701.1118701.1118Principal receipts. A trustee shall allocate to principal:
701.1118(1)(1)To the extent not allocated to income under this subchapter, assets received from a transferor during the transferor’s lifetime, a decedent’s estate, a trust with a terminating income interest, or a payer under a contract naming the trust or its trustee as beneficiary.
701.1118(2)(2)Money or other property received from the sale, exchange, liquidation, or change in form of a principal asset, including realized profit, subject to ss. 701.1115 to 701.1129.
701.1118(3)(3)Amounts recovered from 3rd parties to reimburse the trust because of disbursements described in s. 701.1131 (1) (g) or for other reasons to the extent not based on the loss of income.
701.1118(4)(4)Proceeds of property taken by eminent domain, but a separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest is income.
701.1118(5)(5)Net income received in an accounting period during which there is no beneficiary to whom a trustee may or must distribute income.
701.1118(6)(6)Other receipts as provided in ss. 701.1122 to 701.1129.
701.1118 HistoryHistory: 2013 a. 92 s. 259.
701.1119701.1119Rental property. To the extent that a trustee accounts for receipts from rental property in accordance with this section, the trustee shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods, must be added to principal and held subject to the terms of the lease and is not available for distribution to a beneficiary until the trustee’s contractual obligations have been satisfied with respect to that amount.
701.1119 HistoryHistory: 2013 a. 92 s. 260.
701.1120701.1120Obligation to pay money.
701.1120(1)(1)An amount received as interest, whether determined at a fixed, variable, or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, must be allocated to income without any provision for amortization of premium.
701.1120(2)(2)A trustee shall allocate to principal an amount received from the sale, redemption, or other disposition of an obligation to pay money to the trustee more than one year after it is purchased or acquired by the trustee, including an obligation whose purchase price or value when it is acquired is less than its value at maturity. If the obligation matures within one year after the trustee purchases or acquires it, an amount received in excess of its purchase price or its value when the trust acquires it must be allocated to income.
701.1120(3)(3)This section does not apply to an obligation to which s. 701.1123, 701.1124, 701.1125, 701.1126, 701.1128, or 701.1129 applies.
701.1120 HistoryHistory: 2013 a. 92 s. 261.
701.1121701.1121Insurance policies and similar contracts.
701.1121(1)(1)Except as provided in sub. (2), a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the trust or its trustee against loss for damage to, destruction of, or loss of title to, a trust asset. The trustee shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income, and to principal if the premiums are paid from principal.
701.1121(2)(2)A trustee shall allocate to income proceeds of a contract that insures the trustee against loss of occupancy or other use by an income beneficiary, loss of income, or, subject to s. 701.1117, loss of profits from a business.
701.1121(3)(3)This section does not apply to a contract to which s. 701.1123 applies.
701.1121 HistoryHistory: 2013 a. 92 s. 262.
701.1122701.1122Insubstantial allocations not required. If a trustee determines that an allocation between principal and income required by s. 701.1120 (2), 701.1123, 701.1124, 701.1125, 701.1126, or 701.1129 is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in s. 701.1104 (3) applies to the allocation. This power may be exercised by a cotrustee in the circumstances described in s. 701.1104 (4) and may be released for the reasons and in the manner described in s. 701.1104 (5). An allocation is presumed to be insubstantial if:
701.1122(1)(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.
701.1122(2)(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.
701.1122 HistoryHistory: 2013 a. 92 s. 263.
701.1123701.1123Deferred compensation, annuities, and similar payments.
701.1123(1)(1)In this section:
701.1123(1)(a)(a) “Marital deduction trust” means a trust for which an election to qualify for a marital deduction under section 2056 (b) (7), 2056A (a) (3), or 2523 (f) of the Internal Revenue Code has been made or a trust that qualified for the marital deduction under other provisions of section 2056 or 2523 of the Internal Revenue Code.
701.1123(1)(b)(b) “Payment” means an amount of money or property received by a trustee that is any of the following:
701.1123(1)(b)1.1. Part of a series, or eligible to be part of a series, of distributions payable over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payer in exchange for the future distributions.