W. Va. Code R. § 110-21-38

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

Section 110-21-38 - West Virginia Taxable Income Of Nonresident Estate Or Trust

38.1. General. - Certain income of a nonresident estate or trust (like certain income of a nonresident individual) is subject to taxation under the West Virginia Personal Income Tax Act. Nonresident estates and trust are defined in Section 7 of these regulations. The rates referred to in Section 4 of these regulations are applied against the taxable income of the estate or trust. The taxable income of a nonresident estate or trust does not include the amount distributable or properly paid or credited to the beneficiaries because beneficiaries are taxed on their distributive shares of the estate or trust and the estate or trust is taxed on the remaining balance of the income not distributed.

38.1.1. The West Virginia taxable income of a nonresident estate or trust is its federal taxable income to the extent derived from or connected with West Virginia sources subject to the applicable West Virginia exemption. Thus, subject to the applicable West Virginia exemption, the West Virginia taxable income of a nonresident estate or trust includes its share of federal distributable income and, in addition thereto, any other items of income, gain, loss or deduction of the estate or trust recognized for federal income tax purposes but not included in federal distributable net income to the extent that such share and other items are derived from or connected with West Virginia sources.

38.1.2. Items In Distributable Net Income. - The share of a nonresident estate or trust in the items of income, gain, loss and deduction, derived from or connected with West Virginia sources, which enter into the federal definition of distributable net income is the amount, if any, by which such items exceed the aggregate of all the beneficiaries' shares therein. The share of the nonresident estate or trust is determined in accordance with W. Va. Code '11-21-39 and Section 39 of these regulations.

38.1.3. Items Not In Distributable Net Income. - The amount of any West Virginia connected items of income, gain, loss and deduction recognized for federal income tax purposes but excluded from the federal definition of distributable net income, must be added to or subtracted from, as the case may be, the estate's or trust's share of items reflected in distributable net income. The determination of the source of such items is made in accordance with the applicable rules of Sections 32 of these regulations and the provisions of W. Va. Code '11-21-32.

38.1.4. Exemption. - Each estate or trust is allowed a West Virginia exemption of six hundred dollars ($600), regardless of the amount of the federal exemption. An estate or trust is not allowed any exemption for dependents. The West Virginia exemption of six hundred dollars ($600) is allowed an estate or trust even though the particular return filed may be for a taxable period of less than twelve (12) calendar months where the election is allowable federally.

38.2. West Virginia Source Rules. - For the purpose of this regulation, an item of income, gain, loss or deduction is considered derived from or connected with West Virginia sources when any such item is attributable to the ownership by the estate or trust of any interest in real or tangible personal property in this State or when the item is attributable to a business, trade, profession or occupation carried on in West Virginia by the estate or trust, in accordance with the applicable rules set forth in Section 32 of these regulations pertaining to nonresident individuals. Deductions with respect to capital losses, net long-term capital gains, and net operating losses shall be based solely on income, gains, losses and deductions derived from or connected with West Virginia sources, but such West Virginia items shall otherwise be computed or determined in the same manner as the corresponding federal items.

W. Va. Code R. § 110-21-38