2-3-909. Treatment and allocation of income.
(a) Following the conversion of an income trust to a total return unitrust or upon creation of a total return unitrust by a settlor, the trustee:
(i) Shall treat the unitrust amount as net income of the trust for purposes of determining the amount available, from time to time, for distribution from the trust; and
(ii) May allocate to trust income for each taxable year of the trust, or portion thereof:
(A) Net short-term capital gain described in Internal Revenue Code § 1222(5) for the year, or portion thereof, but only to the extent that the amount so allocated together with all other amounts allocated to trust income for the year, or portion thereof does not exceed the unitrust amount for the year, a portion thereof; and
(B) Net long-term capital gain described in Internal Revenue Code § 1222(7) for the year, or portion thereof, but only to the extent that the amount so allocated together with all other amounts, including amounts described in subparagraph (A) of this paragraph, allocated to trust income for the year, or portion thereof, does not exceed the unitrust amount for the year, or portion thereof.
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