Code of Alabama
Article 4 - Allocation of Receipts During Administration.
Section 19-3A-401 - Character of Receipts.

(a) For purposes of this section, "entity" means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or any other organization in which a fiduciary has an interest other than (1) a trust or decedent's estate to which Section 19-3A-402 applies, (2) a business or activity to which Section 19-3A-403 applies, or (3) an asset-backed security to which Section 19-3A-415 applies.
(b) Except as otherwise provided in this section, a fiduciary shall allocate to income money received from an entity.
(c) A fiduciary shall allocate the following receipts from an entity to principal:
(1) Property other than money except in cases when the fiduciary has the choice to receive dividends or similar payments either in cash or in the shares or similar ownership interests of the corporation or other business entity, in which case, the fiduciary shall allocate the receipts to income;
(2) Money received in one distribution or a series of related distributions in exchange for part or all of a trust's interest in the entity;
(3) Money received in total or partial liquidation of the entity; and
(4) Money received from an entity that is a regulated investment company or a real estate investment trust, if the money distributed is a capital gain dividend for federal income tax purposes.
(d) For purposes of subsection (c)(3), money is received in partial liquidation to the extent that the entity, at or near the time of a distribution, indicates that it is a distribution in partial liquidation.
(e) A fiduciary may rely upon a statement made by an entity about the source or character of a distribution if the statement is made at or near the time of distribution by the entity's board of directors or other person or group of persons authorized to exercise powers to pay money or transfer property comparable to those of a corporation's board of directors.