Virginia Code 64.2-1066: Transfer from income to principal for depreciation.
A. As used in this section, “depreciation” means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a tangible asset having a useful life of more than one year.
Terms Used In Virginia Code 64.2-1066
- 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: includes :
1. See Virginia Code 64.2-1033
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: includes a trustee, trust director under the Uniform Directed Trust Act (§ Virginia Code 64.2-1033
- Personal property: All property that is not real property.
- Principal: means property held in trust for distribution to, production of income for, or use by a current or successor beneficiary. See Virginia Code 64.2-1033
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
B. A fiduciary 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 any amount for depreciation:
1. Of the part of real property used or available for use by a beneficiary as a residence;
2. Of tangible personal property held or made available for the personal use or enjoyment of a beneficiary; or
3. Under this section, to the extent the fiduciary accounts:
a. Under § 64.2-1057 for the asset; or
b. Under § 64.2-1050 for the business or other activity in which the asset is used.
C. An amount transferred to principal under this section need not be separately held.
2022, c. 354.