New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter II - Income Taxes and Estate Taxes › Subchapter A - New York State Personal Income Tax Under Article 22 Of The Tax Law › Article 2 - Residents › Part 119 - New York Fiduciary Adjustment › Section 119.2 - Allocating fiduciary adjustment among estate or trust and its beneficiaries

Current through Register Vol. 46, No. 28, July 10, 2024
Tax Law, § 619(c)
(a)
General rule.
Ordinarily the New York fiduciary adjustment is allocated
						among an estate or trust and its beneficiaries in proportion to their
						respective shares of the distributable net income of the estate or trust.
Distributable net income
means distributable net income as
						defined in the Internal Revenue Code. It should be noted that the Federal
						distributable net income of an estate or trust is not the same as the Federal
						taxable income of an estate or trust; the amount of Federal distributable net
						income appears as a separate item on the Federal fiduciary income tax
						return.
(1) Allocation of the fiduciary
					 adjustment of a resident estate or trust is made in this way regardless of
					 whether any or all of the beneficiaries are residents or nonresidents of New
					 York State. A resident beneficiary, in preparing his own New York State
					 personal income tax return, uses his share of the fiduciary adjustment as a
					 modification of Federal adjusted gross income in computing his New York
					 adjusted gross income as provided in section
					 112.4 
					 of this Article. A nonresident beneficiary does not do this; instead, in
					 computing his New York adjusted gross income, he must include his share of net
					 change from New York State sources from an estate or trust as provided in
					 section
					 132.1 
					 of this Title. Nevertheless, a proportionate share of the fiduciary adjustment
					 must be allocated to the nonresident beneficiary in order that the shares
					 allocated to the estate or trust and its resident beneficiaries will be
					 proportionate to their shares of Federal distributable net income.
(2) Allocation of the fiduciary adjustment
					 according to the general rule stated in paragraph (1) of this subdivision is
					 illustrated by the following example:
Example:
The New York fiduciary adjustment with respect to a
						resident estate, computed in accordance with section
						119.1 
						of this Part, is a plus figure of $1,000. The estate has Federal distributable
						net income of $5,000, out of which it distributes $3,000 to A, a resident
						beneficiary, and $1,500 to B, a nonresident beneficiary. A's share is 60
						percent of Federal distributable net income, so that 60 percent of the
						fiduciary adjustment ($600) is allocated to him, and on his New York State
						personal income tax return he must add this to his Federal adjusted gross
						income in determining his New York adjusted gross income. B's share of the
						distributable net income is 30 percent, so that 30 percent of the New York
						fiduciary adjustment ($300) is allocated to him even though he will not use
						this figure in computing his New York taxable income because he is a
						nonresident. Ten percent of the distributable net income was not distributed by
						the estate to any beneficiary so that 10 percent of the fiduciary adjustment
						($100) is allocated to the estate, and the fiduciary on the estate's New York
						State fiduciary return must add this amount to the Federal taxable income of
						the estate in determining its New York taxable income.