Trusts.

Existing law generally requires a trustee to allocate money received from an entity to income. However, existing law requires a trustee to allocate to principal money received from an entity that is a regulated investment company or a real estate investment trust if the money distributed is a capitol gain dividend for federal income taxes. Existing law also requires an allocation to principal of money received in total or partial liquidation of an entity. Existing law provides that money is to be treated as received in partial liquidation to the extent the amount received from the distributing entity is attributable to the proceeds from a sale by the distributing entity, or by the…