Section 760 ILCS 15/14 - Charges against income and principal(a) The following charges shall be made against income: (1) ordinary expenses, other than compensation as provided in paragraph (6) of this subsection (a), incurred by the trustee in connection with the administration or protection of the trust property, including regularly recurring taxes assessed against any portion of the principal, water rates, premiums on insurance taken upon the interests of the income beneficiary, remainderman, or trustee, interest paid by the trustee (except interest on taxes as provided in paragraph (7) of this subsection and paragraphs (5), (6), and (7) of subsection (c)), ordinary repairs and maintenance;(2) a reasonable allowance for depreciation on property which is subject to depreciation under generally accepted accounting principles, but no allowance shall be made for depreciation of any property subject to a trust under an instrument executed before the effective date of this Act, or for depreciation of that portion of any real property used by a beneficiary as a residence; such allowance shall be charged only against the income from the property subject to depreciation and shall not accrue from year to year;(3) one-half of court costs, attorney's fees and other expenses and fees on any judicial accounting, unless the court directs otherwise;(4) court costs, attorney's fees and other expenses and fees on other judicial proceedings if the matter primarily concerns the income interest, unless the court directs otherwise;(5) special compensation and expenses of or incurred by the trustee in connection with income;(6) one-half of the regular compensation of the trustee, attorney, investment counsel, custodian or accountant, subject to paragraph (1) of subsection (c);(7) any tax, including interest and penalties thereon, levied upon receipts defined as income under this Act or the trust instrument and payable by the trustee.(b) If charges against income are of an unusual amount, the trustee may by means of reserves or other reasonable means charge them over a reasonable period of time and withhold from distribution sufficient sums to regularize distributions.(c) The following charges shall be made against principal: (1) one-half of the regular compensation of the trustee, attorney, investment counsel, custodian or accountant shall be paid out of principal, provided that, if in the judgment of the trustee, the charging of a part or all of that portion of such compensation to principal is impracticable because of the lack of sufficient principal cash and readily marketable intangible personal property, or inadvisable because of the nature of the assets, that part or all of such compensation shall be paid out of income. The decision of the trustee to pay a larger portion or all of such compensation out of income shall be conclusive, and the income of the trust shall not be entitled to reimbursement from principal at any subsequent time or times;(2) special compensation and expenses of or incurred by the trustee in connection with principal, trustee's compensation computed on principal as an acceptance, distribution or termination fee, and, unless the court directs otherwise, court costs, attorney's fees and other expenses and fees in judicial proceedings primarily concerning matters of principal or in any action to construe the trust or protect it or the property or assure the title to any trust property;(3) charges not provided for in subsection (a), including the cost of investing and reinvesting principal, the payments on principal of an indebtedness (including a mortgage amortized by periodic payments of principal), and expenses for preparation of property for rental or sale;(4) extraordinary repairs or expenses incurred in making a capital improvement to principal, including special assessments;(5) any tax, including interest and penalties thereon, levied upon profit, gain, or other receipts allocated to principal notwithstanding denomination of the tax as an income tax by the taxing authority;(6) any tax, including interest and penalties thereon, levied upon amounts not actually received by the trustee before the date the tax is payable, including extensions, notwithstanding the denomination of the tax as an income tax by the taxing authority, except that if, in the judgment of the trustee, the charging against principal of part or all of the tax is impracticable because of a lack of sufficient principal cash and readily marketable intangible personal property or inadvisable because of the nature of the assets that part or all of the tax shall be charged against income. The decision of the trustee to charge part or all of the tax against income shall be conclusive, and the income of the trust shall not be entitled to reimbursement from principal at any subsequent time or times. If any part or all of the amount on which tax was previously paid and charged against principal is later received by the trustee and if the receipt is otherwise credited to income, then when the amount is received the portion of the tax previously paid and charged against principal attributable to the amount so received shall be deducted from the amount and credited to principal;(7) all estate, inheritance, and generation-skipping transfer taxes and any penalties on the taxes apportioned to the trust and one-half of the interest on those taxes and penalties;(8) a net loss in any fiscal or calendar year from the operation of a business or an agricultural or farming operation, to be repaid from income as available in the succeeding year or years;(9) monies paid for the purchase of options.P.A. 82-390; 87-714; 91-923, eff. 7/7/2000.