469.461. Adjustments between principal and income, when--estate tax marital deduction or charitable contributions, how handled. - Missouri Statutes

Adjustments between principal and income, when--estate tax maritaldeduction or charitable contributions, how handled.

469.461. 1. A fiduciary may make adjustments between principal andincome to offset the shifting of economic interests or tax benefits betweenincome beneficiaries and remainder beneficiaries which arise from:

(1) Elections and decisions, other than those described in subsection2 of this section, that the fiduciary makes from time to time regarding taxmatters;

(2) An income tax or any other tax that is imposed upon the fiduciaryor a beneficiary as a result of a transaction involving or a distributionfrom the estate or trust; or

(3) The ownership by an estate or trust of an interest in an entitywhose taxable income, whether or not distributed, is includable in thetaxable income of the estate, trust or a beneficiary.

2. If the amount of an estate tax marital deduction or charitablecontribution deduction is reduced because a fiduciary deducts an amountpaid from principal for income tax purposes instead of deducting it forestate tax purposes, and as a result estate taxes paid from principal areincreased and income taxes paid by an estate, trust or beneficiary aredecreased, each estate, trust or beneficiary that benefits from thedecrease in income tax shall reimburse the principal from which theincrease in estate tax is paid. The total reimbursement shall equal theincrease in the estate tax to the extent that the principal used to pay theincrease would have qualified for a marital deduction or charitablecontribution deduction but for the payment. The proportionate share of thereimbursement for each estate, trust or beneficiary whose income taxes arereduced shall be the same as its proportionate share of the total decreasein income tax. An estate or trust shall reimburse principal from income.

(L. 2001 H.B. 241)