637.503 - TRANSFERS FROM INCOME TO PRINCIPAL FOR DEPRECIATION. - Iowa Statutes

637.503 TRANSFERS FROM INCOME TO PRINCIPAL FOR DEPRECIATION. 1. For purposes of 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. 2. 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 shall not be made for depreciation under any of the following circumstances: a. When the depreciation involves the portion of real property used or available for use by a beneficiary as a residence, or tangible personal property held or made available for the personal use or enjoyment of a beneficiary. b. When the depreciation occurs during the administration of a decedent's estate. c. If the trustee is accounting under section 637.403 for the business or activity in which the asset is used. 3. An amount transferred to principal need not be held as a separate fund.          Section History: Recent Form 99 Acts, ch 124, §26 Referred to in § 637.422