State Income Tax Treatment of Nonresident Trusts: Compliance Challenges and Planning Opportunities
Determining Residency, Allocating Income Between Trust and Beneficiary, Apportionment Questions
Recording of a 110-minute CPE webinar with Q&A
This webinar will provide tax professionals and advisers with a practical guide into various states’ rules governing the income tax treatment of nonresident trusts with multistate income or beneficiary connections. The panel will address critical topics relevant to resident and nonresident trusts, with a particular focus on allocation of state-sourced income between trust and beneficiaries in nonresident trusts with resident beneficiaries. The webinar will also identify those states that deviate from federal treatment and list those states whose definitions conform to federal but have different calculation bases.
- State taxation of resident trusts
- Which states impose income tax on resident nongrantor trusts
- Filing requirements
- Grantor vs. nongrantor trust tax treatment
- Determining whether a trust is resident or nonresident
- Key issues for non-resident trusts
- Allocating income between nongrantor trust and beneficiaries in multistate contact situations
- State apportionment issues for trusts holding active business income
- States that deviate from federal treatment of grantor trust income
- Potential trustee issues in determining trust resident status
- Possible impact of federal tax reform on state taxation of resident and non-resident trusts
- Planning steps
- Avoiding issues with multiple settlors where settlors live in different states
- Establishing separate trusts in cases where beneficiaries are based in different states
The panel will discuss these and other relevant topics:
- Critical factors in determining whether a trust is resident or nonresident for state income tax purposes
- How do some key states approach allocating income between a nonresident trust and its beneficiaries?
- Issues when trusts receive active business income from multiple states outside of its resident state
- Which states deviate from the federal tax treatment of grantor trusts?