{"data":{"id":"us-ar/ark.-code-ann.-28-77-505","jurisdiction":"us-ar","citation":"Ark. Code Ann. § 28-77-505","heading":"Reimbursement of principal from income","body":"(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 § 28-77-502(a) . (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). Added by Act 2021, No. 1088,§ 2, eff. 1/1/2022.\n\n(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.\n\n(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 § 28-77-502(a) .\n\n(1) an amount chargeable to income but paid from principal because income is not sufficient;\n\n(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;\n\n(3) a disbursement made to prepare property for rental, including tenant allowances, leasehold improvements, and commissions;\n\n(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\n\n(5) a disbursement described in § 28-77-502(a) .\n\n(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).","path":["AR Code","Title 28","Chapter 77","Subchapter 5"],"source_url":"https://oss-data-us.vaquill.ai/v2026.08/us_ar_statutes.parquet","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:41Z","sha256":"c03a7a453f8ce9fb629069d959afad2cc3ff749c0acbd85f37f55e7fb817f206","source_id":"us-ar","stale":false,"prev":"us-ar/ark.-code-ann.-28-77-504","next":"us-ar/ark.-code-ann.-28-77-506"},"notice":"GroundRules: Original legal text. Not legal advice."}