A. A tax required to be paid by a fiduciary that is based on receipts allocated to income must be paid from income.
B. A tax required to be paid by a fiduciary that is based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authority.
C. Subject to subsection D and §§ 64.2-1067, 64.2-1068, and 64.2-1070, a tax required to be paid by a fiduciary on a share of an entity's taxable income in an accounting period must be paid from:
1. Income and principal proportionately to the allocation between income and principal of receipts from the entity in the period; and
2. Principal, to the extent the tax exceeds the receipts from the entity in the period.
D. After applying subsections A, B, and C, a fiduciary shall adjust income or principal receipts, to the extent the taxes the fiduciary pays are reduced because of a deduction for a payment made to a beneficiary.
2022, c. 354.
Structure Code of Virginia
Title 64.2 - Wills, Trusts, and Fiduciaries
Chapter 10.1 - Uniform Fiduciary Income and Principal Act
§ 64.2-1036. Fiduciary duties; general principles
§ 64.2-1037. Judicial review of exercise of discretionary power; request for instruction
§ 64.2-1038. Fiduciary's power to adjust
§ 64.2-1040. Application; duties and remedies
§ 64.2-1041. Authority of fiduciary
§ 64.2-1047. Special tax benefits; other rules
§ 64.2-1048. Character of receipts from entity
§ 64.2-1049. Distribution from trust or estate
§ 64.2-1050. Business or other activity conducted by fiduciary
§ 64.2-1051. Principal receipts
§ 64.2-1053. Receipt on obligation to be paid in money
§ 64.2-1054. Insurance policy or contract
§ 64.2-1055. Insubstantial allocation not required
§ 64.2-1056. Deferred compensation, annuity, or similar payment
§ 64.2-1057. Liquidating asset
§ 64.2-1058. Minerals, water, and other natural resources
§ 64.2-1060. Marital deduction property not productive of income
§ 64.2-1061. Derivative or option
§ 64.2-1062. Asset-backed security
§ 64.2-1063. Other financial instrument or arrangement
§ 64.2-1064. Disbursement from income
§ 64.2-1065. Disbursement from principal
§ 64.2-1066. Transfer from income to principal for depreciation
§ 64.2-1067. Reimbursement of income from principal
§ 64.2-1068. Reimbursement of principal from income
§ 64.2-1070. Adjustment between income and principal because of taxes
§ 64.2-1071. Determination and distribution of net income
§ 64.2-1072. Distribution to successor beneficiary
§ 64.2-1073. When right to income begins and ends
§ 64.2-1075. Apportionment when income interest ends
§ 64.2-1076. Uniformity of application and construction
§ 64.2-1077. Relation to Electronic Signatures in Global and National Commerce Act