2020 Colorado Revised Statutes
Title 15 - Probate, Trusts, And Fiduciaries
Article 1. Fiduciary
Section 15-1-429. Transfers from income to reimburse principal.
(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 governed by the provisions of subsection (1) of this section 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:
An amount chargeable to income but paid from principal because it is unusuallylarge, including extraordinary repairs;
A capital improvement to a principal asset, whether in the form of changes to anexisting asset or the construction of a new asset, including special assessments;
Disbursements made to prepare property for rental, including tenant allowances, leasehold improvements, and broker's commissions;
Periodic payments on an obligation secured by a principal asset to the extent that theamount transferred from income to principal for depreciation is less than the periodic payments; and
Disbursements described in section 15-1-427 (1)(g).
(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) of this section.
Source: L. 2000: Entire part R&RE, p. 1147, § 1, effective July 1, 2001.
