Hi, I have done my federal income tax return, which included income distributed by a Texas testamentary trust reported to me on Schedule K-1. Upon starting my Utah state tax return, I am prompted for "items that need to be included in Utah taxable income if they were excluded from federal adjusted gross income," including "your share of additions distributed to you by a non-resident trust." I am not at all sure what this is supposed to mean. My first thought is that since the income reported to me on Schedule K-1 is included in my federal adjusted gross income this year, I don't need to add any additional income to my Utah state return. My second thought is that I would have to add additional income to my Utah state income tax return if my distribution included principal as well as income (not the case this year), because undistributed net income (previously taxed at the trust level for federal purposes, but not by any state because it's Texas trust and Texas has no income tax) had been accumulated and added to principal in prior years. I think the relevant Utah code section is 59-10-114(g). Am I on the right track here? Thanks for any insights.
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"Your share of additions distributed to you by a non-resident trust" appears to refer to Utah code §59-10-114(1)(g).
Enter any distribution received by a resident beneficiary of a nonresident trust of undistributed distributable net income realized by the trust on or after January 1, 2004, if that undistributed distributable net income was taxed at the trust level for federal tax purposes, but was 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.
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