Texas Code § 712.0357

NATURE OF TOTAL RETURN DISTRIBUTIONS
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Sec. 712.0357. NATURE OF TOTAL RETURN DISTRIBUTIONS. (a) A distribution from a total return fund is considered a distribution of all income of the fund that reasonably apportions the total return of the fund, and may not be considered a fundamental departure from applicable state law.
(b) Unless the trust instrument provides otherwise, the trustee of a total return fund shall treat a distribution as first being made from the following sources in order of priority:
(1) from net accounting income;
(2) from ordinary accounting income not allocable to net accounting income;
(3) from net realized short-term capital gains;
(4) from net realized long-term capital gains; and
(5) from the principal of the fund.

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