§ 59-04.2-27 — (504) Transfers from income to reimburse principal

North Dakota § 59-04.2-27

• Jurisdiction: North Dakota
• Title 59: Trusts, Uses, and Powers
• Ch. 59-04.2: Uniform Principal and Income Act (1997)

Text

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 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 tenant allowances,
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; and
e. Disbursements described in subdivision g of subsection 1 of section 59-04.2-25.
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.