Ch. 705                                       LAWS OF MARYLAND

CHAPTER 705

(House Bill 919)

AN ACT concerning

Trusts - Allocation of Certain Capital Gains
Distributions by Regulated Investment Companies

FOR the purpose of authorizing trustees to elect to allocate to
income certain distributions by regulated investment
companies of realized capital gains.

BY repealing and reenacting, with amendments,

Article - Estates and Trusts

Section 14-205

Annotated Code of Maryland

(1974 Volume and 1988 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Estates and Trusts

14-205.

(a)  Corporate distributions of shares of the distributing
corporation (whether or not of the same class), including
distributions in the form of a stock split or stock dividend, are
principal but the provisions of this subsection shall not apply
to successive estates or interests in existence prior to June 1,
1965, in which the life tenant is entitled to stock dividends
representing earnings during the life tenancy. A right to
subscribe to shares or other securities issued by the
distributing corporation accruing to stockholders on account of
their stock ownership and the proceeds of any sale of the right
are principal.

(b)  Except to the extent that the corporation indicates
that some part of a corporate distribution is a settlement of
preferred or guaranteed dividends accrued since the trustee
became a stockholder or is in lieu of an ordinary cash dividend,
a corporate distribution is principal if the distribution is
pursuant to:

(1)  A call of shares;

(2)  A merger, consolidation, reorganization, or other
plan by which assets of the corporation are acquired by another
corporation; or

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