Current through Vol. 42, No. 1, September 16, 2024
(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.
Amended at 9 Ok Reg
3031, eff 7-13-92; Amended at 15 Ok Reg 2811, eff
6-25-98
