The Arizona Revised Statutes have been updated to include the revised sections from the 56th Legislature, 1st Regular Session. Please note that the next update of this compilation will not take place until after the conclusion of the 56th Legislature, 2nd Regular Session, which convenes in January 2024.
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This online version of the Arizona Revised Statutes is primarily maintained for legislative drafting purposes and reflects the version of law that is effective on January 1st of the year following the most recent legislative session. The official version of the Arizona Revised Statutes is published by Thomson Reuters.
A. A tax required to be paid by a trustee based on receipts allocated to income must be paid from income.
B. A tax required to be paid by a trustee based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authority.
C. A tax required to be paid by a trustee on the trust's share of an entity's taxable income must be paid:
1. From income to the extent that receipts from the entity are allocated to income.
2. From principal to the extent that receipts from the entity are allocated only to principal.
3. Proportionately from principal and income to the extent that receipts from the entity are allocated to both income and principal.
4. From principal to the extent that the tax exceeds the total receipts from the entity.
D. After applying subsections A, B and C, the trustee shall adjust income or principal receipts to the extent that the trust's taxes are reduced because the trust receives a deduction for payments made to a beneficiary.