State Income Tax Treatment of Nonresident Trusts: Compliance Challenges and Planning Opportunities
Determining Residency, Allocating Income Between Trust and Beneficiary, Apportionment Questions
Note: CLE credit is not offered on this program
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 state taxation of trusts in light of the Supreme Court's grant of certiorari to North Carolina Department of Revenue v. the Kaestner 1992 Family Trust. The panel will discuss 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 states that deviate from federal treatment and those states whose definitions conform to federal but have different calculation bases.
- State taxation of resident trusts
- Which states impose an 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 nonresident 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 nonresident 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?
- How does North Carolina Department of Revenue v. the Kaestner 1992 Family Trust impact residency?
Catherine B. Eberl
Ms. Eberl regularly advises clients on all aspects of estate planning, including estate, gift, and fiduciary income tax... | Read More
Ms. Eberl regularly advises clients on all aspects of estate planning, including estate, gift, and fiduciary income tax planning; cross-border estate planning; charitable giving; and family business succession planning. She regularly practices in Surrogate's Court and counsels both fiduciaries and beneficiaries with respect to the administration of trusts and estates. Ms. Eberl also advises both private foundations and public charities on governance issues and on satisfying IRS operational requirements.Close
Ms. Pascal concentrates her practice in tax law with a focus on New York State, New York City, and multistate tax... | Read More
Ms. Pascal concentrates her practice in tax law with a focus on New York State, New York City, and multistate tax issues. She assists individual and business clients with New York State and New York City audits, including residency, sales tax, unincorporated business tax, commercial rent tax, and corporate tax audits. She also helps clients successfully navigate New York State’s voluntary disclosure process.Close