(1) A tax required to be paid by a fiduciary which is based on receipts allocated
to income must be paid from income.
(2) A tax required to be paid by a fiduciary which is based on receipts allocated
to principal must be paid from principal, even if the tax is called an income tax
by the taxing authority.
(3) Subject to subsection (4) of this section and sections 15-1.2-504, 15-1.2-505, and 15-1.2-507, a tax required to be paid by a fiduciary on a share of an entity's taxable income
in an accounting period must be paid from:
(a) Income and principal proportionately to the allocation between income and principal
of receipts from the entity in the period; and
(b) Principal to the extent the tax exceeds the receipts from the entity in the period.
(4) After applying subsections (1) through (3) of this section, a fiduciary shall
adjust income or principal receipts, to the extent the taxes the fiduciary pays are
reduced because of a deduction for a payment made to a beneficiary.
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