Sec. 45a-542aa. Transfers from income to reimburse principal.
Sec. 45a-542aa. 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 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 subdivision (7) of subsection (a) of section 45a-542y.
(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.
(P.A. 99-164, S. 28, 36.)
History: P.A. 99-164 effective January 1, 2000.