Tex.
Prop. Code Section 116.173
Liquidating Asset
(a)
In this section, “liquidating asset” means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes a leasehold, patent, copyright, royalty right, and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance. The term does not include a payment subject to Section 116.172 (Deferred Compensation, Annuities, and Similar Payments), resources subject to Section 116.174 (Minerals, Water, and Other Natural Resources), timber subject to Section 116.175, an activity subject to Section 116.177 (Derivatives and Options), an asset subject to Section 116.178 (Asset-backed Securities), or any asset for which the trustee establishes a reserve for depreciation under Section 116.203 (Transfers from Income to Principal for Depreciation).(b)
A trustee shall allocate to income 10 percent of the receipts from a liquidating asset and the balance to principal.(c)
The trustee may allocate a receipt from any interest in a liquidating asset the trust owns on January 1, 2004, in the manner provided by this chapter or in any lawful manner used by the trustee before January 1, 2004, to make the same allocation.
Source:
Section 116.173 — Liquidating Asset, https://statutes.capitol.texas.gov/Docs/PR/htm/PR.116.htm#116.173 (accessed Apr. 13, 2024).
