Untaxed Income of a Nonresident Trust

[Mikey2277]

Hello,

I am working on my Utah state tax filing and stuck on a specific item. It’s asking about “untaxed income of a nonresident trust”. I received money from a trust account in 2023. I was living in Utah at the time, but the trust was established in a different state. Do I need to report the amount that I received? 

I already found this information:

“Enter any distribution received by a Utah resident beneficiary of a nonresident trust of undistributed distributable net income realized by the trust, if the income was taxed at the trust level for federal tax purposes but not taxed at the trust level by any state. Undistributed distributable net income is considered to be distributed from the most recently accumulated undistributed distributable net income.” Source: https://incometax.utah.gov/additions/nonresi[product key removed]e.

Unfortunately, I’m having a hard time understanding that language, so any help would be much appreciated. 

Thank you! 

[tagteam]

If you are a Utah resident, then that state can generally tax you on all income received while you were a resident.

You may be able to get some sort of credit if you paid income tax on the distribution to a nonresident state.

Also, if the trust paid tax on the income/gain and the distribution was that of corpus, then the distribution is likely not taxable. 

Did you receive a K-1?

[Mikey2277]

@tagteam, thanks for the reply! No, I didn’t receive a K-1. I’m not a trustee. Should I still expect one? Also, I’m confused on the language about income and gains in this context. There were no gains from investment profits. 

[tagteam · Accepted solution]

@Mikey2277 Contact the trustee for further information.

If the trust had absolutely no income, gain, credits, et al, and the distribution consisted entirely of corpus, then there would be no need to issue a K-1. 

If the trust assumed liability for income tax due and paid any tax due, then there would also be no need to issue a K-1 if the trust had net income and/or gain.