N.Y. Estates, Powers & Trusts Law § 11-a-4.6: Obligation to pay money

§ 11-A-4.6 Obligation to pay money

(a) An amount received as interest, whether determined at a fixed,

variable, or floating rate, on an obligation to pay money to the

trustee, including an amount received as consideration for prepaying

principal, must be allocated to income without any provision for

amortization of premium.

(b) A trustee shall allocate to principal an amount received from the

sale, redemption, or other disposition of an obligation to pay money to

the trustee. The increment in value of a bond or other obligation for

the payment of money bearing no stated interest but payable or

redeemable at maturity or at a future time at an amount in excess of the

amount in consideration of which it was issued is income. If the income

accrues pursuant to a fixed schedule of appreciation, such income is

distributable to the beneficiary at the time the increment occurs, and

the trustee may transfer the amount thereof from principal to income on

each such date. Whenever unrealized increment is distributed as income

but out of principal the principal shall be reimbursed from the income

when realized.

(c) This section does not apply to an obligation to which 11-A-4.9,

11-A-4.10, 11-A-4.11, 11-A-4.12, 11-A-4.14, or 11-A-4.15 applies.