Notwithstanding the other provisions of this chapter, if a charitable remainder unitrust, as defined in 26 U.S.C. § 664 (Internal Revenue Code), owns an obligation described in (2) of this section, the following rules apply, unless varied by the governing instrument:
(1) an obligation for the payment of money is principal at its inventory value except as provided in (2) of this section; the trustee may not make a provision for amortization of a premium or for accumulation for discount;
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Terms Used In Alaska Statutes 13.38.670
Amortization: Paying off a loan by regular installments.
Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
Contract: A legal written agreement that becomes binding when signed.
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
Trustee: A person or institution holding and administering property in trust.
(2) except to the extent otherwise provided in the governing instrument, an increase in the value of the following above inventory value is distributable as income:
(A) a zero coupon bond;(B) an annuitycontract before annuitization;(C) a life insurance contract before the death of the insured;(D) an interest in a common trust fund; in this subparagraph, “common trust fund” has the meaning given in 26 U.S.C. § 584 (Internal Revenue Code);(E) an interest in a limited liability company, limited liability partnership, or limited partnership; and(F) another obligation for the payment of money if the money is payable at a future time under a fixed, variable, or discretionary schedule of appreciation and if the payment exceeds the price at which the obligation was issued;(3) the increase in value of the obligations described in (2) of this section is distributable to the beneficiary who was the income beneficiary at the time of the increase; the increase is distributable from the first cash available from the principal or, if cash is not available from the principal, when cash is first available from the principal due to a sale, a redemption, or another disposition; when an unrealized increase is distributed as income from principal, the principal shall be reimbursed when the increase is realized;(4) the increase in value of an obligation described in (2) of this section is not available for distribution unless the trustee receives cash on account of the obligation;(5) notwithstanding a provision in this section to the contrary, a distribution from a partnership or limited liability company attributable to the cash flow or income derived from operations regularly carried on by the partnership or limited liability company is income, except to the extent otherwise provided in the governing instrument.
