KRS 386.494: Transfers from income to principal for depreciation.

(1) 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 (1) year.

(2) A trustee may transfer to principal a reasonable amount of the net cash receipts from

a principal asset that is subject to depreciation, but shall not transfer any amount for

depreciation:

(a) Of that portion of real property used or available for use by a beneficiary as a

residence or of tangible personal property held o r made available for the

personal use or enjoyment of a beneficiary; or

(b) During the administration of a decedent's estate.

(3) An amount transferred to principal need not be held as a separate fund.