Maryland Estates and Trusts Section 15-527

      (a)      A tax required to be paid by a trustee based on receipts allocated to income shall be paid from income.

      (b)      A tax required to be paid by a trustee based on receipts allocated to principal shall be paid from principal, even if the tax is called an income tax by the taxing authority.

      (c)      A tax required to be paid by a trustee on the trust's share of an entity's taxable income shall be paid proportionately:

            (1)      From income to the extent that receipts from the entity are allocated to income; and

            (2)      From principal to the extent that:

                  (i)      Receipts from the entity are allocated to principal; and

                  (ii)      The trust's share of the entity's taxable income exceeds the total receipts described in paragraphs (1) and (2)(i) of this subsection.

      (d)      For purposes of this section, receipts allocated to principal or income must be reduced by the amount distributed to a beneficiary from principal or income for which the trust receives a deduction in calculating the tax.