California Code of Regulations › Title 18 - Public Revenues › Division 3 - Franchise Tax Board › Chapter 2.5 - Personal Income Tax (Taxable Years Beginning After 12-31-54) › Subchapter 9 - Estates, Trusts, Beneficiaries and Decedents › Article 1 - General Rules for Taxation of Estates and Trusts › Section 17743 - Taxability of Trust Dependent upon Residence of Fiduciary

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If there are two or more fiduciaries of a trust, and one
						or more are residents and one or more are nonresidents, and all the
						beneficiaries are nonresidents, the trust is taxable upon (a) all net income
						(less the deductions allowed under Article 1 of Chapter 9 (Section
						17731 and following)) from
						business carried on within this State, from real or tangible personal property
						located in this State, and from intangible personal property having a business
						or taxable situs in this State (see Reg. 17952); and (b) that proportion of the
						net income (less the deductions allowed under Article 1 of Chapter 9 (Section
						17731 and following)) from all
						other sources which the number of fiduciaries who are residents of this State
						bears to the total number of fiduciaries.
EXAMPLE (1). B, a resident, and C, a nonresident of this
						State, are the trustees of a trust created by A. All the beneficiaries are
						nonresidents. During the year 1980, the trust received $60,000 as rent from
						real and tangible personal property located in, and from business carried on in
						this State, from which expenses of $10,000 were deducted, $60,000 from real and
						personal property located, and business carried on, outside this State from
						which expenses of $10,000 were deducted, and $50,200 income from stocks and
						bonds, none of which had a business or taxable situs in this State. None of the
						income was paid or credited to the beneficiaries during the year. The $50,000
						income from real and personal property located in, and business transacted in
						this State is taxable. Since there are two fiduciaries, one of which is a
						resident of this State, one-half of the balance of the income of the trust is
						likewise taxable to the trust. Thus, the taxable income amounts to $100,100
						($50,000 from property located in this State, plus one-half of $100,200 which
						is the remainder of the trust's income).
EXAMPLE (2). E, a resident, and F and G, nonresidents of
						this State, are the trustees of a trust created by D. All of the beneficiaries
						are nonresidents. The corpus of the trust consists entirely of stocks and bonds
						and property located outside this State. One-third of the income taxable under
						Section 17742 (i.e., net income less the
						deductions allowed under Article 1 of Chapter 9), which is the proportion of
						total income taxable which the number of fiduciaries who are residents of this
						State bears to the total number of fiduciaries, is taxable to the
						trust.
1. New
						section filed 8-18-82; effective thirtieth day thereafter (Register 82, No.
						34).
2. Editorial correction of subsection (a) (Register 83, No.
						19).
Note: Authority cited: Section
						  19253,
						  Revenue and Taxation Code. Reference: Section
						  17743,
						  Revenue and Taxation Code.