Michigan Laws 555.903 – Depreciation; amount transferred to principal
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(1) As used in this section, “depreciation” means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a fixed asset having a useful life of more than 1 year.
(2) A trustee may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation, but may not transfer an amount for depreciation as follows:
Terms Used In Michigan Laws 555.903
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Beneficiary: means , in the case of a decedent's estate, an heir, legatee, or devisee and, in the case of a trust, an income beneficiary or remainder beneficiary. See Michigan Laws 555.502
- Decedent: A deceased person.
- Personal property: All property that is not real property.
- Principal: means property held in trust for distribution to a remainder beneficiary when the trust terminates. See Michigan Laws 555.502
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Trustee: A person or institution holding and administering property in trust.
- Trustee: includes an original, additional, or successor trustee, whether or not appointed or confirmed by a court. See Michigan Laws 555.502
(a) An amount for that portion of real property used or available for use by a beneficiary as a residence or an amount for tangible personal property held or made available for the personal use or enjoyment of a beneficiary.
(b) An amount during the administration of a decedent‘s estate.
(c) An amount under this section, if the trustee is accounting under section 403 for the business or other activity in which the asset is used.
(3) An amount transferred to principal need not be held as a separate fund.