C.R.S. Section 15-1.2-414
Derivative or option

  • definition

(1)

In this section, “derivative” means a contract, instrument, other arrangement, or combination of contracts, instruments, or other arrangements, the value, rights, and obligations of which are, in whole or in part, dependent on or derived from an underlying tangible or intangible asset, group of tangible or intangible assets, index, or occurrence of an event. The term includes stocks, fixed income securities, and financial instruments and arrangements based on indices, commodities, interest rates, weather-related events, and credit-default events.

(2)

To the extent a fiduciary does not account for a transaction in derivatives as a business under section 15-1.2-403, the fiduciary shall allocate ten percent of receipts from the transaction and ten percent of disbursements made in connection with the transaction to income and the balance to principal.

(3)

Subsection (4) of this section applies if:

(a)

A fiduciary:

(I)

Grants an option to buy property from a trust, whether or not the trust owns the property when the option is granted;

(II)

Grants an option that permits another person to sell property to the trust; or

(III)

Acquires an option to buy property for the trust or an option to sell an asset owned by the trust; and

(b)

The fiduciary or other owner of the asset is required to deliver the asset if the option is exercised.

(4)

If this subsection (4) applies, the fiduciary shall allocate ten percent to income and the balance to principal of the following amounts:

(a)

An amount received for granting the option;

(b)

An amount paid to acquire the option; and

(c)

Gain or loss realized on the exercise, exchange, settlement, offset, closing, or expiration of the option.

Source: Section 15-1.2-414 — Derivative or option - definition, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-15.­pdf (accessed Oct. 20, 2023).

15‑1.2‑101
Short title 15‑1.2‑102
Definitions 15‑1.2‑103
Scope 15‑1.2‑104
Governing law 15‑1.2‑201
Fiduciary duties - general principles 15‑1.2‑202
Judicial review of exercise of discretionary power - definition 15‑1.2‑203
Fiduciary’s power to adjust 15‑1.2‑204
Notice of action - definitions 15‑1.2‑301
Definitions 15‑1.2‑302
Application - duties and remedies 15‑1.2‑303
Authority of fiduciary 15‑1.2‑304
Notice 15‑1.2‑305
Unitrust policy 15‑1.2‑306
Unitrust rate 15‑1.2‑307
Applicable value 15‑1.2‑308
Period 15‑1.2‑309
Special tax benefits - rules 15‑1.2‑401
Character of receipts from entity - definitions 15‑1.2‑402
Distribution from trust or estate 15‑1.2‑403
Business of other activity conducted by fiduciary 15‑1.2‑404
Principal receipts 15‑1.2‑405
Rental property 15‑1.2‑406
Receipt on obligation to be paid in money 15‑1.2‑407
Insurance policy or contract 15‑1.2‑408
Insubstantial allocation not required 15‑1.2‑409
Deferred compensation, annuity, or similar payment - definitions 15‑1.2‑410
Liquidating asset - definition 15‑1.2‑411
Minerals, water, and other natural resources 15‑1.2‑412
Timber 15‑1.2‑413
Marital deduction property not productive of income 15‑1.2‑414
Derivative or option - definition 15‑1.2‑415
Asset-backed security 15‑1.2‑416
Other financial instrument or arrangement 15‑1.2‑501
Disbursement from income 15‑1.2‑502
Disbursement from principal 15‑1.2‑503
Transfer from income to principal for depreciation - definition 15‑1.2‑504
Reimbursement of income from principal 15‑1.2‑505
Reimbursement of principal from income 15‑1.2‑506
Income taxes 15‑1.2‑507
Adjustment between income and principal because of taxes 15‑1.2‑601
Determination and distribution of net income 15‑1.2‑602
Distribution to successor beneficiary 15‑1.2‑701
When right to income begins and ends 15‑1.2‑702
Apportionment of receipts and disbursements when decedent dies or income interest begins 15‑1.2‑703
Apportionment when income interest ends - definition 15‑1.2‑801
Uniformity of application and construction 15‑1.2‑802
Relation to electronic signatures in global and national commerce act 15‑1.2‑803
Application to trust or estate 15‑1.2‑804
Severability
Green check means up to date. Up to date

Current through Fall 2024

§ 15-1.2-414’s source at colorado​.gov