55-277.21 - Timber. - Virginia Statutes

§ 55-277.21. Timber.

A. To the extent that a trustee accounts for receipts from the sale of timberand related products pursuant to this section, the trustee shall allocate thenet receipts:

1. To income to the extent that the amount of timber removed from the landdoes not exceed the rate of growth of the timber during the accountingperiods in which a beneficiary has a mandatory income interest;

2. To principal to the extent that the amount of timber removed from the landexceeds the rate of growth of the timber or the net receipts are from thesale of standing timber;

3. To or between income and principal if the net receipts are from the leaseof timberland or from a contract to cut timber from land owned by a trust, bydetermining the amount of timber removed from the land under the lease orcontract and applying the rules in subdivision 1 or 2; or

4. To principal to the extent that advance payments, bonuses, and otherpayments are not allocated pursuant to subdivision 1, 2 or 3.

B. In determining net receipts to be allocated pursuant to subsection A, atrustee shall deduct and transfer to principal a reasonable amount fordepletion.

C. This chapter applies whether or not a decedent or transferor washarvesting timber from the property before it became subject to the trust.

D. If a trust owns an interest in timberland on January 1, 2000, the trusteemay allocate net receipts from the sale of timber and related products asprovided in this chapter or in the manner used by the trustee before January1, 2000. If the trust acquires an interest in timberland after January 1,2000, the trustee shall allocate net receipts from the sale of timber andrelated products as provided in this chapter.

(1999, c. 975.)