§557A-503 - Transfers from income to principal for depreciation.

[§557A-503] Transfers from income to
principal for depreciation. (a) As used in this section,
"depreciation" means a reduction in value of a fixed asset having a
useful life of more than one year, due to wear, tear, decay, corrosion, or
gradual obsolescence.

(b) A trustee may transfer to principal a
reasonable amount of the net cash receipts from a principal asset that is
subject to depreciation, but a transfer may not be made 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;
or

(3) Under this section if the trustee is accounting
under section 557A-403 for the business or activity in which the asset is used.