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joannebaca
Level 2

Trust Tax Return

My dad left cash in his New Mexico Credit Union account with the beneficiary as his trust with me as the death trustee.  I set up a trust account in Texas and deposited the money there.  I know I have to file a federal tax return for the trust, however I am wondering if I have to file a state tax refund since the money came from a New Mexico Credit union paid to the trustee, myself.  There was no trust account in New Mexico, but the trust documentation originated in New Mexico.

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Accepted Solutions
tagteam
Level 15

Trust Tax Return

States have different rules for trust "residency". 

 

Further, if the trust had New Mexico source income it might have to file a New Mexico return.

 

See https://www.tax.newmexico.gov/all-nm-taxes/2020/10/23/fiduciary-income-tax-for-trusts-and-estates

 

Regardless, note the income threshold for filing a return (at the link above). Trust corpus (or principal) does not count; only income/gain is considered to be taxable.

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1 Reply
tagteam
Level 15

Trust Tax Return

States have different rules for trust "residency". 

 

Further, if the trust had New Mexico source income it might have to file a New Mexico return.

 

See https://www.tax.newmexico.gov/all-nm-taxes/2020/10/23/fiduciary-income-tax-for-trusts-and-estates

 

Regardless, note the income threshold for filing a return (at the link above). Trust corpus (or principal) does not count; only income/gain is considered to be taxable.

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