§ 8155. Asset-backed securities.

348 words·~2 min read·/pa/title-20/chapter-81/8155

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)General rule.-- If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets:

(1)The trustee shall allocate to income the portion of the payment which the payor identifies as being from interest or other current return.

(2)The trustee shall allocate the balance of the payment to principal.

(b)Allocation where liquidating trust's interest in security.--

(1)If a trust receives one or more payments in exchange for the trust's entire interest in an asset-backed security in one accounting period, the trustee shall allocate the payments to principal.

(2)If a payment is one of a series of payments which will result in the liquidation of the trust's interest in the security over more than one accounting period, the trustee shall allocate:

(i)ten percent of the payment to income; and

(ii)the balance to principal.

(c)Definition.-- As used in this section, the term "asset-backed security" means an asset the value of which is based upon the right it gives the owner to receive distributions from the proceeds of financial assets which provide collateral for the security. The term includes an asset which gives the owner the right to receive from the collateral financial assets only the interest or other current return or only the proceeds other than interest or current return. The term does not include an asset to which section 8141 (relating to character of receipts) or 8149 (relating to retirement benefits, individual retirement accounts, deferred compensation, annuities and similar payments) applies.

20c8155v

Cross References. Section 8155 is referred to in sections 8141, 8142, 8144, 8146, 8148, 8150 of this title.

20c8161h

SUBCHAPTER E

ALLOCATION OF DISBURSEMENTS DURING

ADMINISTRATION OF TRUST

Sec.

8161. Mandatory disbursements from income.

8162. Mandatory disbursements from principal.

8163. Discretionary allocation of disbursements.

8164. Transfers from income to principal for depreciation.

8165. Transfers from income to reimburse principal.

8166. Income taxes.

8167. Adjustments between principal and income because of taxes.

Cross References. Subchapter E is referred to in sections 8121, 8149 of this title.

20c8161s