§ 30-2-14-41 — Principal disbursements; income transfers to reimburse principal or create principal disbursement reserve

Indiana § 30-2-14-41

• Jurisdiction: Indiana
• Art. 2: GENERAL PROVISIONS
• Ch. 14: Uniform Principal and Income Act

Text

(a) 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 (1) or
more accounting periods to reimburse principal or to provide a reserve
for future principal disbursements.
(b) Principal disbursements to which subsection (a) applies include
the following, but only to the extent that the trustee has not been and
does not expect to be reimbursed by a third party:
(1) an amount chargeable to income but paid from principal
because it is unusually large, including extraordinary repairs;
(2) 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;
(3) disbursements made to prepare property for rental, including
tenant allowances, leasehold improvements, and broker's
commissions;
(4) 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; and
(5) disbursements described in section 39(a)(7) of this chapter.
(c) 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 (a).

Legislative History

As added by P.L.84-2002, SEC.2.