72-34-405. When right to income arises -- apportionment of income. (1) An income beneficiary is entitled to income from the date specified in the trust instrument or, if none is specified, from the date an item of property becomes subject to the trust. In the case of an item of property becoming subject to a trust by reason of a person's death, it becomes subject to the trust as of the date of the death of the person even though there is an intervening period of administration of the person's estate.
     (2) Upon property becoming subject to a trust by reason of a person's death:
     (a) Receipts due but not paid at the date of death of the person are principal.
     (b) Receipts in the form of periodic payments (other than corporate distributions to stockholders), including rent, interest, or annuities, not due at the date of the death of the person shall be treated as accruing from day to day. That portion of the receipt accruing before the date of death is principal and the balance is income.
     (3) In all other cases, any receipt from income-producing property is income even though the receipt was earned or accrued in whole or in part before the date when the property became subject to the trust.
     (4) On termination of an income interest, the income beneficiary whose interest is terminated, or his or her estate, is entitled to income:
     (a) undistributed on the date of termination;
     (b) due but not paid to the trustee on the date of termination; and
     (c) in the form of periodic payments (other than corporate distributions to stockholders), including rent, interest, or annuities, not due on the date of termination, accrued from day to day.
     (5) Corporate distributions to stockholders shall be treated as due on the day fixed by the corporation for determination of stockholders of record entitled to distribution or, if no date is fixed, on the date of declaration of the distribution by the corporation.

     History: En. Sec. 142, Ch. 685, L. 1989.