Legal Alerts/Details

New California Law Attacks NINGs and DINGs

July 31, 2023
  1. Treas. Reg. §§ 25.2511-2.

  2. See, e.g., Internal Revenue Code §§ 670 – 679.

  3. Please note, if an ING has California-source income, the ING is required to file a California fiduciary income tax return and pay California income taxes on the California-source income, to the extent that the California-source income was not actually distributed to a beneficiary in the tax year that it was earned. If California-source income is distributed to a beneficiary in the tax year that it is earned, that beneficiary is required to pay California income taxes on the distribution, regardless of the beneficiary’s residency status. 
    Other states may have similar rules relating to the taxation of “sourced” income. A discussion of the states other than California is omitted from this legal alert. 

  4. Franchise Tax Board’s Legislative Proposal C, Taxation of Income from an Incomplete Gift Non-Grantor (ING) Trusts (November 10, 2020). 

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