Trusts – Improved Real Estate – Validity of Depreciation Reserves

Depreciation of physical assets is an accounting procedure now taken for granted in the business and tax areas of the law. Its emergence in the field of trusts has been relatively slow, however, and even today it has not gained much acceptance by the courts. It is the purpose of this comment to examine some of the reasons why the courts have been reluctant in applying the depreciation concept to trusts, and in particular to those trusts that include improved real estate among the assets of the corpus.