701.1129(1)(1) In this section, “asset-backed security” means an asset whose value is based upon the right it gives the owner to receive distributions from the proceeds of financial assets that provide collateral for the security. The term includes an asset that gives the owner the right to receive from the collateral financial assets only the interest or other current return or only the proceeds other than interest or current return. The term does not include an asset to which s. 701.1115 or 701.1123 applies.

701.1129(2)(2) If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets, the trustee shall allocate to income the portion of the payment that the payer identifies as being from interest or other current return and shall allocate the balance of the payment to principal.

701.1129(3)(3) If a trust receives one or more payments in exchange for the trust’s entire interest in an asset-backed security in one accounting period, the trustee shall allocate the payments to principal. If a payment is one of a series of payments that will result in the liquidation of the trust’s interest in the security over more than one accounting period, the trustee shall allocate 10 percent of the payment to income and the balance to principal.

701.1130701.1130 Disbursements from income. A trustee shall make the following disbursements from income to the extent that they are not disbursements specified in s. 701.1110 (2) (b) or (c):

701.1130(1)(1) One-half of the regular compensation of the trustee and of any person providing investment advisory or custodial services to the trustee.

701.1130(2)(2) One-half of all expenses for accountings, judicial proceedings, or other matters that involve both the income and remainder interests.

701.1130(3)(3) All of the other ordinary expenses incurred in connection with the administration, management, or preservation of trust property and the distribution of income, including interest, ordinary repairs, regularly recurring taxes assessed against principal, and expenses of a proceeding or other matter that concerns primarily the income interest.

701.1130(4)(4) Recurring premiums on insurance covering the loss of a principal asset or the loss of income from or use of the asset.

701.1131(1)(a)(a) The remaining one-half of the disbursements described in s. 701.1130 (1) and (2).

701.1131(1)(b)(b) All of the trustee’s compensation calculated on principal as a fee for acceptance, distribution, or termination, and disbursements made to prepare property for sale.

701.1131(1)(c)(c) Payments on the principal of a trust debt.

701.1131(1)(d)(d) Expenses of a proceeding that concerns primarily principal, including a proceeding to construe the trust or to protect the trust or its property.

701.1131(1)(e)(e) Premiums paid on a policy of insurance not described in s. 701.1130 (4) of which the trust is the owner and beneficiary.

701.1131(1)(f)(f) Estate, inheritance, and other transfer taxes, including penalties, apportioned to the trust.

701.1131(1)(g)(g) Disbursements related to environmental matters, including reclamation, assessing environmental conditions, remedying and removing environmental contamination, monitoring remedial activities and the release of substances, preventing future releases of substances, collecting amounts from persons liable or potentially liable for the costs of those activities, penalties imposed under environmental law and other payments made to comply with environmental law, statutory or common law claims by 3rd parties, and defending claims based on environmental matters.

701.1131(2)(2) If a principal asset is encumbered with an obligation that requires income from that asset to be paid directly to the creditor, the trustee shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.

701.1132(1)(1) In 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.

701.1132(2)(2) 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:

701.1132(2)(a)(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.

701.1132(2)(b)(b) During the administration of a decedent’s estate.

701.1132(2)(c)(c) Under this section if the trustee is accounting under s. 701.1117 for the business or activity in which the asset is used.