(a) 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 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 Section 19-3A-409, natural resources subject to Section 19-3A-411, timber subject to Section 19-3A-412, an activity subject to Section 19-3A-414, an asset subject to Section 19-3A-415, or any asset for which the fiduciary establishes a reserve for depreciation under Section 19-3A-503.
(b) A fiduciary shall allocate to income ten percent (10%) of the receipts from a liquidating asset and the balance to principal.
Structure Code of Alabama
Title 19 - Fiduciaries and Trusts.
Chapter 3A - Alabama Principal and Income Act.
Article 4 - Allocation of Receipts During Administration.
Section 19-3A-401 - Character of Receipts.
Section 19-3A-402 - Distributions From Trust or Decedent's Estate.
Section 19-3A-403 - Business and Other Activities Conducted by Fiduciary.
Section 19-3A-404 - Principal Receipts.
Section 19-3A-405 - Rental Property.
Section 19-3A-406 - Bonds and Other Obligations.
Section 19-3A-407 - Insurance Policies and Similar Contracts.
Section 19-3A-408 - Insubstantial Allocations Not Required.
Section 19-3A-409 - Deferred Compensation, Annuities, and Similar Payments.
Section 19-3A-410 - Liquidating Assets.
Section 19-3A-411 - Minerals, Water, and Other Natural Resources.
Section 19-3A-413 - Property Not Productive of Income.