Iowa Code 637.410 – Principal receipts
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The following items must be allocated to principal:
1. To the extent not allocated to income under this chapter, assets received from any of the following sources:
a. A transferor during the transferor’s lifetime.
b. A decedent‘s estate.
c. A trust with a terminating income interest.
d. A payor pursuant to a contract naming the trust or its trustee as beneficiary.
Terms Used In Iowa Code 637.410
- Accounting period: means a calendar year, unless another twelve-month period is selected by a fiduciary. See Iowa Code 637.102
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- 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
- Beneficiary: includes , in the case of a decedent's estate, an heir, legatee, and devisee, and, in the case of a trust, an income beneficiary and a remainder beneficiary. See Iowa Code 637.102
- Contract: A legal written agreement that becomes binding when signed.
- Decedent: A deceased person.
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Income: means money or property a fiduciary receives as the current return from a principal asset. See Iowa Code 637.102
- Income interest: means an income beneficiary's right to receive all or part of the net income, whether the terms of the trust require it to be distributed or authorize it to be distributed in the trustee's discretion. See Iowa Code 637.102
- Mandatory income interest: means an income beneficiary's right to receive net income that the terms of the trust require the fiduciary to distribute. See Iowa Code 637.102
- Principal: means property held in trust for distribution to a remainder beneficiary when the trust terminates. See Iowa Code 637.102
- property: includes personal and real property. See Iowa Code 4.1
- Trustee: A person or institution holding and administering property in trust.
- Trustee: includes an original, additional, or successor trustee, whether or not appointed or confirmed by a court. See Iowa Code 637.102
2. Cash or other property received from the sale, exchange, liquidation, or change in form of a principal asset, including realized profit, subject to this subchapter.
3. Amounts recovered from third parties to reimburse the trust because of disbursements described in section 637.502, subsection 1, paragraph “g”, or for other reasons to the extent not based on the loss of income.
4. Proceeds of property taken by eminent domain, but a separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest is income.
5. Net income received in a period during which there is no beneficiary to whom a trustee may or must distribute income.
6. Other receipts, as provided in part 3.