Non-Resident Inter vivos trust in MA

[springmisery]

My husband's Trust was created by his will in 2009 and funded in 2009 in CT. I am the Trustee and sole Beneficiary. He died in 2017. I had always done a federal 1041 and CT-1041, but I have moved to MA. From what I have read in MA's 830 CMR, 62.10.1 the Trust is subject to MA taxation only to the extent of income derived by the Trustee from the carrying on of a profession, trade or business within MA. The only income in this Trust is dividends and capital gains distributions. Under "Character of Beneficiaries,"a Resident Beneficiary, which I am, all of "such income" is taxable to the Trust. What does "such income" refer to? Do I need to fill out MA's Fiduciary return since no income was derived from the carrying on of a profession, trade or business within MA?

Thank you for your help.

[DavidD66]

Yes, you need to file a MA tax return for the trust.  if one or more of a trusts' trustees are Massachusetts residents, the trust is subject to Massachusetts taxation.  An irrevocable trust will only pay tax on the income it retains.  If the trust distributes all of its income to the beneficiary (you) then the trust will not pay MA income tax.  The income will be taxable to you and reported on your K-1.