14-7427. Transfers from income to principal
for depreciation; definition


A. A trustee may transfer to principal a reasonable amount of the net cash receipts
from a principal asset that is subject to depreciation but may not transfer any amount
for depreciation:


1. Of that portion of real property used or available for use by a beneficiary as a
residence or of tangible personal property held or made available for the personal use or
enjoyment of a beneficiary.


2. During the administration of a decedent's estate.


3. Under this section if the trustee is accounting under section 14-7412 for the
business or activity in which the asset is used.


B. An amount transferred to principal need not be held as a separate fund.


C. For the purposes of this section, "depreciation" means a reduction in value due
to wear, tear, decay, corrosion or gradual obsolescence of a fixed asset having a useful
life of more than one year.