Unless otherwise provided by the trust instrument, a trustee may include capital gains from the sale or exchange of capital assets in distributable net income to the extent the gains are, in a reasonable and impartial exercise of discretion by the trustee, allocated to:
1. Income pursuant to the power of the trustee to adjust between principal and income pursuant to NRS 164.795;
2. Principal and treated consistently by the trustee in the books, records and tax returns of the trust as part of the distribution to a beneficiary; or
3. Principal but distributed to a beneficiary or utilized by the trustee in determining the amount that is distributed or required to be distributed to a beneficiary.