§ 637.424

637.424 Timber. 1. A trustee may account for net receipts from the sale of timber and related products under subsection 2 or section 637.403 or, if the trustee determines that net receipts areinsubstantial, may allocate the net receipts to principal. The presumptions in section 637.420apply in determining whether net receipts are insubstantial. If a trust owns more than oneblock of timberland, the trustee may use different methods to account for net receipts fromdifferent blocks. 2. If a trustee does not account under section 637.403 for net receipts from the sale of timber and related products or allocate the net receipts to principal because they areinsubstantial, the trustee shall allocate the net receipts according to one of the followingrules: a. Allocate the net receipts to income to the extent that the amount of timber removed from the land does not exceed the rate of growth of the block as a whole during the accountingperiods in which a beneficiary has a mandatory income interest. b. Allocate the net receipts to principal to the extent that the amount of timber removed from the land exceeds the block’s rate of growth or the net receipts are from the sale ofstanding timber.

st. b. Allocate the net receipts to principal to the extent that the amount of timber removed from the land exceeds the block’s rate of growth or the net receipts are from the sale ofstanding timber. c. Allocate the net receipts to or between income and principal if the net receipts are from the lease of timberland or from a contract to cut timber from land owned by a trust,by determining the amount of timber removed from the land under the lease or contract andapplying the rules in paragraphs 'a' and 'b'. d. Allocate the net receipts to principal to the extent that advance payments, bonuses, and other payments are not allocated pursuant to paragraph 'a', 'b', or 'c'. 3. In determining the net receipts from the sale of timber, a trustee shall deduct and transfer to principal a reasonable amount for depletion. 4. This chapter applies regardless of whether a decedent or transferor was harvesting timber from the property before it became subject to the trust. 5. If a trust owns an interest in timberland on or before July 1, 2000, the trustee may allocate net receipts from the sale of timber and related products as provided in this sectionor in the manner used by the trustee before

rest in timberland on or before July 1, 2000, the trustee may allocate net receipts from the sale of timber and related products as provided in this sectionor in the manner used by the trustee before July 1, 2000. If the trust acquires an interest intimberland after July 1, 2000, the trustee shall allocate net receipts from the sale of timberand related products as provided in this section. 99 Acts, ch 124, §20; 2000 Acts, ch 1154, §40Referred to in §637.412, 637.420, 637.422 Sat Dec 23 12:19:17 2023 Iowa Code 2024, Section 637.424 (16, 0)