N.D. Cent. Code § 59-04.2-27: (504) Transfers from income to reimburse principal

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.Principal disbursements to which subsection 1 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:

a.An amount chargeable to income but paid from principal because it is unusually large, including extraordinary repairs;

b.A capital improvement to a principal asset, whether in the form of changes to an existing asset or the construction of a new asset, including special assessments;

c.Disbursements made to prepare property for rental, including tenant allowances, leasehold improvements, and broker's commissions;

d.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

e.Disbursements described in subdivision g of subsection 1 of section 59-04.2-25.

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.