Section 16372 Of Article 6. Allocation Of Disbursements During Administration Of Trust From California Probate Code >> Division 9. >> Part 4. >> Chapter 3. >> Article 6.

. (a) 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 one year.
  (b) A trustee may transfer from income to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation, under generally accepted accounting principles, but may not transfer any amount for depreciation under this section in any of the following circumstances:
  (1) As to the 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) If the trustee is accounting under Section 16352 for the business or activity in which the asset is used.
  (c) An amount transferred from income to principal need not be held as a separate fund.