CODE OF VIRGINIA

TRANSFERS FROM INCOME TO PRINCIPAL FOR DEPRECIATION (§ 64.2-1026)

A. In this section, “depreciation” means a reduction in value due to
wear, tear, decay, corrosion, or gradual obsolescence of a fixed asset having a
useful life of more than one year.

B. A trustee may transfer to principal a reasonable amount of the net cash
receipts from a principal asset that is subject to depreciation, but may not
transfer any amount for depreciation:

   1.  Of that portion of real property used or available for use by a
   beneficiary as a residence or of tangible personal property held or made
   available for the personal use or enjoyment of a beneficiary;

   2.  During the administration of a decedent’s estate; or

   3.  Under this section if the trustee is accounting under § 64.2-1011 for the
   business or activity in which the asset is used.

C. An amount transferred to principal need not be held as a separate fund.

HISTORY: 1999, c. 975, § 55-277.27; 2012, c. 614.