Virginia Administrative Code › Title 23 - TAXATION › Agency 10 - DEPARTMENT OF TAXATION › Chapter 115 - FIDUCIARY INCOME TAX › Part I - Fiduciary Income Tax › Section 23VAC10-115-60 - Share of a nonresident estate, trust or beneficiary in income from Virginia sources

Current through Register Vol. 40, No. 24, July 15, 2024
A. The
				  share of a nonresident estate or trust under
				  23VAC10-115-50 and the share of a
				  nonresident beneficiary of any estate or trust under provisions otherwise
				  applicable to nonresident individuals in estate or trust income or loss
				  attributable to Virginia sources is determined as follows:
1. Determine the items of income, gain, loss
				  and deduction derived from Virginia sources, which enter into the computation
				  of distributable net income of the estate or trust for the taxable year
				  (including such items from another estate or trust of which the first estate or
				  trust is a beneficiary). In the absence of special provisions, "overhead" items
				  such as interest, taxes, charitable deduction, fiduciary fees, attorney,
				  accountant, and return preparer fees, and other deductions shall be apportioned
				  to income within and without Virginia in the same ratio as gross income from
				  within and without Virginia.
2. Add
				  or subtract (as the case may be) the modifications described in § 58.1-322
				  of the Code of Virginia, and regulations promulgated thereunder, to the extent
				  relating to items of income, gain, loss and deduction derived from Virginia
				  sources which enter into the computation of distributable net income (including
				  all such items from another estate or trust of which the first estate or trust
				  is a beneficiary). No modification can be made under this subsection which has
				  the effect of duplicating an item already reflected in the computation of
				  distributable net income. For example, no modification would be made for
				  interest which is exempt for federal purposes but taxable in Virginia to the
				  extent the interest is already included in federal distributable net
				  income.
3. The amounts determined
				  under paragraphs 1 and 2 are allocated among the estate or trust and its
				  beneficiaries (including solely for the purposes of this allocation, resident
				  beneficiaries) in proportion to their respective shares of distributable net
				  income. The amounts so allocated have the same character under this article as
				  under the laws of the United States relating to federal income taxes. Where an
				  item entering into the computation of such amounts is not characterized by such
				  laws, it has the same character as if realized directly from the source from
				  which realized by the estate or trust, or incurred in the same manner as
				  incurred by the estate or trust.
Example 1: The Estate of Willie Smith (a nonresident
					 estate) owns rental property in Virginia which produced rent in calendar year
					 1983 in the amount of $10,000. Such amount is the only Virginia source income
					 for the year. Deductions for repair and maintenance amounted to $2,500, and
					 depreciation expense was $6,000. There is one beneficiary, who received 25% of
					 the distributable net income in calendar 1983. The shares of the Estate and
					 beneficiary in Virginia source income are computed as follows:
Rent
$10,000
Less depreciation
(6,000)
Less repair
(2,500)
$1,500
Plus
30% depreciation (Va. Code § 58.1-322B.6)
1,800
Net amount of Virginia source income
$3,300
Share of Estate (75% of $3,300)
$2,475
Share of beneficiary (25% of $3,300)
$825