CA Form 541 - Do I need to file??

[jhouse78]

I'm the trustee for a trust doing its first and final CA Form 541.  I'm required to file Federal because the trust had income, but in the CA Instructions it says (I've checked where applicable):

The trustee may have to file a return if the trust meets any of these:

• The trustee or beneficiary (non-contingent) is a California resident  ✓
• The trust has income from a California source ✓
• Income is distributed to a California resident beneficiary ✓

And the trust has:

• Gross income is over $10,000 ✓
• Net income is over $100

The net income on my federal return is actually negative number (a loss) due to loss on sales of bonds. 

The only thing distributed to beneficiaries was corpus (principal)

Any ideas?

[Vanessa A · Accepted solution]

Yes, you will need to file.  Since you have a check mark next to gross income of more than $10,000, you will need to file.  The net income does not come into play if your gross income is greater than $10,000. 

You will need to file the 541 and distribute the k-1's which will include the distributions.  

"Trust. The fiduciary (or one of the fiduciaries) must file Form 541 for a trust if any of the following apply:

• Gross income for the taxable year of more than $10,000 (regardless of the amount of net income)
• Net income for the taxable year of more than $100" CA 541 Instructions