Virginia § 64.2-1068 Reimbursement of principal from income

Virginia Statutes

§ 64.2-1068 — Reimbursement of principal from income

Virginia § 64.2-1068

JurisdictionVirginia

Title 64.2Wills, Trusts, and Fiduciaries

Subtitle IIITrusts

Ch. 10.1Uniform Fiduciary Income And Principal Act

Art. 7Allocation of Disbursements

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Bluebook

Va. Code Ann. § 64.2-1068 (2026).

Text

A.If a fiduciary makes or expects to make a principal disbursement described in subsection B, the fiduciary may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or provide a reserve for future principal disbursements.

B.To the extent a fiduciary has not been and does not expect to be reimbursed by a third party, principal disbursements to which subsection A applies include:

1.An amount chargeable to income but paid from principal because income is not sufficient;

2.The cost of an improvement to principal, whether a change to an existing asset or the construction of a new asset, including a special assessment;

3.A disbursement made to prepare property for rental, including tenant allowances, leasehold improvements, and

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A. If a fiduciary makes or expects to make a principal disbursement described in subsection B, the fiduciary may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or provide a reserve for future principal disbursements.

B. To the extent a fiduciary has not been and does not expect to be reimbursed by a third party, principal disbursements to which subsection A applies include:

1. An amount chargeable to income but paid from principal because income is not sufficient;

2. The cost of an improvement to principal, whether a change to an existing asset or the construction of a new asset, including a special assessment;

3. A disbursement made to prepare property for rental, including tenant allowances, leasehold improvements, and commissions;

4. A periodic payment on an obligation secured by a principal asset, to the extent the amount transferred from income to principal for depreciation is less than the periodic payment; and

5. A disbursement described in subsection A of § 64.2-1065.

C. If an asset whose ownership gives rise to a principal disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under subsection A.