§ 37A-5-505. Income taxes. - North Carolina Statutes

§ 37A‑5‑505. Income taxes.

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

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

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

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

(2)        From principal tothe extent that:

a.         Receipts from theentity are allocated to principal; and

b.         The trust's share ofthe entity's taxable income exceeds the total receipts described in subdivision(1) and sub‑subdivision (2)a. of this subsection.

(d)        For purposes ofthis section, receipts allocated to principal or income shall be reduced by theamount distributed to a beneficiary from principal or income for which thetrust receives a deduction in calculating the tax. (2003‑232, s. 2.)