TRUSTS - INVESTMENTS - AMORTIZATION OF BOND PREMIUM ON BOND CALLABLE BEFORE MATURITY
Dividio, Anthony L.
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Abstract
In 1929, the trustee, who was also beneficiary for life, invested $11,187.50 in bonds to mature in 1947, subject to prior call, worth $10,000 at par, which were called in and paid off October 1, 1936 at $10,500. Meanwhile, the trustee had amortized to the maturity date, setting aside one-eighteenth the amount of the premium out of interest annually, a total of $461.41, which, added to the $500 paid above par, left a balance of $226.09. In an accounting prior to her resignation in favor of a corporate trustee, held, amortization should have been to the call date and not maturity, and the balance should be charged to income and not to corpus. In the Matter of the Estate of Brewster, 163 Misc.
820, 298 N. Y. S. 761 (1937).