CODE OF VIRGINIA INCOME TAXES (§ 64.2-1028) A. A tax required to be paid by a trustee based on receipts allocated to income shall be paid from income. B. A tax required to be paid by a trustee based on receipts allocated to principal shall 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 shall be paid: 1. From income to the extent that receipts from the entity are allocated only 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; and 4. From principal to the extent that the tax exceeds the total receipts from the entity. D. After applying subsections A through 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. HISTORY: 1999, c. 975, § 55-277.29; 2009, c. 477; 2012, c. 614.