§557A-503 - Transfers from income to principal for depreciation. - Hawaii Statutes

     [§557A-503]  Transfers from income to principal for depreciation.  (a)  As used in this section, "depreciation" means a reduction in value of a fixed asset having a useful life of more than one year, due to wear, tear, decay, corrosion, or gradual obsolescence.

     (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 a transfer may not be made 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 section 557A-403 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. [L 2000, c 191, pt of §1]