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28-70-503. Transfers from income to principal for depreciation.
Arkansas Code — all titles (historical 2020) · legal_authorities
28-70-503. Transfers from income to principal for depreciation.
(a) 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 one year.
(b) 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 any amount for depreciation:
(1) of that 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;
(2) during the administration of a decedent's estate; or
(3) under this section if the trustee is accounting under § 28-70-403 for the business or activity in which the asset is used.
(c) An amount transferred to principal need not be held as a separate fund.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 28-70-503
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Record provenance
Stable record: arkansas_code:legal_authorities:28-70-503
Source file: gov.ar.code.title.28.odt
Pages: Not recorded – Not recorded
Passage SHA-256: b23f3e6a87849a7b0f7354e8fc04421064c7443df3e98faf71ce998f77b2f5b9
Source location: content.xml paragraph 12030
Stored source content
28-70-503. Transfers from income to principal for depreciation.
(a) 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 one year.
(b) 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 any amount for depreciation:
(1) of that 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;
(2) during the administration of a decedent's estate; or
(3) under this section if the trustee is accounting under § 28-70-403 for the business or activity in which the asset is used.
(c) An amount transferred to principal need not be held as a separate fund.
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Arkansas Code — all titles (historical 2020) · legal_authorities
28-70-403. Business and other activities conducted by trustee.
(a) If a trustee who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or activity instead of accounting for it as part of the trust's general accounting records, the trustee may maintain separate accounting records for its transactions, whether or not its assets are segregated from other trust assets.
(b) A trustee who accounts separately for a business or other activity may determine the extent to which its net cash receipts must be retained for working capital, the acquisition or replacement of fixed assets, and other reasonably foreseeable needs of the business or activity, and the extent to which the remaining net cash receipts are accounted for as principal or income in the trust's general accounting records. If a trustee sells assets of the business or other activity, other than in the ordinary course of the business or activity, the trustee shall account for the net amount received as principal in the trust's general accounting records to the extent the trustee determines that the amount received is no longer required in the conduct of the business.
(c) Activities for which a trustee may maintain separate accounting records include:
(1) retail, manufacturing, service, and other traditional business activities;
(2) farming;
(3) raising and selling livestock and other animals;
(4) management of rental properties;
(5) extraction of minerals and other natural resources;
(6) timber operations; and
(7) activities to which § 28-70-414 applies.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 28-70-403
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 28-70-403. This identifies an authority to review, not proof of applicability.