2010 Pennsylvania Code
Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES
Chapter 81 - Principal and Income
8154 - Derivatives and options.

     § 8154.  Derivatives and options.
        (a)  Derivatives.--To the extent that a trustee does not
     account under section 8143 (relating to business and other
     activities conducted by trustee) for transactions in
     derivatives, the trustee shall allocate to principal receipts
     from and disbursements made in connection with those
     transactions.
        (b)  Options.--If a trustee grants an option to buy property
     from the trust, whether or not the trust owns the property when
     the option is granted, grants an option that permits another
     person to sell property to the trust or acquires an option to
     buy property for the trust or an option to sell an asset owned
     by the trust, and the trustee or other owner of the asset is
     required to deliver the asset if the option is exercised, an
     amount received for granting the option must be allocated to
     principal. An amount paid to acquire the option must be paid
     from principal. A gain or loss realized upon the exercise of an
     option, including an option granted to a settlor or testator of
     the trust for services rendered, must be allocated to principal.
        (c)  Definition.--As used in this section, "derivative" means
     a contract or financial instrument or a combination of contracts
     and financial instruments which gives a trust the right or
     obligation to participate in some or all changes in the price of
     a tangible or intangible asset or group of assets, or changes in
     a rate, an index of prices or rates, or other market indicator
     for an asset or a group of assets.

        Cross References.  Section 8154 is referred to in sections
     8143, 8144, 8146, 8150 of this title.