Montana Code 72-34-450. Assets subject to depreciation — transfer from income to principal of portion of net cash receipts
72-34-450. Assets subject to depreciation — transfer from income to principal of portion of net cash receipts. (1) For purposes of 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.
Terms Used In Montana Code 72-34-450
- 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
- Decedent: A deceased person.
- Income: means money or property that a fiduciary receives as current return from a principal asset. See Montana Code 72-34-422
- Trustee: A person or institution holding and administering property in trust.
(2)A trustee may transfer from income to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation, under generally accepted accounting principles, but may not transfer any amount for depreciation under this section in any of the following circumstances:
(a)as to the portion of real property used or available for use by a beneficiary as a residence or of tangible personal property held or made available for the personal use or enjoyment of a beneficiary;
(b)during the administration of a decedent‘s estate; or
(c)if the trustee is accounting under 72-34-435 for the business or activity in which the asset is used.
(3)An amount transferred from income to principal need not be held as a separate fund.