§ 8165 — Transfers from income to reimburse principal

(a) Permissible reimbursements.--A 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 disbursements if the trustee makes or expects to make a disbursement from principal which is allocable to income under section 8161 (relating to mandatory disbursements from income) or 8163 (relating to discretionary allocation of disbursements) and which:

(1) is paid from principal because it is unusually large; or

(2) is made to prepare property for rental, including tenant allowances, leasehold improvements and broker's commissions.

(b) Continued transfers.--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).

(c) Application.--This section shall not apply to the extent the trustee has been or expects to be reimbursed by a third party.