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2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8131 - When right to income begins and ends

§ 8131. When right to income begins and ends.
(a) Accrual of income interest.--
An income beneficiary is entitled to net income from the date on which the income interest begins. An income interest begins:
(1) on the date specified in the governing instrument; or
(2) if no date is specified, on the date an asset becomes subject to a trust or successive income interest.
(b) Asset subject to a trust.--
An asset becomes subject to a trust:
(1) on the date it is transferred to the trust in the case of an asset which is transferred to a trust during the transferor's life;
(2) on the date of a testator's death in the case of an asset which becomes subject to a trust by reason of a will, even if there is an intervening period of administration of the testator's estate; or
(3) on the date of an individual's death in the case of an asset which is transferred to a fiduciary by a third party because of the individual's death.
(c) Asset subject to a successive income interest.--
An asset becomes subject to a successive income interest on the day after the preceding income interest ends, as determined under subsection (d), even if there is an intervening period of administration to wind up the preceding income interest.
(d) End of income interest.--
An income interest ends on:
(1) the day before an income beneficiary dies or another terminating event occurs; or
(2) the last day of a period during which there is no beneficiary to whom a trustee may distribute income.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8132 - Apportionment of receipts and disbursements when decedent dies or income interest begins

§ 8132. Apportionment of receipts and disbursements when decedent dies or income interest begins.
(a) Allocation to principal.--
Unless section 8121(1) (relating to determination and distribution of net income) applies, a trustee shall allocate an income receipt or disbursement to principal if its due date occurs before:
(1) a decedent dies in the case of an estate; or
(2) an income interest begins in the case of a trust or successive income interest.
(b) Allocation to income.--
A trustee shall allocate an income receipt or disbursement to income if its due date occurs on or after the date on which a decedent dies or an income interest begins and it is a periodic due date. An income receipt or disbursement must be treated as accruing from day to day if its due date is not periodic or it has no due date. The portion of the receipt or disbursement accruing before the date on which a decedent dies or an income interest begins must be allocated to principal and the balance must be allocated to income.
(c) Due dates.--
An item of income or an obligation is due on the date the payor is required to make a payment. If a payment date is not stated, there is no due date for the purposes of this chapter. Distributions to shareholders or other owners from an entity to which section 8141 (relating to character of receipts) applies are deemed to be due on the date fixed by the entity for determining who is entitled to receive the distribution or, if no date is fixed, on the declaration date for the distribution. A due date is periodic for receipts or disbursements that must be paid at regular intervals under a lease or an obligation to pay interest or if an entity customarily makes distributions at regular intervals.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8133 - Apportionment when income interest ends

§ 8133. Apportionment when income interest ends.
(a) End of mandatory income interest.--
When a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date, or the estate of a deceased mandatory income beneficiary whose death causes the interest to end, the beneficiary's share of the undistributed income which is not disposed of under the governing instrument unless the beneficiary has an unqualified power to revoke more than 5% of the trust immediately before the income interest ends. In the latter case, the undistributed income from the portion of the trust that may be revoked shall be added to principal.
(b) Proration of final payment.--
When a trustee's obligation to pay a fixed annuity or a fixed fraction of the value of the trust's assets ends, the trustee shall prorate the final payment if and to the extent required by applicable law to accomplish a purpose of the trust or its settlor or testator relating to income, gift, estate or other tax requirements.
(c) Definition.--
As used in this section, the term "undistributed income" means net income received before the date on which an income interest ends. The term does not include an item of income or expense which is due or accrued or net income which has been added or is required to be added to principal under the governing instrument.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8141 - Character of receipts

§ 8141. Character of receipts.
(a) Allocation to income.--
Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity, including reinvested cash dividends.
(b) Allocation to principal.--
A trustee shall allocate the following receipts from an entity to principal:
(1) Property other than money, excluding reinvested cash dividends.
(2) Money received in one distribution or a series of related distributions in exchange for part or all of a trust's interest in the entity.
(3) Money received in total or partial liquidation of the entity.
(4) Money received from an entity that is a regulated investment company or a real estate investment trust if the money distributed is a short-term or long-term capital gain dividend for Federal income tax purposes.
(c) When received in partial liquidation.--
Money is received in partial liquidation:
(1) to the extent that the entity, at or near the time of a distribution, indicates that it is a distribution in partial liquidation; or
(2) if the total amount of money and property distributed by the entity to its owners in one distribution or a series of related distributions is greater than 20% of the entity's gross assets, as shown by the entity's year-end financial statements immediately preceding the initial receipt.
(d) When not received in partial liquidation.--
Money is not received in partial liquidation nor may it be taken into account under subsection (c)(2) to the extent that it does not exceed the amount of income tax that a trust beneficiary must pay on taxable income of the entity that distributes the money.
(e) Reliance upon a statement.--
A trustee may rely upon a statement made by an entity about the source or character of a distribution if the statement is made at or near the time of distribution by the entity's board of directors or other person or group of persons authorized to exercise powers to pay money or transfer property comparable to those of a corporation's board of directors.
(f) Definition.--
As used in this section, the term "entity" means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund or any other organization in which a trustee has an interest other than:
(1) a trust or estate to which section 8142 (relating to distribution from trust or estate) applies;
(2) a business or activity to which section 8143 (relating to business and other activities conducted by trustee) applies;
(3) a payment to which section 8149 (relating to retirement benefits, individual retirement accounts, deferred compensation, annuities and similar payments) applies; or
(4) an asset-backed security to which section 8155 (relating to asset-backed securities) applies.
(July 7, 2006, P.L.625, No.98, eff. 60 days)
2006 Amendment.
Act 98 amended subsecs. (c) and (d).
Cross References.
Section 8141 is referred to in sections 8132, 8142, 8155 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8142 - Distribution from trust or estate

§ 8142. Distribution from trust or estate.
A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest and shall allocate to principal an amount received as a distribution of principal from such a trust or estate. If a trustee purchases an interest in a trust that is an investment entity or a decedent or donor transfers an interest in such a trust to a trustee, section 8141 (relating to character of receipts) or 8155 (relating to asset-backed securities) applies to a receipt from the trust.
Cross References.
Section 8142 is referred to in section 8141 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8143 - Business and other activities conducted by trustee

§ 8143. Business and other activities conducted by trustee.
(a) Separate accounting for business or activity.--
If a trustee that conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or activity instead of accounting for it as part of the trust's general accounting records, the trustee may maintain separate accounting records for its transactions, whether or not its assets are segregated from other trust assets.
(b) Net receipts.--
(1) A trustee that accounts separately for a business or other activity may determine the extent to which:
(i) its net cash receipts must be retained for working capital, the acquisition or replacement of fixed assets and other reasonably foreseeable needs of the business or activity; and
(ii) the remaining net cash receipts are accounted for as principal or income in the trust's general accounting records.
(2) If a trustee sells assets of the business or other activity, other than in the ordinary course of the business or activity, the trustee shall account for the net amount received as principal in the trust's general accounting records to the extent the trustee determines that the amount received is no longer required in the conduct of the business.
(c) Permissible activities for separate accounting.--
Activities for which a trustee may maintain separate accounting records include:
(1) Retail, manufacturing, service and other traditional business activities.
(2) Farming.
(3) Raising and selling livestock and other animals.
(4) Management of rental properties.
(5) Extraction of minerals and other natural resources.
(6) Timber operations.
(7) Activities to which section 8154 (relating to derivatives and options) applies.
Cross References.
Section 8143 is referred to in sections 8141, 8147, 8154, 8164 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8144 - Principal receipts

§ 8144. Principal receipts.
A trustee shall allocate to principal any of the following:
(1) To the extent not allocated to income under this chapter, assets received from:
(i) a transferor during the transferor's lifetime;
(ii) a decedent's estate;
(iii) a trust with a terminating income interest; or
(iv) a payor under a contract naming the trust or its trustee as beneficiary.
(2) Money or other property received from a principal asset's sale, exchange, liquidation or change in form. This paragraph includes realized profit subject to this subchapter.
(3) Amounts recovered from third parties to reimburse the trust because of disbursements described in section 8162(a)(8) (relating to mandatory disbursements from principal) or for other reasons to the extent not based on the loss of income.
(4) Proceeds of property taken by eminent domain. A separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest is income.
(5) Net income received in an accounting period during which there is no beneficiary to whom a trustee may or must distribute income.
(6) Other receipts as provided in sections 8148 (relating to insubstantial allocations not required) through 8155 (relating to asset-backed securities).
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8145 - Rental property

§ 8145. Rental property.
(a) Rent.--
To the extent that a trustee accounts for receipts from rental property pursuant to this section, the trustee shall allocate to income an amount received as rent of real or personal property. This subsection includes an amount received for cancellation or renewal of a lease.
(b) Deposit.--
An amount received as a refundable deposit, including a security deposit or a deposit which is to be applied as rent for future periods:
(1) shall be added to principal;
(2) shall be held subject to the terms of the lease; and
(3) is not available for distribution to a beneficiary until the trustee's contractual obligations have been satisfied with respect to that amount.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8146 - Obligation to pay money

§ 8146. Obligation to pay money.
(a) Interest allocated to income.--
An amount received as interest, whether determined at a fixed, variable or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, shall be allocated to income without any provision for amortization of premium.
(b) Allocation of obligations.--
A trustee shall allocate to principal an amount received from the sale, redemption or other disposition of an obligation to pay money to the trustee more than one year after it is purchased or acquired by the trustee, including an obligation the purchase price or value of which when it is acquired is less than its value at maturity. If the obligation matures within one year after it is purchased or acquired by the trustee, an amount received in excess of its purchase price or its value when acquired by the trust shall be allocated to income.
(c) Application.--
This section does not apply to an obligation to which any of the following apply:
(1) Section 8149 (relating to retirement benefits, individual retirement accounts, deferred compensation, annuities and similar payments).
(2) Section 8150 (relating to liquidating asset).
(3) Section 8151 (relating to minerals, water and other natural resources).
(4) Section 8152 (relating to timber).
(5) Section 8154 (relating to derivatives and options).
(6) Section 8155 (relating to asset-backed securities).
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8147 - Insurance policies and similar contracts

§ 8147. Insurance policies and similar contracts.
(a) General rule.--
(1) Except as otherwise provided in subsection (b) or (c), a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary. This paragraph includes a contract which insures the trust or its trustee against loss for damage to, destruction of or loss of title to a trust asset.
(2) If the premiums on the policy or contract are paid from income, the trustee shall allocate to income dividends on the policy or contract.
(3) If the premiums on the policy or contract are paid from principal, the trustee shall allocate to principal dividends on the policy or contract.
(b) Allocation of proceeds to income.--
Except as provided in subsection (c), a trustee shall allocate to income proceeds of a contract which insures the trustee against any of the following:
(1) Loss of occupancy or other use by an income beneficiary.
(2) Loss of income.
(3) Subject to section 8143 (relating to business and other activities conducted by trustee), loss of profits from a business.
(c) Application.--
This section does not apply to a contract to which section 8149 (relating to retirement benefits, individual retirement accounts, deferred compensation, annuities and similar payments) applies.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8148 - Insubstantial allocations not required

§ 8148. Insubstantial allocations not required.
If a trustee determines that an allocation between principal and income required by section 8149 (relating to retirement benefits, individual retirement accounts, deferred compensation, annuities and similar payments), 8150 (relating to liquidating asset), 8151 (relating to minerals, water and other natural resources), 8152 (relating to timber) or 8155 (relating to asset-backed securities) is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in section 8104(c) (relating to trustee's power to adjust) applies to the allocation. This power may be exercised by a co-trustee in the circumstances described in section 8104(d) and may be released for the reasons and in the manner described in section 8104(e). An allocation is presumed to be insubstantial if:
(1) the amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than 5%; or
(2) the value of the asset producing the receipt for which the allocation would be made is less than 5% of the total value of the trust's assets at the beginning of the accounting period.
Cross References.
Section 8148 is referred to in section 8144 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8150 - Liquidating asset

§ 8150. Liquidating asset.
(a) Allocation.--
A trustee shall allocate to income 10% of the receipts from a liquidating asset and the balance to principal.
(b) Definition.--
As used in this section, the term "liquidating asset" means an asset the value of which will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes a leasehold, patent, copyright, royalty right and right to receive payments during a period of more than one year under an arrangement which does not provide for the payment of interest on the unpaid balance. The term does not include any of the following:
(1) A payment subject to section 8149 (relating to retirement benefits, individual retirement accounts, deferred compensation, annuities and similar payments).
(2) Resources subject to section 8151 (relating to minerals, water and other natural resources).
(3) Timber subject to section 8152 (relating to timber).
(4) An activity subject to section 8154 (relating to derivatives and options).
(5) An asset subject to section 8155 (relating to asset-backed securities).
(6) An asset for which the trustee establishes a reserve for depreciation under section 8163 (relating to discretionary allocation of disbursements).
Cross References.
Section 8150 is referred to in sections 8144, 8146, 8148, 8149 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8151 - Minerals, water and other natural resources

§ 8151. Minerals, water and other natural resources.
(a) Allocation for receipts from minerals and other natural resources.--
To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources under this section, the trustee shall allocate them as follows:
(1) If received as nominal delay rental or nominal annual rent on a lease, a receipt shall be allocated to income.
(2) If received from a production payment, a receipt shall be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance shall be allocated to principal.
(3) If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus or delay rental is more than nominal:
(i) sixty-six and two-thirds percent shall be allocated to principal; and
(ii) the balance shall be allocated to income.
(4) If an amount is received from a working interest or any other interest not provided for in paragraph (1), (2) or (3):
(i) sixty-six and two-thirds percent of the net amount received shall be allocated to principal; and
(ii) the balance shall be allocated to income.
(b) Allocation for receipts from water.--
(1) An amount received on account of an interest in renewable water shall be allocated to income.
(2) An amount received on account of an interest in nonrenewable water shall be allocated as follows:
(i) Sixty-six and two-thirds percent of the amount shall be allocated to principal.
(ii) The balance shall be allocated to income.
(c) Application.--
This chapter applies whether or not a decedent or donor was extracting minerals, water or other natural resources before the interest became subject to the trust.
Cross References.
Section 8151 is referred to in sections 8121, 8144, 8146, 8148, 8150 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8152 - Timber

§ 8152. Timber.
(a) Allocation of net receipts.--
To the extent that a trustee accounts for receipts from the sale of timber and related products under this section, the trustee shall allocate the net receipts:
(1) 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.
(2) To principal to the extent that:
(i) the amount of timber removed from the land exceeds the rate of growth of the timber; or
(ii) the net receipts are from the sale of standing timber.
(3) To or between income and principal, by determining the amount of timber removed from the land under the lease or contract and applying the rules in paragraphs (1) and (2) if the net receipts are from:
(i) the lease of timberland; or
(ii) a contract to cut timber from land owned by a trust.
(4) To principal to the extent that advance payments, bonuses and other payments are not allocated under paragraph (1), (2) or (3).
(b) Determining net receipts.--
In determining net receipts to be allocated under subsection (a), a trustee shall deduct and transfer to principal a reasonable amount for depletion.
(c) Application.--
This chapter applies whether or not a decedent or transferor was harvesting timber from the property before it became subject to the trust.
Cross References.
Section 8152 is referred to in sections 8121, 8144, 8146, 8148, 8150 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8153 - Property not productive of income

§ 8153. Property not productive of income.
(a) General rule.--
If a Federal estate or gift tax marital deduction is allowed for all or part of a trust whose income is required to be paid to the settlor's or testator's spouse and whose assets consist substantially of property that does not provide the spouse with sufficient income from or use of the trust assets, and if the amounts that the trustee transfers from principal to income under section 8104 (relating to trustee's power to adjust) and that the trustee distributes to the spouse from principal pursuant to the governing instrument are insufficient to provide the spouse with the beneficial enjoyment required to obtain the marital deduction, the spouse may require the trustee to make property productive of income, convert property within a reasonable time or exercise the power conferred by section 8104(a). The trustee may decide which action or combination of actions to take.
(b) Other cases.--
In cases not governed by subsection (a), proceeds from the sale or other disposition of an asset are principal without regard to the amount of income the asset produces during any accounting period.
Cross References.
Section 8153 is referred to in section 8144 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8154 - Derivatives and options

§ 8154. Derivatives and options.
(a) Derivatives.--
To the extent that a trustee does not account under section 8143 (relating to business and other activities conducted by trustee) for transactions in derivatives, the trustee shall allocate to principal receipts from and disbursements made in connection with those transactions.
(b) Options.--
If a trustee grants an option to buy property from the trust, whether or not the trust owns the property when the option is granted, grants an option that permits another person to sell property to the trust or acquires an option to buy property for the trust or an option to sell an asset owned by the trust, and the trustee or other owner of the asset is required to deliver the asset if the option is exercised, an amount received for granting the option must be allocated to principal. An amount paid to acquire the option must be paid from principal. A gain or loss realized upon the exercise of an option, including an option granted to a settlor or testator of the trust for services rendered, must be allocated to principal.
(c) Definition.--
As used in this section, "derivative" means a contract or financial instrument or a combination of contracts and financial instruments which gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asset or group of assets, or changes in a rate, an index of prices or rates, or other market indicator for an asset or a group of assets.
Cross References.
Section 8154 is referred to in sections 8143, 8144, 8146, 8150 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8155 - Asset-backed securities

§ 8155. Asset-backed securities.
(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.
Cross References.
Section 8155 is referred to in sections 8141, 8142, 8144, 8146, 8148, 8150 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8161 - Mandatory disbursements from income

§ 8161. Mandatory disbursements from income.
A trustee shall make the following disbursements from income:
(1) Interest, except interest on death taxes.
(2) Ordinary repairs.
(3) Real estate and other regularly recurring taxes assessed against principal.
(4) Recurring premiums on fire or other insurance covering the loss of a principal asset or the loss of income from or use of the asset.
Cross References.
Section 8161 is referred to in sections 8162, 8163, 8165 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8162 - Mandatory disbursements from principal

§ 8162. Mandatory disbursements from principal.
(a) Mandatory disbursements.--
A trustee shall make the following disbursements from principal:
(1) Extraordinary expenses incurred in connection with the administration, management or preservation of trust property and the distribution of income.
(2) Extraordinary repairs.
(3) Compensation for legal services to the trustee.
(4) Expenses in connection with accountings and judicial or other proceedings. This paragraph includes proceedings to construe, modify or reform the trust or to protect the trust or its property.
(5) Payments on the principal of a trust debt.
(6) Premiums paid on a policy of insurance not described in section 8161(4) (relating to mandatory disbursements from income) of which the trust is the owner and beneficiary.
(7) Estate, inheritance and other transfer taxes, including interest and penalties, apportioned to the trust.
(8) Disbursements related to environmental matters. This paragraph includes:
(i) Reclamation.
(ii) Assessing environmental conditions.
(iii) Remedying and removing environmental contamination.
(iv) Monitoring remedial activities and the release of substances.
(v) Preventing future releases of substances.
(vi) Collecting amounts from persons liable or potentially liable for the costs of those activities.
(vii) Penalties imposed under environmental statutes or regulations and other payments made to comply with those statutes or regulations.
(viii) Statutory or common law claims by third parties.
(ix) Defending claims based on environmental matters.
(b) Mandatory reimbursement.--
If a principal asset is encumbered with an obligation which requires income from that asset to be paid directly to the creditor, the trustee shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.
Cross References.
Section 8162 is referred to in sections 8144, 8163 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8163 - Discretionary allocation of disbursements

§ 8163. Discretionary allocation of disbursements.
Subject to sections 8161 (relating to mandatory disbursements from income) and 8162 (relating to mandatory disbursements from principal), a trustee may, in the trustee's discretion, allocate to income or principal or partly to each ordinary expenses incurred in connection with the administration, management or preservation of trust property and the distribution of income, including, but not limited to, the compensation of the trustee and of any person providing investment advisory, custodian or income tax return preparation services to the trustee.
Cross References.
Section 8163 is referred to in sections 8150, 8165 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8164 - Transfers from income to principal for depreciation

§ 8164. Transfers from income to principal for depreciation.
(a) Transfers.--
A trustee may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation. However, a trustee may not transfer any amount for depreciation:
(1) of that portion of real property used or available for use by a beneficiary as a residence or of tangible personal property held or made available for the personal use or enjoyment of a beneficiary;
(2) during the administration of a decedent's estate; or
(3) under this section if the trustee is accounting under section 8143 (relating to business and other activities conducted by trustee) for the business or activity in which the asset is used.
(b) Separate fund unnecessary for amount transferred.--
An amount transferred to principal need not be held as a separate fund.
(c) Definition.--
As used in this section, the term "depreciation" means a reduction in value due to wear, tear, decay, corrosion or gradual obsolescence of a fixed asset having a useful life of more than one year.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8165 - Transfers from income to reimburse principal

§ 8165. Transfers from income to reimburse principal.
(a) Permissible reimbursements.--
A trustee may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or to provide a reserve for future disbursements if the trustee makes or expects to make a disbursement from principal which is allocable to income under section 8161 (relating to mandatory disbursements from income) or 8163 (relating to discretionary allocation of disbursements) and which:
(1) is paid from principal because it is unusually large; or
(2) is made to prepare property for rental, including tenant allowances, leasehold improvements and broker's commissions.
(b) Continued transfers.--
If the asset whose ownership gives rise to the disbursements becomes subject to a successive income interest after an income interest ends, a trustee may continue to transfer amounts from income to principal as provided in subsection (a).
(c) Application.--
This section shall not apply to the extent the trustee has been or expects to be reimbursed by a third party.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8166 - Income taxes

§ 8166. Income taxes.
(a) Receipts allocated to income.--
A tax required to be paid by a trustee based on receipts allocated to income shall be paid from income.
(b) Receipts allocated to principal.--
A 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.
(c) Tax on entity's taxable income.--
A tax required to be paid by a trustee on the trust's share of an entity's taxable income shall be paid proportionately:
(1) from income to the extent that receipts from the entity are allocated to income; and
(2) from principal to the extent that:
(i) receipts from the entity are allocated to principal; and
(ii) the trust's share of the entity's taxable income exceeds the total receipts described in paragraph (1) and subparagraph (i).
(d) Reductions in receipts allocated to principal or income.--
For purposes of this section, receipts allocated to principal or income shall be reduced by the amount distributed to a beneficiary from principal or income for which the trust receives a deduction in calculating the tax.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8167 - Adjustments between principal and income because of taxes

§ 8167. Adjustments between principal and income because of taxes.
A trustee may make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder beneficiaries which arise from any of the following:
(1) An election or decision which the trustee makes regarding tax matters.
(2) An income tax or any other tax which is imposed upon the trustee or a beneficiary as a result of a transaction involving the trust or distribution from the trust.
(3) The ownership by a trust of an interest in an entity the taxable income of which, whether or not distributed, is includable in the taxable income of the trust or a beneficiary.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 81 - Principal and Income › Section 8191 - Uniformity of application and construction

§ 8191. Uniformity of application and construction.
In applying and construing this chapter, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states which enact it.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 82 - Revised Price Act (Repealed) › Section 8201 - § 8234 - (Repealed)

1974 Repeal.
Chapter 82 (§§ 8201 - 8234) was added June 30, 1972, P.L.508, No.164, and repealed December 10, 1974, P.L.867, No.293, effective immediately. The subject matter is now contained in Chapter 83 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 83 - Inalienable Property › Section 8301 - Powers of court to authorize sale, etc. of real property

§ 8301. Powers of court to authorize sale, etc. of real property.
The court of common pleas, operating through its appropriate division, may authorize the sale, mortgage, lease or exchange of real property or grant declaratory relief with respect to real property:
(1) Where the legal title is held:
(i) by a person whose spouse is an incapacitated person, or has abandoned him or her for one year, or has been absent in circumstances from which the law would presume his or her decease;
(ii) by a tenant of an estate by entireties, when the other tenant of such estate has been absent in circumstances from which the law would presume his or her decease;
(iii) by corporations of any kind having no capacity to convey, or by any unincorporated association;
(iv) by any religious, beneficial, or charitable society or association, incorporated or unincorporated, whose title is subject to forfeiture if real property is held in excess of the amount authorized by law; or
(v) by any religious, beneficial or charitable society or association, incorporated or unincorporated, whose title is subject to reversion, possibility of reverter or right of reentry for condition broken if the real property ceases to be used for a purpose specified in a deed, subject to the following:
(A) A petition to declare the real property free from reversion, possibility of reverter or right of reentry shall contain an affidavit of an officer of the religious, beneficial or charitable society or association, stating in detail what reasonable efforts have been made to locate or contact the grantor or the grantor's heirs, successors or assigns to obtain a conveyance of the reversion, possibility of reverter or right of reentry, why the real property should be declared free of the reversion, possibility of reverter or right of reentry, and the use of the funds, if any, to be derived from sale of the real property.
(B) The court shall have the power to consider all of the circumstances and to grant such equitable relief as shall be just and proper and impose such restrictions upon the use of the funds to be derived from the sale of real property as the court shall deem to be appropriate to further the religious, beneficial or charitable purpose reflected in the deed containing the reversion, possibility of reverter or right of reentry for condition broken.
(2) Where the legal title is an estate tail, or is subject to contingent remainders, executory interests, or remainders to a class some or all of whom may not be in being or ascertained at the time of the entry of the decree.
(3) Where the legal title is otherwise inalienable.
(Apr. 16, 1992, P.L.108, No.24, eff. 60 days; Dec. 16, 1992, P.L.1163, No.152, eff. imd.)
1992 Amendments.
See section 21 of Act 24 in the appendix to this title for special provisions relating to applicability. See section 27(b) of Act 152 in the appendix to this title for special provisions relating to applicability.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 83 - Inalienable Property › Section 8302 - Venue where real property is wholly in one county

§ 8302. Venue where real property is wholly in one county.
In all proceedings under the provisions of this chapter involving real property lying wholly within one county the petition shall be presented only in the court of that county.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 83 - Inalienable Property › Section 8303 - Venue where real property is in more than one county

§ 8303. Venue where real property is in more than one county.
In all proceedings under the provisions of this chapter involving real property through which the line dividing two or more counties runs, the court of the county in which the residence is situated; or, if there be no residence, the court of the county where the principal improvements may be; or, if there be no improvements, the court of either county, may exercise jurisdiction as to the whole of such real property, irrespective of the county line; and its decree relating to that real property shall be as effectual as if the whole of that real property had been within the county whereof said court has jurisdiction. A certified copy of all proceedings shall be recorded in the office of the recorder of deeds of each county in which any of the real property is situated.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 83 - Inalienable Property › Section 8304 - Procedure

§ 8304. Procedure.
All jurisdiction conferred by this chapter shall be exercised on the petition of any party in interest, upon such terms and upon such security and after such notice as the court shall direct by general rule or special order.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 83 - Inalienable Property › Section 8305 - Sale of real property subject to future inalienable interests; disposition of proceeds

§ 8305. Sale of real property subject to future inalienable interests; disposition of proceeds.
Where real property is held by a person or persons subject to future interests in a person or persons unborn, unascertained or not sui juris and it shall appear to the court that it would be to the interests of such persons having future interests that the real property should be sold, mortgaged, leased or exchanged, the court, upon the application of any party in interest, may appoint a trustee to sell, mortgage, lease or exchange the real property and to receive the proceeds and hold them in trust for such present and future interests as shall be directed by the court.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 83 - Inalienable Property › Section 8306 - Title of purchaser

§ 8306. Title of purchaser.
If such bond, if any, as has been required by the court, has been given, the title acquired through any sale, mortgage, lease or exchange made pursuant to a decree of the court shall be indefeasible by any person ascertained or unascertained, or any class of persons, referred to in the petition or decree and having a present or expectant interest in the property, and shall be unprejudiced by any error in the proceedings. No party who pays cash or other consideration pursuant to the decree shall be liable to see to the proper application thereof, nor shall he be in any manner subject to any trust limitation on, or defect in, the title set out in the petition or decree. Any sale or exchange under this chapter shall have the effect of a judicial sale as to the discharge of liens, but the court may decree a sale or exchange freed and discharged from the lien of any mortgage otherwise preserved from discharge by existing law, if the holder of such mortgage shall so consent by writing filed in the proceeding.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 84 - Military Service › Section 8401 - § 8407 - (Repealed)

1974 Repeal.
Subchapter A (§§ 8401 - 8407) was repealed December 10, 1974, P.L.896, No.294, effective immediately. The subject matter is now covered in Chapter 43 of this title.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 84 - Military Service › Section 8411 - Notice of action to United States Veterans' Bureau

§ 8411. Notice of action to United States Veterans' Bureau.
In any action brought under any law of this Commonwealth for the appointment of a committee or guardian for a veteran of any war, or a minor child, or incapacitated dependent of a veteran of any war, on whose account benefits of compensation or insurance or other gratuity is payable by the United States Veterans' Bureau, or its successor, or upon the filing of any petition or account by any such committee or guardian of any such person, notice of such action, or of the filing of such petition or account, and of the hearing thereon, shall be mailed the attorney of the United States Veterans' Bureau office having jurisdiction over such person. In all such cases, the United States Veterans' Bureau, or its successor, shall be a party in interest, and a certified copy of each account filed in the court shall be supplied the said bureau by the committee or guardian.
(Apr. 16, 1992, P.L.108, No.24, eff. 60 days)
1992 Amendment.
See section 21 of Act 24 in the appendix to this title for special provisions relating to applicability.
Saved from Suspension.
Pennsylvania Rule of Civil Procedure No. 2248, as amended June 3, 1994, provided that section 8411 shall not be deemed suspended or affected by Rules 2226 through 2232 relating to joinder of parties.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 84 - Military Service › Section 8412 - Veterans' Bureau's objection to account; costs

§ 8412. Veterans' Bureau's objection to account; costs.
In any action or proceeding wherein the attorney of the bureau objects to the account of the committee or guardian, and such committee or guardian is removed for cause, costs shall not be allowed out of the ward's estate, but may be taxed against the defaulting committee or guardian.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 85 - Simultaneous Death › Section 8501 - No sufficient evidence of survivorship

§ 8501. No sufficient evidence of survivorship.
Where the title to property or the devolution thereof depends upon priority of death and there is no sufficient evidence that the persons have died otherwise than simultaneously, the property of each person shall be disposed of as if he had survived, except as provided otherwise in this chapter.
2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES › Chapter 85 - Simultaneous Death › Section 8502 - Beneficiaries of another person's disposition of property

§ 8502. Beneficiaries of another person's disposition of property.
Where two or more beneficiaries are designated to take successively by reason of survivorship under another person's disposition of property and there is no sufficient evidence that these beneficiaries have died otherwise than simultaneously, the property thus disposed of shall be divided into as many equal portions as there are successive beneficiaries, and these portions shall be distributed respectively to those who would have taken in the event that each designated beneficiary had survived.