The Arizona Revised Statutes have been updated to include the revised sections from the 56th Legislature, 1st Regular Session. Please note that the next update of this compilation will not take place until after the conclusion of the 56th Legislature, 2nd Regular Session, which convenes in January 2024.
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This online version of the Arizona Revised Statutes is primarily maintained for legislative drafting purposes and reflects the version of law that is effective on January 1st of the year following the most recent legislative session. The official version of the Arizona Revised Statutes is published by Thomson Reuters.
14-7428 - Transfers from income to reimburse principal
14-7428. 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 of this section 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 brokers' 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.
5. Disbursements described in section 14-7426, subsection A, paragraph 7.
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 of this section.