Question

The 1997 Revision of the Uniform Principal & Income Act allocates or apportions amounts received from the sale of Timber:

a. 90% to principal, 10% to income
b. To income to the extent that the amount of timber removed from the land does not exceed the rate of growth of the timber during the accounting periods in which a beneficiary has a mandatory income interest; to principal to the extent that the amount of timber removed from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber
c. 10% to principal, 90% to income
d. 100% to principal
e. 100% to income

Answer 1

The 1997 Revision of the Uniform Principal & Income Act allocates or apportions amounts received from the sale of timber based on the rate of growth of the timber and the beneficiary's mandatory income interest.

Step-by-step explanation:

The subject of this question is law, specifically the 1997 Revision of the Uniform Principal & Income Act and its allocation or apportionment of amounts received from the sale of Timber.

The answer to this question is option b. According to the 1997 Revision of the Uniform Principal & Income Act, the allocation or apportionment of amounts received from the sale of Timber depends on the rate of growth of the timber and the beneficiary's mandatory income interest. If the amount of timber removed from the land does not exceed the rate of growth of the timber, it is allocated to income. If the amount of timber removed exceeds the rate of growth, or if the net receipts are from the sale of standing timber, it is allocated to principal.

For example, let's say a beneficiary has a mandatory income interest and the rate of growth of the timber is 5% per year. If 4% of the timber is removed during the accounting period, it would be allocated to income. However, if 6% of the timber is removed, it would be allocated to principal.