income of at least one percent per year of its inventory value for more than a year, including as income the value of a beneficial use of the property by the income beneficiary, shall be treated as delayed income to which the income beneficiary is entitled as provided in this section. The net proceeds of sale are the gross proceeds received, including the value of any property received in substitution for the property disposed of, less the expenses, including taxes, if any, incurred in disposition and less any carrying charges paid while the property was underproductive.

(b) The sum allocated as delayed income is the difference between the net proceeds and the amount that, had it been invested at simple interest at four percent per year while the property was underproductive, would have produced the net proceeds. This sum, plus any carrying charges and expenses previously charged against income while the property was underproductive, less any income received by the income beneficiary from the property and less the value of any beneficial use of the property by the income beneficiary, is income, and the balance is principal.

(c) An income beneficiary or the estate of the income beneficiary is entitled to delayed income under this section as if it accrued from day to day during the time the person was a beneficiary.

(d) If principal subject to this section is disposed of by conversion into property that cannot be apportioned easily, including land or mortgages, such as realty acquired by or in lieu of foreclosure, the income beneficiary is entitled to the net income from any property or obligation into which the original principal is converted while the substituted property or obligation is held.