Florida Statutes 738.703 – Transfers from income to principal for depreciation
Current as of: 2023 | Check for updates
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(1) For purposes of 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 1 year.
(2) A fiduciary 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:
(a) 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;
Terms Used In Florida Statutes 738.703
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Beneficiary: means , in the case of a decedent's estate, an heir or devisee and, in the case of a trust, an income beneficiary or a remainder beneficiary. See Florida Statutes 738.102
- Decedent: A deceased person.
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: means a personal representative or a trustee. See Florida Statutes 738.102
- Personal property: All property that is not real property.
- Principal: means property held in trust for distribution to a remainder beneficiary when the trust terminates. See Florida Statutes 738.102
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
(b) During the administration of a decedent‘s estate; or
(c) Under this section if the fiduciary is accounting under s. 738.403 for the business or activity in which the asset is used.
(3) The amount of depreciation taken for tax purposes with respect to an asset shall be presumed to be a reasonable amount of depreciation. An amount taken for depreciation shall not be considered unreasonable solely because it is greater or less than the amount taken for tax purposes.
(4) An amount transferred to principal need not be held as a separate fund.