Alabama § 19-3A-406 - Bonds and Other Obligations.
Full text of Alabama Code of Alabama § 19-3A-406 — Bonds and Other Obligations., with citation guidance and answers to common questions.
§ 19-3A-406. Bonds and Other Obligations.
(a) An amount received as interest, whether determined at a fixed, variable, or floating rate, on a bond or an obligation to pay money to the fiduciary shall be allocated to income.
(b) Except as provided for in subsection (c) and subsection (d), a fiduciary shall allocate to principal any gain or loss realized upon the sale or maturity of any bond or obligation to pay money to the fiduciary, regardless of how such bond or other obligation was acquired.
(c) A fiduciary shall allocate to income the difference between inventory value or cost, and the amount realized upon sale or maturity, if greater, for bonds or other obligations that do not bear interest, regardless of how or when such bond or other obligation was acquired.
(d) For bonds or other obligations that are acquired by a fiduciary subsequent to the time the principal was established and whose cost is greater than their par or maturity value, the fiduciary shall amortize periodically out of income the premium paid, and upon sale or maturity, shall allocate to principal any gain or loss realized thereon.
(e) This section does not apply to a bond or other obligation to which Section 19-3A-409, Section 19-3A-410, Section 19-3A-411, Section 19-3A-412, Section 19-3A-414, or Section 19-3A-415 applies.
Source: official Alabama text · Last verified 2026-08-27
Frequently Asked Questions About Alabama § 19-3A-406
What does Code of Alabama § 19-3A-406 cover?
Section 19-3A-406 ("Bonds and Other Obligations.") is part of the Code of Alabama, the codified statutory law of Alabama. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Alabama § 19-3A-406?
A common citation format is "Code of Alabama § 19-3A-406" (Alabama). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Alabama law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Alabama official source linked on this page or consult a licensed Alabama attorney.
How does Alabama § 19-3A-406 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Alabama can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Alabama.