2010 Code of Virginia
Title 55 - PROPERTY AND CONVEYANCES.
Chapter 15.1 - Uniform Principal and Income Act (55-277.1 thru 55-277.33)
55-277.28 - Transfers from income to reimburse principal.
§ 55-277.28. Transfers from income to reimburse principal.
A. 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.
B. Principal disbursements to which subsection A applies 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:
1. An amount chargeable to income but paid from principal because it is unusually large, including extraordinary repairs;
2. A capital improvement to a principal asset, whether in the form of changes to an existing asset or the construction of a new asset, including special assessments;
3. Disbursements made to prepare property for rental, including tenant allowances, leasehold improvements, and broker's commissions;
4. Periodic payments on an obligation secured by a principal asset to the extent that the amount transferred from income to principal for depreciation is less than the periodic payments; and
5. Disbursements described in subdivision A 7 of § 55-277.26.
C. 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.
(1999, c. 975.)
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