tobe wrote:

- quote -

You'll love this answer: it depends <G> .

A trust is generally taxed by states in a manner similar to
individuals; that is, a resident trust is taxed on all of
its income; a nonresident trust is taxed on income from
sources in the state. The definition of a "resident" or
"nonresident" trust varies from state to state. In some
states, a testamentary trust is taxed on all of its income
if the decedent was a resident at the date of death.
However, a trust may also be taxed as a resident by the
state where one or more of the beneficiaries, or one or more
of the trustees, resides.

If the taxability of the trust depends on the residence of
the trustee or beneficiary, and the trustee or beneficiary
moves to another state, the trust becomes a nonresident of
the first state and potentially a resident of the new state,
depending on its definition of a resident trust.

You need to look at the laws of (at least) the following
states:

The state where the decedent was a resident at the date of
death. (Maybe no state, in this case, but depending on the
duration and purpose of the absence, and the laws of the
state involved, a person residing abroad could continue to
be a resident for tax purposes while living in a foreign
country.)

The state under whose law the trust was created.
The state where the trustee/beneficiary resides.

A trust may be a "resident" of more than one state at the
same time. Fortunately most states are relatively generous
in granting credit for taxes paid to other states by trusts.
That's another issue you need to look into in the
particular states that are involved.

Katie in San Diego

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

A testamentary trust was established on death of a US
citizen living abroad. The trustee, to whom current income
flows, also lived abroad, but moved to and now lives in the
US.

There is US source taxable (capital) non-distributed income
to the trust.

The State of the source of the taxable trust income taxes
the trust on that income. That is not the same State where
the Trustee lives, and at whose address the Trust is listed.

To what, if any, other jurisdiction does the trust itself
owe income tax?

Does the tax 'address' of the trust follow the Trustee if
and when he moves, or does it stay with the location where
the trust was initially set up?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >