Current through Register Vol. XLI, No. 38, September 20, 2024
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.
