14-7427. Transfers from income to principal for depreciation; definition A. 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. 3. Under this section if the trustee is accounting under section 14-7412 for the business or activity in which the asset is used. B. An amount transferred to principal need not be held as a separate fund. C. For the 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 one year.
Arizona Legal Code