1997 Minnesota Statutes

     501B.64 Corporate distributions. 

    Subdivision 1.    Shares; stock splits; stock dividends; 
 subscription rights.  Distributions of shares of a 
 distributing corporation, including distributions in the form of 
 a stock split or stock dividend, are principal.  A shareholder's 
 right to subscribe to shares or other securities of the 
 distributing corporation and the proceeds of any sale of that 
 right are principal. 

    Subd. 2.    Call of shares; merger; liquidation.  Except 
 to the extent that the corporation indicates that some part of a 
 corporate distribution is a settlement of preferred or 
 guaranteed dividends accrued since the trustee became a 
 stockholder or is in lieu of an ordinary cash dividend, a 
 corporate distribution is principal if the distribution is 
 pursuant to: 

    (1) a call of shares; 

    (2) a merger, consolidation, reorganization, or other plan 
 by which assets of the corporation are acquired by another 
 corporation; or 

    (3) a total or partial liquidation of the corporation, 
 including a distribution the corporation indicates is a 
 distribution in total or partial liquidation or distribution of 
 assets, other than cash, pursuant to a court decree or final 
 administrative order by a government agency ordering 
 distribution of the particular assets. 

    Subd. 3.    Regulated investment company; real estate 
 investment trust.  Distributions made from ordinary income by 
 a regulated investment company or by a trust qualifying and 
 electing to be taxed under federal law as a real estate 
 investment trust are income.  All other distributions made by 
 the company or trust, including distributions from capital 
 gains, depreciation, or depletion, whether in the form of cash 
 or an option to take new stock or cash or an option to purchase 
 additional shares, are principal. 

    Subd. 4.    Other distributions.  Except as provided in 
 subdivisions 1, 2, and 3, all corporate distributions are 
 income.  "Corporate distributions" includes cash dividends, 
 distributions of or rights to subscribe to shares or securities 
 or obligations of corporations other than the distributing 
 corporation, and the proceeds of the rights or property 
 distributions.  Except as provided in subdivisions 2 and 3, if 
 the distributing corporation gives a stockholder an option to 
 receive a distribution either in cash or in its own shares, the 
 distribution chosen is income. 

    Subd. 5.    Reliance on statements.  The trustee may 
 rely on a statement of the distributing corporation as to a fact 
 relevant under a provision of sections 501B.59 to 501B.76 
 concerning the source or character of dividends or distributions 
 of corporate assets. 

    HIST: 1989 c 340 art 1 s 53