New York Laws
Part 5 - Allocation of Disbursements During Administration of Trust
11-A-5.4 - Transfers From Income to Reimburse Principal

(a) 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.
(b) Principal disbursements to which paragraph (a) 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:
(1) an amount chargeable to income but paid from principal because it
is unusually large, including extraordinary repairs;
(2) 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;
(3) disbursements made to prepare property for rental, including
tenant allowances, leasehold improvements, and broker's commissions;
(4) 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
(5) disbursements described in subparagraph 11-A-5.2 (a)(7).
(c) 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 paragraph (a).

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