§ 37A-4-406. Obligation to pay money. - North Carolina Statutes

§ 37A‑4‑406. Obligation to pay money.

(a)        An amount receivedas interest, whether determined at a fixed, variable, or floating rate, on anobligation to pay money to the trustee, including an amount received asconsideration for prepaying principal, shall be allocated to income without anyprovision for amortization of premium.

(b)        A trustee shallallocate to principal an amount received from the sale, redemption, or otherdisposition of an obligation to pay money to the trustee more than one yearafter it is purchased or acquired by the trustee, including an obligation whosepurchase price or value when it is acquired is less than its value at maturity.If the obligation matures within one year after it is purchased or acquired bythe trustee, an amount received in excess of its purchase price or its valuewhen acquired by the trust shall be allocated to income.

(c)        This section doesnot apply to an obligation to which G.S. 37A‑4‑409, 37A‑4‑410,37A‑4‑411, 37A‑4‑412, 37A‑4‑414, or 37A‑4‑415applies. (2003‑232,s. 2.)