FL S0978

Defines "carrying value" as the fair market value of assets when received by a fiduciary, with provisions for adjusting values when fiduciaries change and for assets acquired during administration.

Modifies total return unitrust provisions by defining "average fair market value" based on a 3-year average, changing the unitrust percentage calculation method, and removing restrictions on releasing the power to adjust.

Replaces "trustee" with "fiduciary" throughout the chapter to clarify that principal and income allocation rules apply to all fiduciaries, not just trustees.

Revises entity distribution rules to allocate excess distributions over 10 percent of fair market value to principal and creates new rules for investment entities and public stock exchange entities with specific income thresholds.

Changes liquidating asset allocation from 10 percent to 5 percent to income and modifies income tax allocation methods between fiduciaries and beneficiaries, including a new adjustment mechanism for taxes reduced by distributions to beneficiaries.