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28-70-408. Insubstantial allocations not required.
Arkansas Code — all titles (historical 2020) · legal_authorities
28-70-408. Insubstantial allocations not required.
If a trustee determines that an allocation between principal and income required by § 28-70-409, § 28-70-410, § 28-70-411, § 28-70-412, or § 28-70-415 is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in § 28-70-104(c) applies to the allocation. This power may be exercised by a cotrustee in the circumstances described in § 28-70-104(d) and may be released for the reasons and in the manner described in § 28-70-104(e). An allocation is presumed to be insubstantial if:
(1) the amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than 10 percent; or
(2) the value of the asset producing the receipt for which the allocation would be made is less than 10 percent of the total value of the trust's assets at the beginning of the accounting period.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 28-70-408
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Stable record: arkansas_code:legal_authorities:28-70-408
Source file: gov.ar.code.title.28.odt
Pages: Not recorded – Not recorded
Passage SHA-256: a9fcfda46f7c63f7ee6dd7da6304bb775d53fd21934400997521cecf2925c096
Source location: content.xml paragraph 11925
Stored source content
28-70-408. Insubstantial allocations not required.
If a trustee determines that an allocation between principal and income required by § 28-70-409, § 28-70-410, § 28-70-411, § 28-70-412, or § 28-70-415 is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in § 28-70-104(c) applies to the allocation. This power may be exercised by a cotrustee in the circumstances described in § 28-70-104(d) and may be released for the reasons and in the manner described in § 28-70-104(e). An allocation is presumed to be insubstantial if:
(1) the amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than 10 percent; or
(2) the value of the asset producing the receipt for which the allocation would be made is less than 10 percent of the total value of the trust's assets at the beginning of the accounting period.
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Arkansas Code — all titles (historical 2020) · legal_authorities
28-70-409. Deferred compensation, annuities, and similar payments.
(a) In this section:
(1) “Payment” means a payment that a trustee may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payer in exchange for future payments. The term includes a payment made in money or property from the payer's general assets or from a separate fund created by the payer. For purposes of subsections (d), (e), (f), and (g) the term also includes a payment from any separate fund, regardless of the reason for the payment.
(2) “Separate fund” includes a private or commercial annuity, an individual retirement account, and a pension, profit-sharing, stock-bonus, or stock-ownership plan.
(b) To the extent that a payment is characterized as interest, a dividend, or a payment made in lieu of interest or a dividend, a trustee shall allocate the payment to income. The trustee shall allocate to principal the balance of the payment and any other payment received in the same accounting period that is not characterized as interest, a dividend, or an equivalent payment.
(c) If no part of a payment is characterized as interest, a dividend, or an equivalent payment, and all or part of the payment is required to be made, a trustee shall allocate to income 10 percent of the part that is required to be made during the accounting period and the balance to principal. If no part of a payment is required to be made or the payment received is the entire amount to which the trustee is entitled, the trustee shall allocate the entire payment to principal. For purposes of this subsection, a payment is not “required to be made” to the extent that it is made because the trustee exercises a right of withdrawal.
(d)
Source: Arkansas Code — historical release 78 (November 6, 2020) · 28-70-409
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 28-70-409. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
28-70-410. Liquidating asset.
(a) In this section, “liquidating asset” means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes a leasehold, patent, copyright, royalty right, and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance. The term does not include a payment subject to § 28-70-409, resources subject to § 28-70-411, timber subject to § 28-70-412, an activity subject to § 28-70-414, an asset subject to § 28-70-415, or any asset for which the trustee establishes a reserve for depreciation under § 28-70-503.
(b) A trustee shall allocate to income 10 percent of the receipts from a liquidating asset and the balance to principal.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 28-70-410
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 28-70-410. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
28-70-411. Minerals, water, and other natural resources.
(a) To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the trustee shall allocate them as follows:
(1) If received as nominal delay rental or nominal annual rent on a lease, a receipt must be allocated to income.
(2) If received from a production payment, a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal.
(3) If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus, or delay rental is more than nominal, 90 percent must be allocated to principal and the balance to income.
(4) If an amount is received from a working interest or any other interest not provided for in paragraph (1), (2), or (3), 90 percent of the net amount received must be allocated to principal and the balance to income.
(b) An amount received on account of an interest in water that is renewable must be allocated to income. If the water is not renewable, 90 percent of the amount must be allocated to principal and the balance to income.
(c) This chapter applies whether or not a decedent or donor was extracting minerals, water, or other natural resources before the interest became subject to the trust.
(d) If a trust owns an interest in minerals, water, or other natural resources on January 1, 2000, the trustee may allocate receipts from the interest as provided in this chapter or in the manner used by the trustee before January 1, 2000. If the trust acquires an interest in minerals, water, or other natural resources after January 1, 2000, the trustee shall allocate receipts fr
Source: Arkansas Code — historical release 78 (November 6, 2020) · 28-70-411
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 28-70-411. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
28-70-412. Timber.
(a) To the extent that a trustee accounts for receipts from the sale of timber and related products pursuant to this section, the trustee shall allocate the net receipts:
(1) to income to the extent that the amount of timber removed from the land does not exceed the rate of growth of the timber during the accounting periods in which a beneficiary has a mandatory income interest;
(2) to principal to the extent that the amount of timber removed from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber;
(3) to or between income and principal if the net receipts are from the lease of timberland or from a contract to cut timber from land owned by a trust, by determining the amount of timber removed from the land under the lease or contract and applying the rules in paragraphs (1) and (2); or
(4) to principal to the extent that advance payments, bonuses, and other payments are not allocated pursuant to paragraph (1), (2), or (3).
(b) In determining net receipts to be allocated pursuant to subsection (a), a trustee shall deduct and transfer to principal a reasonable amount for depletion.
(c) This chapter applies whether or not a decedent or transferor was harvesting 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 trustee may allocate net receipts from the sale of timber and related products as provided in this chapter or in the manner used by the trustee before January 1, 2000. If the trust acquires an interest in timberland after January 1, 2000, the trustee shall allocate net receipts from the sale of timber and related products as provided in this chapter.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 28-70-412
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 28-70-412. This identifies an authority to review, not proof of applicability.