§ 637.504 — Transfers from income to reimburse principal

Iowa § 637.504

• Jurisdiction: Iowa
• Title XV: JUDICIAL BRANCH AND JUDICIAL PROCEDURES
• Ch. 637: UNIFORM PRINCIPAL AND INCOME ACT

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1. If a trustee makes or expects to make a principal disbursement described in this
section, the trustee may transfer an appropriate amount from income to principal in one or
more accounting periods to reimburse principal or to provide a reserve for future principal
disbursements.
2. Principal disbursements to which subsection 1 applies include all of the following, but
only to the extent that the trustee has not been and does not expect to be reimbursed by a
third party:
a. An amount chargeable to income but paid from principal because it is unusually large,
including extraordinary repairs.
b. A capital improvement to a principal asset, whether in the form of changes to an
existing asset or the construction of a new asset, including special assessments.
c. Disbursements made to prepare property for rental, including leasehold improvements
and broker’s commissions.
d. Periodic payments on an obligation secured by a principal asset to the extent that
the amount transferred from income to principal for depreciation is less than the periodic
payments.
e. Disbursements described in section 637.502, subsection 1, paragraph “g”.
3. If the asset whose ownership gives rise to the disbursements becomes subject to a
successive income interest after an income interest ends, a trustee may continue to transfer
amounts from income to principal as provided in subsection 1.