New Mexico Statutes 46-3A-505. Income taxes
A. A tax required to be paid by a trustee based on receipts allocated to income must be paid from income.
Terms Used In New Mexico Statutes 46-3A-505
- 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
- Trustee: A person or institution holding and administering property in trust.
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:
(1) from income to the extent that receipts from the entity are allocated only to income;
(2) from principal to the extent that receipts from the entity are allocated only to principal;
(3) proportionately from principal and income to the extent that receipts from the entity are allocated to both income and principal; and
entity.
(4) from principal to the extent that the tax exceeds the total receipts from the D. After applying Subsections A through C of this section, the trustee shall adjust income or principal receipts to the extent that the trust’s taxes are reduced because the trust receives a deduction for payments made to a beneficiary.