55-277.29 - Income taxes. - Virginia Statutes

§ 55-277.29. Income taxes.

A. A tax required to be paid by a trustee based on receipts allocated toincome must be paid from income.

B. A tax required to be paid by a trustee based on receipts allocated toprincipal must be paid from principal, even if the tax is called an incometax by the taxing authority.

C. A tax required to be paid by a trustee on the trust's share of an entity'staxable income must be paid:

1. From income to the extent that receipts from the entity are allocated onlyto income;

2. From principal to the extent that receipts from the entity are allocatedonly to principal;

3. Proportionately from principal and income to the extent that receipts fromthe entity are allocated to both income and principal; and

4. From principal to the extent that the tax exceeds the total receipts fromthe entity.

D. After applying subsections A through C, the trustee shall adjust income orprincipal receipts to the extent that the trust's taxes are reduced becausethe trust receives a deduction for payments made to a beneficiary.

(1999, c. 975; 2009, c. 477.)