§ 37A-4-408. Insubstantial allocations not required.
Part 3. Receipts NormallyApportioned.
§ 37A‑4‑408. Insubstantial allocations not required.
If a trustee determines thatan allocation between principal and income required by G.S. 37A‑4‑409,37A‑4‑410, 37A‑4‑411, 37A‑4‑412, or 37A‑4‑415is insubstantial, the trustee may allocate the entire amount to principalunless one of the circumstances described in G.S. 37A‑1‑104(c)applies to the allocation. This power may be exercised by a cotrustee in thecircumstances described in G.S. 37A‑1‑104(d) and may be releasedfor the reasons and in the manner described in G.S. 37A‑1‑104(e).An allocation is presumed to be insubstantial if:
(1) The amount of theallocation would increase or decrease net income in an accounting period, asdetermined before the allocation, by less than ten percent (10%); or
(2) The value of theasset producing the receipt for which the allocation would be made is less thanten percent (10%) of the total value of the trust's assets at the beginning ofthe accounting period. (2003‑232, s. 2.)