(a) (1) In this section, “asset-backed security” means an asset whose value is based upon the right it gives the owner to receive distributions from the proceeds of financial assets that provide collateral for the security.
(2) “Asset-backed security” includes an asset that gives the owner the right to receive from the collateral financial assets only the interest or other current return or only the proceeds other than interest or current return.
(3) “Asset-backed security” does not include an asset to which § 15-508 or § 15-516 of this subtitle applies.
(b) If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets, the trustee shall allocate to income the portion of the payment which the payer identifies as being from interest or other current return and shall allocate the balance of the payment to principal.
(c) (1) If a trust receives one or more payments in exchange for the trust’s entire interest in an asset–backed security in one accounting period, the trustee shall allocate the payments to principal.
(2) If a payment is one of a series of payments that will result in the liquidation of the trust’s interest in the security over more than one accounting period, the trustee shall allocate 10% of the payment to income and the balance to principal.
Structure Maryland Statutes
Subtitle 5 - Maryland Uniform Principal and Income Act
Part IV - Allocation of Receipts During Administration of Trust
Section 15-508 - Character of Receipts
Section 15-509 - Distribution From Trust or Estate
Section 15-510 - Separate Accounting Methods in Business and Other Activities Conducted by Trustee
Section 15-511 - Principal Receipts
Section 15-512 - Rental Property
Section 15-513 - Obligation to Pay Money
Section 15-514 - Insurance Policies and Similar Contracts
Section 15-515 - Insubstantial Allocations Not Required
Section 15-516 - Deferred Compensation, Annuities, and Similar Payments
Section 15-517 - Liquidating Asset
Section 15-518 - Minerals, Water, and Other Natural Resources
Section 15-520 - Property Not Productive of Income