14-7427. Transfers from income to principal for depreciation; definition
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/az/title-14/14-7427A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
A. 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.
3. Under this section if the trustee is accounting under section 14-7412 for the business or activity in which the asset is used.
B. An amount transferred to principal need not be held as a separate fund.
C. For the purposes of 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.