55-277.15 - Obligation to pay money. - Virginia Statutes

§ 55-277.15. Obligation to pay money.

A. An amount received as interest, whether determined at a fixed, variable,or floating rate, on an obligation to pay money to the trustee, including anamount received as consideration for prepaying principal, must be allocatedto income without any provision for amortization of premium.

B. A trustee shall allocate to principal an amount received from the sale,redemption, or other disposition of an obligation to pay money to the trusteemore than one year after it is purchased or acquired by the trustee,including an obligation whose purchase price or value when it is acquired isless than its value at maturity. If the obligation matures within one yearafter it is purchased or acquired by the trustee, an amount received inexcess of its purchase price or its value when acquired by the trust must beallocated to income.

C. This section does not apply to an obligation to which §§ 55-277.18,55-277.19, 55-277.20, 55-277.21, 55-277.23, or § 55-277.24 applies.

(1999, c. 975.)