Trust Return RLT

[S T]

Have a taxpayer that passed away Feb 2015 - had a RLT - which was originally drafted under Calif Law - Taxpayer moved to Utah - did not update the Trust for Utah Law - T/P had a personal residence in Utah, and a Brokerage-Investment Account maintained by California Broker, and has been filing Utah personal returns for 10 years or more. These are the only two items in the RLT - now irrevocable.

When Trust sold personal residence in Utah - the trustee only had to sign a form to clear title and all reporting is in name of the Irrevocable Trust in California.

Question - which State do I file the associated 1041 form for State - Calif or Utah - Successor Trustee is California, two beneficiaries are California and 1 beneficiary is Utah.

Should I file one for each State to clear records?

I should be showing loss on Form 1041 no taxable income, and maybe a small amount of passthrough on expenses.

Thanks

Sandy

[Roland Slugg]

Utah only. The house was in Utah, not California, and the location of the investment broker is irrelevant. The situs of intangible investments is the location of the underlying owner ... the decedent when he was still alive. Some may argue that the investments assumed a California situs after the DOD, since the Trust was formed in California, and the successor trustee is located there. I'm not sure if that is so, but what difference does it make? You might have to use a California address on the Trust's return, since the successor trustee is there, but if there's no taxable income, it won't matter anyway. All the income, if there is any, will flow to the benes via Schedules K-1. If there is income from the Trust, the two benes who are in California will report it on their own California returns, of course, and the Utah bene will report his share in his Utah return.

[S T]

Thanks Roland

[Gretel]

Same issue

I have a similar issue and was glad you posted. I also believe that this article is of help: https://www.naepc.org/journal/issue08d.pdf

[S T]

Thanks Gretel for the link, it is helpful and can be used as a resource

Sandy