1. 1. 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 principal disbursements.

2. 2. Principal disbursements to which subsection 1 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. (1) An amount chargeable to income but paid from principal because it is unusually large, including extraordinary repairs;
   2. (2) Disbursements made to prepare property for rental, including tenant allowances, leasehold improvements, and broker's commissions;
   3. (3) 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
   4. (4) Disbursements described in subdivision (7) of subsection 1 of section 469.453.
3. 3. 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 1 of this section.

(L. 2001 H.B. 241)