(a) To the extent that a trustee accounts for receipts from the sale of timber and
related products pursuant to this section, the trustee shall allocate the net receipts:
(1) to income to the extent that the amount of timber removed from the land does not
exceed the rate of growth of the timber during the accounting periods in which a beneficiary
has a mandatory income interest;
(2) to principal to the extent that the amount of timber removed from the land exceeds
the rate of growth of the timber or the net receipts are from the sale of standing
(3) to or between income and principal if the net receipts are from the lease of timberland
or from a contract to cut timber from land owned by a trust, by determining the amount
of timber removed from the land under the lease or contract and applying the rules
in Subdivisions (1) and (2); or
(4) to principal to the extent that advance payments, bonuses, and other payments
are not allocated pursuant to Subdivision (1), (2), or (3).
(b) In determining net receipts to be allocated pursuant to Subsection (a), a trustee
shall deduct and transfer to principal a reasonable amount for depletion.
(c) This chapter applies whether or not a decedent or transferor was harvesting timber
from the property before it became subject to the trust.
(d) If a trust owns an interest in timberland on January 1, 2004, the trustee may
allocate a net receipt from the sale of timber and related products in the manner
provided by this chapter or in any lawful manner used by the trustee before January
1, 2004, to make the same allocation. If the trust acquires an interest in timberland after January 1, 2004, the trustee
shall allocate net receipts from the sale of timber and related products in the manner
provided by this chapter.
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