103 KAR 19:010.

Computation of income; estates and trusts.

 

      RELATES TO: KRS

141.010, 141.030, 141.190, 141.020

      STATUTORY

AUTHORITY: KRS Chapter 13A

      NECESSITY,

FUNCTION, AND CONFORMITY: This administrative regulation outlines procedure for

computing estate and trust income for Kentucky income tax purposes including

instructions covering both resident and nonresident situations.

 

      Section 1.

General. All provisions of KRS Chapter 141 (and related administrative

regulations) that apply to individuals shall also apply to fiduciaries and

returns filed by fiduciaries, except when such provisions conflict with

provisions dealing specifically with fiduciaries.

 

      Section 2.

Computation of Income. Taxable income of an estate or trust is net income as

defined in KRS 141.010(11) except:

      (1) The standard

deduction permitted individuals in KRS 141.080 is not allowed;

      (2) Federal

estate tax paid on income accrued at the date of death of a decedent is

deductible;

      (3) Deductions

that have been allowed on the Kentucky inheritance tax return or the Kentucky

individual income tax return cannot be claimed on the fiduciary income tax

return; and

      (4) Any

deductions (or federal tax) related to nontaxable income are not allowed.

 

      Section 3. Tax

Credits. A trust is allowed a tax credit of two (2) dollars; an estate is

allowed a tax credit of twenty (20) dollars.

 

      Section 4.

Resident Estate or Trust. A resident estate or trust shall report and pay tax

on all taxable income except that portion of net income distributable or distributed

during the taxable year, and that portion of the net income from intangible

personal property attributable to a nonresident beneficiary.

 

      Section 5.

Resident Beneficiary. A resident beneficiary must report and pay tax on his

share of the distributed or distributable income from a resident or nonresident

estate or trust.

 

      Section 6.

Nonresident Estate or Trust and Nonresident Beneficiaries. A nonresident

estate, trust, or beneficiary is subject to tax only on income received from

real or tangible personal property located in Kentucky. (IF-1; 1 Ky.R. 332;

eff. 2-5-75.)