New York Laws
Part 5 - Allocation of Disbursements During Administration of Trust
11-A-5.5 - Income Taxes

(a) A tax required to be paid by a trustee based on receipts allocated
to income must be paid from income.
(b) A tax required to be paid by a trustee 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) A tax required to be paid by a trustee on the trust's share of an
entity's taxable income must be paid proportionately:
(1) from income to the extent that receipts from the entity are
allocated to income; and
(2) from principal to the extent that:
(A) receipts from the entity are allocated to principal; and
(B) the trust's share of the entity's taxable income exceeds the total
receipts described in subparagraph (1) and clause (A).
(d) For purposes of this section, receipt allocated to principal or
income must be reduced by the amount distributed to a beneficiary from
principal or income for which the trust receives a deduction in
calculating the tax.

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