§ 64.2-1068 Reimbursement of principal from income
A. If a fiduciary makes or expects to make a principal disbursement described in subsection B, the fiduciary may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or provide a reserve for future principal disbursements.
B. To the extent a fiduciary has not been and does not expect to be reimbursed by a third party, principal disbursements to which subsection A applies include:
1. An amount chargeable to income but paid from principal because income is not sufficient;
2. The cost of an improvement to principal, whether a change to an existing asset or the construction of a new asset, including a special assessment;
3. A disbursement made to prepare property for rental, including tenant allowances, leasehold improvements, and commissions;
4. A periodic payment on an obligation secured by a principal asset, to the extent the amount transferred from income to principal for depreciation is less than the periodic payment; and
5. A disbursement described in subsection A of § 64.2-1065.
C. If an asset whose ownership gives rise to a principal disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under subsection A.
History
This law was first created in 2022. The record of its establishment is cataloged in chapter 354 of that year’s edition of “Acts of Assembly,” the annual state publication listing all changes made to the Code of Virginia in that year.
2022, c. 354.