{"data":{"id":"us-ky/krs-386.470","jurisdiction":"us-ky","citation":"KRS 386.470","heading":"Principal receipts.","body":"A trustee shall allocate to principal:\n(1) To the extent not allocated to income under KRS 386.450 to 386.504, assets\nreceived from a transferor during the transferor's lifetime, a decedent's estate, a trust\nwith a terminating income interest, or a payer under a contract naming the trust or\nits trustee as beneficiary;\n(2) Money or other property received from the sale, exchange, liquidation, or change in\nform of a principal asset, including stock splits and realized profit, subject to this\narticle;\n(3) Amounts recovered from third parties to reimbur se the trust because of\ndisbursements described in KRS 386.492(1)(g) or for other reasons to the extent not\nbased on the loss of income;\n(4) Proceeds of property taken by eminent domain, but a separate award made for the\nloss of income with respect to an a ccounting period during which a current income\nbeneficiary had a mandatory income interest is income;\n(5) Net income received in an accounting period during which there is no beneficiary to\nwhom a trustee may or shall distribute income;\n(6) If a trustee gr ants an option to buy property from the trust, whether or not the trust\nowns the property when the option is granted, grants an option that permits another\nperson to sell property to the trust, or acquires an option to buy property for the trust\nor an option to sell an asset owned by the trust, and the trustee or other owner of the\nasset is required to deliver the asset if the option is exercised, an amount received\nfor granting the option shall be allocated to principal. An amount paid to acquire the\noption shall be paid from principal. A gain or loss realized upon the exercise of an\noption, including an option granted to a settlor of the trust for services rendered,\nshall be allocated to principal; and\n(7) Other receipts as provided in KRS 386.478, 386.480 , 386.482, 386.484, 386.486,\nand 386.488.","path":["KRS Chapter 386"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=35927","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:16Z","sha256":"90852acd832ca549219859351c635bbc8fca1c5284bb95df8490fd8956e85544","source_id":"us-ky","stale":false,"prev":"us-ky/krs-386.468","next":"us-ky/krs-386.472"},"notice":"GroundRules: Original legal text. Not legal advice."}