1. Transfer to reimburse or provide reserve. 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.
2. Applicable principal disbursement. Principal disbursements to which subsection 1 applies include the following, but only to the extent that the trustee has not been and does not expect to be reimbursed by a 3rd party:
A. An amount chargeable to income but paid from principal because it is unusually large, including extraordinary repairs;
B. 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;
C. Disbursements made to prepare property for rental, including tenant allowances, leasehold improvements and broker's commissions;
D. 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
E. Disbursements described in section 7‑462, subsection 1, paragraph G.
3. Successive income interest. 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 subsection 1.