2876 ARTICLE 75B

1939, ch. 580, sec. 5. :

5. (Corporate Dividends and Share Rights.)

(1) All dividends on shares of a corporation forming a part of the
principal which are payable in the shares of the corporation shall be deemed
principal. Subject to the provisions of this section, all dividends payable
otherwise than in the shares of the corporation itself, including ordinary
and extraordinary dividends and dividends payable in shares or other se-
curities or obligations of corporations other than the declaring corporation,
shall be deemed income. Where the trustees shall have the option of re-
ceiving a dividend either in cash or in the shares of the declaring corpora-
tion, it shall be considered as a cash dividend and deemed income, irrespec-
tive of the choice made by the trustee.

(2) All rights to subscribe to the shares or other securities or obligations
of a corporation accruing on account of the ownership of shares or other
securities in such corporation, and the proceeds of any sale of such rights,
shall be deemed principal. All rights to subscribe to the shares or other
securities or obligations of a corporation accruing on account of the owner-
ship of shares or other securities in another corporation, and the proceeds
of any sale of such rights, shall be deemed income.

(3) Where the assets of a corporation are liquidated, amounts paid
upon corporate shares as cash dividends declared before such liquidation
occurred or as arrears of preferred or guaranteed dividends shall be
deemed income; all other amounts paid upon corporate shares on disburse-
ment of the corporate assets to the stockholders shall be deemed principal.
All disbursements of corporate assets to the stockholders, whenever made,
which are designated by the corporation as a return of capital or division
of corporate property shall be deemed principal.

(4) Where a corporation succeeds another by merger, consolidation or
reorganization or otherwise acquires its assets, and the corporate shares
of the succeeding corporation are issued to the shareholders of the original
corporation in like proportion to, or in substitution for, their shares of the
original corporation, the two corporations shall be considered a single cor-
poration in applying the provisions of this section. But two corporations
shall not be considered a single corporation under this section merely
because one owns corporate shares of or otherwise controls or directs the
other.

(5) In applying this section the date when a dividend accrues to the
person who is entitled to it shall be held to be the date specified by the
corporation as the one on which the stockholders entitled thereto are de-
termined, or in default thereof the date of declaration of the dividend.

1939, ch. 580, sec. 6.

6. (Premium and Discount Bonds and Ground Rents.) Where any
part of the principal consists of bonds or other obligations for the pay-
ment of money, or of ground rents, they shall be deemed principal at their
inventory value or in default thereof at their market value at the time
the principal was established, or at their cost where purchased later, re-
gardless of their par or maturity or redemption value; and upon their
respective maturities or upon their sale or redemption any loss or gain
realized thereon shall fall upon or enure to the principal.