Section 15-526 - Transfers from income to reimburse principal. - Maryland Statutes

§ 15-526. Transfers from income to reimburse principal.
 

(a)  Transfers authorized.- 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)  Included principal disbursements.- 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 § 15-524 (a) (9) of this subtitle. 

(c)  Successive income interests.- 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) of this section. 
 

[2000, ch. 292, § 2.]