{"data":{"id":"us-nc/n.c.-gen.-stat.-37a-5-505","jurisdiction":"us-nc","citation":"N.C. Gen. Stat. § 37A-5-505","heading":"Income taxes.","body":"(a)\tA tax required to be paid by a trustee based on receipts allocated to income shall be paid from income.\n(b)\tA 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 tax by the taxing authority.\n(c)\tA tax required to be paid by a trustee on the trust's share of an entity's taxable income shall be paid:\n(1)\tFrom income to the extent that receipts from the entity are only allocated to income;\n(2)\tFrom principal to the extent receipts from the entity are only allocated to principal;\n(3)\tProportionately from principal and income to the extent that receipts from the entity are allocated to both income and principal; and\n(4)\tFrom principal to the extent that the tax exceeds the total receipts from the entity.\n(d)\tAfter 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. (2003-232, s. 2; 2010-181, s. 4.)","path":["Chapter 37A. Uniform Principal and Income Act.","Article 5. Allocation of Disbursements During Administration of Trust."],"source_url":"https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_37A/GS_37A-5-505.html","current_through":"S.L. 2026-30","vintage":"","retrieved_at":"2026-08-27T18:01:42Z","sha256":"dca8ff5d57d373317a3db399f6d2b296ebaf65dd525fcb4504760f5ccfc220d6","source_id":"us-nc","stale":false,"prev":"us-nc/n.c.-gen.-stat.-37a-5-504","next":"us-nc/n.c.-gen.-stat.-37a-5-506"},"notice":"GroundRules: Original legal text. Not legal advice."}