Taxation of Fiduciaries; Rate; Taxable Net Income of Estate or Trust; Exemptions; Computation of Net Income; When Taxable Year of Beneficiary Differs From That of Estate or Trust; Tax as Charge Against Estate or Trust

  1. Law
  2. Georgia Code
  3. Revenue and Taxation
  4. Income Taxes
  5. Imposition, Rate, and Computation; Exemptions
  6. Taxation of Fiduciaries; Rate; Taxable Net Income of Estate or Trust; Exemptions; Computation of Net Income; When Taxable Year of Beneficiary Differs From That of Estate or Trust; Tax as Charge Against Estate or Trust

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  1. The tax imposed by this chapter shall be:
    1. Imposed upon resident fiduciaries and upon nonresident fiduciaries:
      1. Receiving income from business done in this state;
      2. Managing funds or property located in this state; or
      3. Managing funds or property for the benefit of a resident of this state;
    2. Imposed upon fiduciaries subject to the tax at the rates provided in this article for single individuals;
    3. Levied, collected, and paid annually with respect to:
      1. That part of the net income of an estate or trust which has not become distributable during the taxable year. It is the purpose of this Code section to tax fiduciaries or beneficiaries on all income otherwise taxable under this chapter. Income received by a resident fiduciary shall not be subject to the tax imposed by this chapter when the income is accumulated for, is distributed, or becomes distributable during the taxable year to a nonresident of this state and when the income was received from business done outside this state, property held outside this state, or intangible property, other than from the licensing for use of the property, held by a fiduciary, including, but not limited to, gains from the sale or exchange of the property. No return of income exempt under this subparagraph shall be required;
      2. The taxable net income received during the taxable year by a deceased individual who at the time of death was a taxpayer and who died during the taxable year or subsequent to the taxable year without having made a return; and
      3. The entire taxable net income of an insolvent or incompetent person, whether or not any portion of the taxable net income is held for the future use of the beneficiaries, when the fiduciary has complete charge of the net income.
  2. The net income of the estate or trust shall be computed in the same manner and on the same basis as in the case of an individual.
  3. If the taxable year of a beneficiary is different from that of the estate or trust, the amount which the beneficiary is required to include in computing his net income shall be based upon the income of the estate or trust for any taxable year of the estate or trust ending with or within the beneficiary's taxable year.
  4. The tax imposed upon a fiduciary shall be a charge against the estate or trust.

(Ga. L. 1931, Ex. Sess., p. 24, § 6; Code 1933, § 92-3103; Ga. L. 1937, p. 109, § 4; Ga. L. 1937-38, Ex. Sess., p. 150, § 4; Ga. L. 1966, p. 219, § 1; Code 1933, § 91A-3603, enacted by Ga. L. 1978, p. 309, § 2; Ga. L. 1979, p. 5, § 64; Ga. L. 1987, p. 191, § 2.)

Cross references.

- Trusts generally, T. 53, C. 12.

Editor's notes.

- Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, provides that this Act is applicable to taxable years ending on or after March 11, 1987, and that a taxpayer with a taxable year ending on or after January 1, 1987, and before March 11, 1987, may elect to have the provisions of that Act apply.

Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, also provided that tax, penalty, and interest liabilities and refund eligibility for prior taxable years shall not be affected by that Act.

Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, also provided that provisions of the federal Tax Reform Act of 1986 and of the Internal Revenue Code of 1986 which as of January 1, 1987, were not yet effective become effective for purposes of Georgia taxation on the same dates as they become effective for federal purposes.

Law reviews.

- For article, "To Tax or Not to Tax: State Income Tax on Trusts After North Carolina Department of Revenue v. The Kimberly Rice Kaestner 1992 Family Trust," see 25 Ga. St. B.J 26 (Feb. 2020).

RESEARCH REFERENCES

C.J.S.

- 85 C.J.S., Taxation, § 1989 et seq.

ALR.

- Deductibility, in determining individual income tax of trustee or other fiduciary, or amount paid by him, or for which he is responsible, on account of an improper investment, 107 A.L.R. 443.

Allocation between capital and income of income tax in respect of trust, 108 A.L.R. 1138.

Liability of settlor for income tax in respect of income of short-term trust, or trust over which he retains control and management, 166 A.L.R. 1308.

Income tax: construction and application of 1942 amendment of § 162(b) of Internal Revenue Code as to taxation or deduction of income of trust or estate to be distributed by fiduciary to legatees, heirs, or beneficiaries, 1 A.L.R.2d 1283.

Modern status of rules governing allocation of stock dividends or splits between principal and interest, 81 A.L.R.3d 876.


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