KRS 386.498: Payment of income taxes.

(1) A tax required to be paid by a trustee based on receipts allocated to income shall be

paid from income.

(2) A tax required to be paid by a trustee based on receipts allocated to principal shall

be paid from principal, even if the tax is called an income ta x by the taxing

authority.

(3) A tax required to be paid by a trustee on the trust's share of an entity's taxable

income shall be paid proportionately:

(a) From income to the extent that receipts from the entity are allocated to

income; and

(b) From principal to the extent that:

1. Receipts from the entity are allocated to principal; and

2. The trust's share of the entity's taxable income exceeds the total receipts

described in paragraph (a) of this subsection and paragraph (b)1. of this

subsection.

(4) For purposes of this section, receipts allocated to principal or income shall be

reduced by the amount distributed to a beneficiary from principal or income for

which the trust receives a deduction in calculating the tax.