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Ch. 478
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2002 LAWS OF MARYLAND
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(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.
15-520.
(a) (1) If a marital deduction is allowed for all or part of a trust whose assets
consist substantially of property that does not provide the spouse with sufficient
income from or use of the trust assets, AND IF THE AMOUNTS THAT THE TRUSTEE
TRANSFERS FROM PRINCIPAL TO INCOME UNDER § 15-502.2(A) OF THIS SUBTITLE
AND DISTRIBUTES TO THE SPOUSE FROM PRINCIPAL IN ACCORDANCE WITH THE
TERMS OF THE TRUST ARE INSUFFICIENT TO PROVIDE THE SPOUSE WITH THE
BENEFICIAL ENJOYMENT REQUIRED TO OBTAIN THE MARITAL DEDUCTION, the
spouse may require the trustee to make property productive of income, [or] convert
property within a reasonable time, OR MAY REQUEST THE TRUSTEE EXERCISE THE
POWER CONFERRED BY § 15-502.2(A) OF THIS SUBTITLE.
(2) The trustee may decide which action or combination of actions to
take.
(b) In cases not governed by subsection (a) of this section, proceeds from the
sale or other disposition of an asset are principal without regard to the amount of
income the asset produces during any accounting period.
15-528.
(a) A fiduciary may make adjustments between principal and income to offset
the shifting of economic interests or tax benefits between income beneficiaries and
remainder beneficiaries which arise from:
(1) Elections and decisions, other than those described in subsection (b)
of this section, that the fiduciary makes from time to time regarding tax matters;
(2) An income tax or any other tax that is imposed upon the fiduciary or
a beneficiary as a result of a transaction involving or a distribution from the estate or
trust; or
(3) [The] SUBJECT TO SUBSECTION (B) OF THIS SECTION, THE
ownership by an estate or trust of an interest in an entity whose taxable income,
whether or not distributed, is includable in the taxable income of the estate, trust, or
a beneficiary.
(B) A TRUSTEE SHALL MAKE AN ADJUSTMENT FROM PRINCIPAL TO INCOME
TO COMPENSATE AN INCOME BENEFICIARY FOR TAXES PAID OR PAYABLE BY THE
INCOME BENEFICIARY IN RESPECT OF THE TAXABLE INCOME OF AN ENTITY THAT IS
TAXABLE TO THE INCOME BENEFICIARY BUT THAT IS DISTRIBUTED TO THE
TRUSTEE AND ALLOCATED TO PRINCIPAL.
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[(b)] (C) (1) If the amount of an estate tax marital deduction or charitable
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- 3818 -
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