§ 37A-4-412. Timber. - North Carolina Statutes

§ 37A‑4‑412. Timber.

(a)        To the extent thata trustee accounts for receipts from the sale of timber and related productspursuant to this section, the trustee shall allocate the net receipts:

(1)        To income to theextent that the amount of timber removed from the land does not exceed the rateof growth of the timber during the accounting periods in which a beneficiaryhas a mandatory income interest;

(2)        To principal to theextent that the amount of timber removed from the land exceeds the rate ofgrowth of the timber or the net receipts are from the sale of standing timber;

(3)        To or between incomeand principal if the net receipts are from the lease of timberland or from acontract to cut timber from land owned by a trust, by determining the amount oftimber removed from the land under the lease or contract and applying the rulesin subdivisions (1) and (2) of this subsection; or

(4)        To principal to theextent that advance payments, bonuses, and other payments are not allocatedpursuant to subdivision (1), (2), or (3) of this subsection.

(b)        In determining netreceipts to be allocated pursuant to subsection (a) of this section, a trusteeshall deduct and transfer to principal a reasonable amount for depletion.

(c)        This Chapterapplies whether or not a decedent or transferor was harvesting timber from theproperty before it becomes subject to the trust.

(d)        If a trust owns aninterest in timberland on January 1, 2004, the trustee may allocate netreceipts from the sale of timber and related products as provided in thisChapter or in the manner used by the trustee before January 1, 2004. If thetrust acquires an interest in timberland after January 1, 2004, the trusteeshall allocate net receipts from the sale of timber and related products asprovided in this Chapter. (2003‑232, s. 2.)