Principal and Income Law

Question 1

Examples of Income Credits

Answer 1

Rental Income
Interest Earned
Cash Dividends from Stocks
Business income

Question 2

Examples of Income Charges

Answer 2

Income taxes due on trust income
Ordinary repairs or maintenance of trust property
Portion of fees and expenses

Question 3

Examples of Principal Credits

Answer 3

Capital Gains
Insurance proceeds
Stock dividends
Sales proceeds-cash resulting from sale of a principal asset
Proceeds from eminent domain seizure

Question 4

Examples of Principal Debits

Answer 4

Portions of fees and expenses
Fees for purchase/sale of asset
Captain gain taxes

Question 5

Order of source of principal and income definition

Answer 5

1) Document/agreement
2) State Law
3) Judicial Interpretation

Question 6

Sustainable Unitrust Payout Percentages

Answer 6

Highest Confidence Interval: 3-5%