N.Y. Estates, Powers & Trusts Law § 11-a-5.5: Income taxes

§ 11-A-5.5 Income taxes

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

to income must be paid from income.

(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 proportionately:

(1) from income to the extent that receipts from the entity are

allocated to income; and

(2) from principal to the extent that:

(A) receipts from the entity are allocated to principal; and

(B) the trust's share of the entity's taxable income exceeds the total

receipts described in subparagraph (1) and clause (A).

(d) For purposes of this section, receipt allocated to principal or

income must be reduced by the amount distributed to a beneficiary from

principal or income for which the trust receives a deduction in

calculating the tax.