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28-70-409. Deferred compensation, annuities, and similar payments.
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. A text match is a research starting point; applicability is not established.
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Stable record: arkansas_code:legal_authorities:28-70-409
Source file: gov.ar.code.title.28.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 9c307e1cf408d723236bed3d6b2dd5b449eb4108c9477352744b79bcc65a2eb6
Source location: content.xml paragraph 11932
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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) Except as otherwise provided in subsection (e), subsections (f) and (g) apply, and subsections (b) and (c) do not apply, in determining the allocation of a payment made from a separate fund to:
(1) a trust to which an election to qualify for a marital deduction under Section 2056(b)(7) of the Internal Revenue Code of 1986, 26 U.S.C. § 2056(b)(7), as in effect January 1, 2011, has been made; or
(2) a trust that qualifies for the marital deduction under Section 2056(b)(5) of the Internal Revenue Code of 1986, 26 U.S.C. § 2056(b)(5), as in effect January 1, 2011.
(e) Subsections (d), (f), and (g) do not apply if and to the extent that the series of payments would, without the application of subsection (d), qualify for the marital deduction under Section 2056(b)(7)(C) of the Internal Revenue Code of 1986, 26 U.S.C. § 2056(b)(7)(C), as in effect January 1, 2011.
(f) A trustee shall determine the internal income of each separate fund for the accounting period as if the separate fund were a trust subject to this chapter. Upon request of the surviving spouse, the trustee shall demand that the person administering the separate fund distribute the internal income to the trust. The trustee shall allocate a payment from the separate fund to income to the extent of the internal income of the separate fund and distribute that amount to the surviving spouse. The trustee shall allocate the balance of the payment to principal. Upon request of the surviving spouse, the trustee shall allocate principal to income to the extent the internal income of the separate fund exceeds payments made from the separate fund to the trust during the accounting period.
(g) If a trustee cannot determine the internal income of a separate fund but can determine the value of the separate fund, the internal income of the separate fund is deemed to equal three percent of the fund's value, according to the most recent statement of value preceding the beginning of the accounting period. If the trustee can determine neither the internal income of the separate fund nor the fund's value, the internal income of the fund is deemed to equal the product of the interest rate and the present value of the expected future payments, as determined under Section 7520 of the Internal Revenue Code of 1986, 26 U.S.C. § 7520, as in effect January 1, 2011, for the month preceding the accounting period for which the computation is made.
(h) This section does not apply to a payment to which § 28-70-410 applies.
Cross-references
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Allowance of marital deduction** For purposes of the tax imposed by section 2001, the value of the taxable estate shall, except as limited by subsection (b), be determined by deducting from the value of the gross estate an amount equal to the value of any interest in property which passes or has passed from the decedent to his surviving spouse, but only to the extent that such interest is included in determining the value of the gross estate.
**(b) Limitation in the case of life estate or other terminable interest**
(1) **General rule** — Where, on the lapse of time, on the occurrence of an event or contingency, or on the failure of an event or contingency to occur, an interest passing to the surviving spouse will terminate or fail, no deduction shall be allowed under this section with respect to such interest—
(A) if an interest in such property passes or has passed (for less than an adequate and full consideration in money or money’s worth) from the decedent to any person other than such surviving spouse (or the estate of such spouse); and
(B) if by reason of such passing such person (or his heirs or assigns) may possess or enjoy any part of such property after such termination or failure of the interest so passing to the surviving spouse;
and no deduction shall be allowed with respect to such interest (even if such deduction is not disallowed under subparagraphs (A) and (B))—
(C) if such interest is to be acquired for the surviving spouse, pursuant to directions of the decedent, by his executor or by the trustee of a trust.
For purposes of this paragraph, an interest shall not be considered as an interest which will terminate or fail merely because it is the ownership of a bond, note, or similar contractual obligation, the discharge of which woul
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 2056
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 2056. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 2607
TITLE 26—INTERNAL REVENUE CODE
§ 2056
the amendment made by section 514(a) of such Act [sec-
tion 514(a) of Pub. L. 95–600, amending this section].’’
EFFECTIVE
DATE
OF
1978 AMENDMENT; CHARITABLE
LEAD TRUSTS
AND CHARITABLE REMAINDER TRUSTS
IN CASE OF INCOME AND GIFT TAXES
Pub. L. 95–600, title V, § 514(c), as added by Pub. L.
96–222, title I, § 105(a)(4)(B), Apr. 1, 1980, 94 Stat. 219;
amended Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095,
provided that:
‘‘(1) FOR SUBSECTION (a).—The amendment made by
subsection (a) [amending this section] shall apply in
the case of decedents dying after December 31, 1969.
‘‘(2) FOR
SUBSECTION
(b).—Subsection (b) [section
514(b) of Pub. L. 95–600, set out below]—
‘‘(A) insofar as it relates to section 170 of the Inter-
nal Revenue Code of 1986 [formerly I.R.C. 1954] shall
apply to transfers in trust and contributions made
after July 31, 1969, and
‘‘(B) insofar as it relates to section 2522 of the In-
ternal Revenue Code of 1986 shall apply to transfers
made after December 31, 1969.’’
EFFECTIVE DATE OF 1976 AMENDMENT
Pub. L. 94–455, title XIII, § 1304(c), Oct. 4, 1976, 90 Stat.
1716, provided that: ‘‘The amendments made by this
section [amending this section] shall apply in the case
of decedents dying after December 31, 1969.’’
Amendment by section 1307(d)(1)(B)(ii), (C) of Pub. L.
94–455, applicable to estates of decedents dying after
Dec. 31, 1976, see section 1307(e) of Pub. L. 94–455, set out
as a note under section 501 of this title.
Amendment by section 1313(b)(2) of Pub. L. 94–455 ap-
plicable on day following Oct. 4, 1976, see section 1313(d)
of Pub. L. 94–455, set out as a note under section 501 of
this title.
Amendment by section 1902(a)(4), (12)(A) of Pub. L.
94–455 applicable in the ca
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 2056
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 2056. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** For purposes of this title, the value of any annuity, any interest for life or a term of years, or any remainder or reversionary interest shall be determined—
(1) under tables prescribed by the Secretary, and
(2) by using an interest rate (rounded to the nearest 2/10ths of 1 percent) equal to 120 percent of the Federal midterm rate in effect under section 1274(d)(1) for the month in which the valuation date falls.
If an income, estate, or gift tax charitable contribution is allowable for any part of the property transferred, the taxpayer may elect to use such Federal midterm rate for either of the 2 months preceding the month in which the valuation date falls for purposes of paragraph (2). In the case of transfers of more than 1 interest in the same property with respect to which the taxpayer may use the same rate under paragraph (2), the taxpayer shall use the same rate with respect to each such interest.
**(b) Section not to apply for certain purposes** This section shall not apply for purposes of part I of subchapter D of chapter 1 or any other provision specified in regulations.
**(c) Tables**
(1) **In general** — The tables prescribed by the Secretary for purposes of subsection (a) shall contain valuation factors for a series of interest rate categories.
(2) **Revision for recent mortality charges** — The Secretary shall revise the initial tables prescribed for purposes of subsection (a) to take into account the most recent mortality experience available as of the time of such revision. Such tables shall be revised not less frequently than once each 10 years to take into account the most recent mortality experience available as of the time of the revision.
**(d) Valuation date** For purposes of this section, the term “valuation date” mea
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 7520
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 7520. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 3960
TITLE 26—INTERNAL REVENUE CODE
§ 7520
L. 99–514, which is set out as a note under section 1378
of this title.
AMENDMENTS
1997—Subsec. (f)(4)(A). Pub. L. 105–34 inserted at end
‘‘No penalty shall be imposed under this subparagraph
on any failure which is shown to be due to reasonable
cause and not willful neglect.’’
1990—Subsec. (c)(3). Pub. L. 101–508 substituted ‘‘pay-
able on the later of’’ for ‘‘payable on later of’’.
1989—Subsec. (d)(4). Pub. L. 101–239, § 7821(b), struck
out ‘‘for taxable years beginning after 1987,’’ before
‘‘the applicable percentage’’ and substituted ‘‘unless
more than 50 percent’’ for ‘‘if more than 50 percent’’
and ‘‘who would have been entitled’’ for ‘‘who would
not have been entitled’’.
Subsec. (f)(4)(B). Pub. L. 101–239, § 7721(c)(12), sub-
stituted ‘‘part II of subchapter A of chapter 68’’ for
‘‘section 6653’’.
1988—Subsec. (b)(2). Pub. L. 100–647, § 2004(e)(4)(A),
amended par. (2) generally. Prior to amendment, par.
(2) read as follows: ‘‘the amount of the required pay-
ment for the preceding applicable election year.’’
Subsec. (c). Pub. L. 100–647, § 2004(e)(5), amended sub-
sec. (c) generally. Prior to amendment, subsec. (c) read
as follows: ‘‘If the amount determined under subsection
(b)(2) exceeds the amount determined under subsection
(b)(1), then the entity shall be entitled to a refund of
such excess.’’
Subsec. (d)(2)(A). Pub. L. 100–647, § 2004(e)(10), sub-
stituted ‘‘(other than credits and tax-exempt income)’’
for ‘‘(other than credits)’’.
Subsec. (d)(2)(B). Pub. L. 100–647, § 2004(e)(7), (10), sub-
stituted ‘‘(other than credits and tax-exempt income)’’
for ‘‘(other than credits)’’ and inserted before period at
end ‘‘(and such corporation shall be treated as an S cor-
poration for such taxable
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 7520
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 7520. 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.