2014 Kentucky Revised Statutes CHAPTER 386 - ADMINISTRATION OF TRUSTS -- LEGAL INVESTMENTS -- UNIFORM PRINCIPAL AND INCOME ACT 386.486 Receipts from timber.
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386.486 Receipts from timber.
(1)
(2)
(3)
(4)
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:
(a) 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;
(b) 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;
(c) 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 the rules in paragraphs (a) and (b) of this
subsection; or
(d) To principal to the extent that advance payments, bonuses, and other
payments are not allocated pursuant to paragraphs (a), (b), or (c) of this
subsection.
In determining net receipts allocated under subsection (1) of this section, a
trustee shall deduct and transfer to principal a reasonable amount for
depletion.
KRS 386.450 to 386.504 apply whether or not a decedent or transferor was
harvesting timber from the property before it became subject to the trust.
If a trust owns an interest in timberland on January 1, 2005, the trustee may
allocate net receipts from the sale of timber and related products as provided in
KRS 386.450 to 386.504 or in the manner used by the trustee before January
1, 2005. If the trust acquires an interest in timberland after January 1, 2005, the
trustee shall allocate net receipts from the sale of timber and related products
as provided in KRS 386.450 to 386.504.
Effective:January 1, 2005
History: Created 2004 Ky. Acts ch. 158, sec. 19, effective January 1, 2005.
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