701.1123(4)(c) (c) Upon the request of the surviving spouse of the settlor, a trustee of a marital deduction trust shall demand that a person administering a plan distribute the plan income to the trust.

701.1123(5) (5) If, to obtain an estate or gift tax marital deduction for an interest in a trust, a trustee must allocate more of a payment to income than provided for by this section, the trustee shall allocate to income the additional amount necessary to obtain the marital deduction.

701.1123(6) (6) This section does not apply to a payment to which s. 701.1124 applies.

701.1124(1)(1) In this section, “liquidating asset" means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes a leasehold, patent, copyright, royalty right, and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance. The term does not include a payment subject to s. 701.1123, resources subject to s. 701.1125, timber subject to s. 701.1126, an activity subject to s. 701.1128, an asset subject to s. 701.1129, or any asset for which the trustee establishes a reserve for depreciation under s. 701.1132.

701.1124(2) (2) A trustee shall allocate to income 10 percent of the receipts from a liquidating asset and the balance to principal.

701.1125(1)(1) To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources in accordance with this section, the trustee shall allocate them as follows:

701.1125(1)(b) (b) If received from a production payment, a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal.

701.1125(1)(c) (c) If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus, or delay rental is more than nominal, 90 percent must be allocated to principal and the balance to income.

701.1125(1)(d) (d) If an amount is received from a working interest or any other interest not provided for in par. (a), (b), or (c), 90 percent of the net amount received must be allocated to principal and the balance to income.

701.1125(2) (2) An amount received on account of an interest in water that is renewable must be allocated to income. If the water is not renewable, 90 percent of the amount must be allocated to principal and the balance to income.

701.1125(3) (3) This section applies whether or not a decedent or donor was extracting minerals, water, or other natural resources before the interest became subject to the trust.

701.1125(4) (4) If a trust owns an interest in minerals, water, or other natural resources on May 17, 2005, the trustee may allocate receipts from the interest as provided in this section or in the manner used by the trustee before May 17, 2005. If the trust acquires an interest in minerals, water, or other natural resources after May 17, 2005, the trustee shall allocate receipts from the interest as provided in this section.

701.1126(1)(1) To the extent that a trustee accounts for receipts from the sale of timber and related products in accordance with this section, the trustee shall allocate the net receipts:

701.1126(1)(a) (a) 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.

701.1126(1)(b) (b) 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 timber.

701.1126(1)(c) (c) To income or principal 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 pars. (a) and (b).

701.1126(1)(d) (d) To principal to the extent that advance payments, bonuses, and other payments are not allocated under par. (a), (b), or (c).

701.1126(2) (2) In determining net receipts to be allocated under sub. (1), a trustee shall deduct and transfer to principal a reasonable amount for depletion.

701.1126(3) (3) This section applies whether or not a decedent or transferor was harvesting timber from the property before it became subject to the trust.

701.1126(4) (4) If a trust owns an interest in timberland on May 17, 2005, the trustee may allocate net receipts from the sale of timber and related products as provided in this section or in the manner used by the trustee before May 17, 2005. If the trust acquires an interest in timberland after May 17, 2005, the trustee shall allocate net receipts from the sale of timber and related products as provided in this section.