W. Va. Code R. § 110-21-18

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 110-21-18 - West Virginia Taxable Income Of Resident Estate Or Trust

18.1. General. - The income of a resident estate or trust is subject to taxation under the provisions of the West Virginia Personal Income Tax Act. The rates referred to in Subsection 4.1 of these regulations are to be applied against the taxable income of the estate or trust in determining the personal income tax liability of such estate or trust.

18.1.1. The West Virginia taxable income of a resident estate or trust means its federal taxable income as defined pursuant to the laws of the United States for the taxable year with certain modifications. Thus, the federal taxable income of the estate or trust is the starting point for computing the West Virginia taxable income. This method of computing the West Virginia taxable income of an estate or trust applies, for example, in:

(1) the computation of the West Virginia taxable income of an estate for the first taxable period thereof starting with the day following the decedent's death, and

(2) the computation of the West Virginia taxable income for the final taxable period of an estate or trust ending at the date of termination thereof.

18.1.1.1. The computation of the taxable income of a resident decedent on the final return ending with the date of his death is computed in the same manner as the taxable income of a resident individual.

18.2. Modification of Federal Taxable Income. - In order to determine the West Virginia taxable income of a resident estate or trust, two (2) modifications must be made. These modifications are the exemption modification and the fiduciary adjustment.

18.2.1. Exemption Modification. - Each estate or trust is allowed a West Virginia exemption of six hundred dollars ($600). An estate or trust is not allowed any exemption for dependents.

18.2.1.1. In computing the West Virginia taxable income of a resident estate or trust six hundred dollars ($600) shall be subtracted from the estate's or trust's federal taxable income and there shall be added to the estate's or trust's federal taxable income the amount of its federal deduction for a personal exemption.

18.2.2. Fiduciary Adjustment. - The applicable modifications as described in Subsections 12.2 and 12.3 of these regulations relating to items of income, gain or deduction may be applicable against the federal taxable income of the estate or trust when computing its West Virginia taxable income. These modifications shall be first combined in a single net amount. This amount, which may be a positive or negative, constitutes the fiduciary adjustment. After this amount is computed, it is then allocated in the manner described under W. Va. Code '11-21-19 and Section 19 of these regulations. The amount, which is allocable to the fiduciary, is added to or subtracted from the federal taxable income of the estate or trust (depending on whether it is a positive or negative number) to arrive at the West Virginia taxable income of such estate or trust.

W. Va. Code R. § 110-21-18