Rhode Island Code of Regulations
Title 280 - Department of Revenue
Chapter 20 - Division of Taxation
Subchapter 55 - Personal Income Tax
Part 7 - Trust Distributions (280-RICR-20-55-7)
Section 280-RICR-20-55-7.9 - Resident Beneficiaries' Treatment of Accumulation Distribution by a Trust

a. The Rhode Island income tax liability computed based on the exclusion of the accumulated distribution from Federal taxable income. Rhode Island taxable income would then be calculated using this adjusted Federal Taxable Income, or

b. The Rhode Island income tax liability computed based on the Federal taxable income including the amount of accumulation distribution less the beneficiary's allocable portion of the Rhode Island income previously included in RI taxable income of the trust.

a. Based upon Federal "throw back" rules, determine the preceding years to which the accumulation distribution shall be carried;

b. Recompute the Rhode Island personal income tax liability for each year including the accumulation distribution by computing the Federal income tax liability and applying the appropriate Rhode Island rate for that year;

c. From the amounts determined in § 7.9(B)(1)(b) of this Part, subtract the original Rhode Island personal income tax liability for the beneficiary for each year to arrive at the difference in Rhode Island income tax attributable to the distribution (not less than zero);

d. From the amounts determined in § 7.9(B)(1)(c) of this Part, subtract the Rhode Island income tax previously paid by the trust for each year applicable to the accumulation distribution (not less than zero). If all of the previously taxed income is not distributed, the amount of Rhode Island tax to be subtracted should be in the same proportion as the amount of actual distribution bears to the total accumulated income for that year.

e. Add the amounts determined in § 7.9(B)(1)(d) of this Part above to arrive at the Rhode Island tax adjustment.