Section 50. Virginia taxable income of a nonresident estate or trust

A. The Virginia taxable income of a nonresident estate or trust shall be its share of income, gain, loss and deduction attributable to Virginia sources as determined under 23VAC10-115-60 increased or reduced, as the case may be, by:

1. The amount derived from or connected with Virginia sources of any income, gain, loss and deduction recognized for federal income tax purposes but excluded from the computation of distributable net income of the estate or trust; and

2. The net amount of any modifications as provided for in § 58.1-322 of the Code of Virginia and regulations promulgated thereunder (not including subsection D thereof) with respect to the income or gain referred to in A 1 of this section.

B. Example: Nonresident Trust Z owned rental property in Virginia. It disposed of the property and recognized a short-term capital gain of $10,000. The trust instrument provides that capital gains are allocable to corpus and are not paid, credited or required to be distributed to any beneficiary during the taxable year. Under federal law, the capital gain is excluded from the computation of distributable net income and, accordingly, must be added to the trust's share of income from Virginia sources. If the share of nonresident Trust Z in income, gain, loss and deduction attributable to Virginia sources is $45,000, the Virginia taxable income of Trust Z would be $55,000 ($45,000 + $10,000).

Historical Notes

Derived from VR630-5-362, eff. January 1, 1985.

Statutory Authority

§§ 58.1-203 and 58.1-362 of the Code of Virginia.