Okla. Admin. Code § 710:50-23-1

Current through Vol. 42, No. 4, November 1, 2024

Section 710:50-23-1 - Fiduciaries

(a)State income tax reporting requirements.

(1) The Income tax period of an estate is initially established the day following the date of death and the estate representative may elect an annual closing period for the estate to be the last day of any month not to exceed twelve months. Once an estate tax period has been established, it will remain the same throughout the period of administration up to and including the final decree and court order for distribution.

(2) During the period of the administration of an estate, the liability for the filing of an Oklahoma Income Tax Return for the estate and the payment of any tax due, shall be that of the representative of the estate.

(3) Only that income properly paid, credited or distributed to the beneficiaries, pursuant to a court order or under the terms of the will, may be deducted from the income of the estate.

(4) The Court Order for Final Decree is deemed to distribute both income and corpus, therefore the amounts of income generated during such final period must be shown on the final Oklahoma Income Tax Return of the estate as a distribution showing also the name, address and social security number of each beneficiary, as well as the amounts and types of income so distributed to each.

(5) The representative of the estate, such as the administrator, executor or personal representative, is responsible for reporting the correct amount of income tax due for all years of the estate and must secure a certificate of clearance from the Oklahoma Tax Commission, disclaiming any further Oklahoma Income Taxes due or owing by the decedent or the estate for which the representative acts.

(6) Wills and/or Trust Instruments shall be filed with the initial filing of Trust or Estate return, so the flow of income can be determined.

(7) Returns of Trusts and Estates are due on the 15th day of the fourth month following the close of the taxable year.

(b)Certificate of clearance. Prior to the issuance of a certificate of clearance, all taxes due from Decedent's prior years' returns must be paid.

(c)Resident/nonresident.

(1) Domicile is the primary determining factor in interpretation.

(2) A residence at death creates a resident estate throughout probate. A testamentary trust of such an estate is likewise a resident until distributed.

(3) Grantor trusts follow the situs of the grantor.

(4) Intervivos trust depends upon the trust language.

(5) The residence of the executor, administrator or trustee has no bearing on the residence of the estate or trust.

(d)Characteristics of income and deductions. Income and deductions shall retain the same characteristics as reported to and allowed by the Internal Revenue Service (I.R.S.). Example: Personal service income reported to the I.R.S. shall be treated as personal service income to Oklahoma and not as business income or any other type of income.

(e)Deductions on fiduciary return. There is no deduction for state estate tax for income in respect of the decedent. There is no deduction for interest paid on payments for Federal Estate Tax, unless the election is made to deduct this interest on the Federal Fiduciary Income Tax Return. The election to deduct administration expenses and losses on the fiduciary return in lieu of the estate tax return; must follow the federal election, and a statement must be filed with the return waiving the right to deduct the expenses and losses on Oklahoma Estate Tax form 454. There is no deduction for Federal Income Tax paid in the fiduciary return.

Okla. Admin. Code § 710:50-23-1

Amended at 9 Ok Reg 3031, eff 7-13-92; Amended at 15 Ok Reg 2811, eff 6-25-98