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 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 paragraph 7 of subsection A of Section 26 of this act. 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.
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