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.
2022, c. 354.