Code of Virginia

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Code of Virginia
Title 64.2. Wills, Trusts, and Fiduciaries
Chapter 10. Uniform Principal and Income Act
5/13/2021

§ 64.2-1028. Income taxes.

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

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

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

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

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

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

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

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

1999, c. 975, § 55-277.29; 2009, c. 477; 2012, c. 614.

The chapters of the acts of assembly referenced in the historical citation at the end of this section may not constitute a comprehensive list of such chapters and may exclude chapters whose provisions have expired.