1. If a trustee determines that an allocation between principal and income required by sections 637.421 through 637.424 or section 637.427 isinsubstantial, the trustee may allocate the entire receipt to principal. 2. An allocation ispresumed to be insubstantial ifeither of the following would be true if an allocation was made: a. The amount of the allocation would increase or decrease an accounting period’s net income, as determined before the allocation, by less than ten percent. b. The value of the asset producing the receipt for which the allocation would be made is less than ten percent of the total value ofthe trust’s assets atthe beginning of the accounting period.
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