All income of an estate or trust is taxed to the
fiduciary or the beneficiary. The conduit rules for taxing estates
and trusts are applicable for North Carolina income tax purposes.
Under the conduit rules, regardless of who is taxed, the income
retains its same character as when received by the estate or trust.
North Carolina's trust and estate tax is based on the state of
residence of the trust's income beneficiaries and not on the
of the trust's trustees or where the trust is created. North
Carolina law requires the tax to be computed on the taxable
income of the
trust that is for the benefit of a resident of this State, or
for the benefit of a nonresident to the extent that the income
(1) is derived from North Carolina sources and is attributable
to the ownership of any interest in real or tangible personal
property in this State or (2) is derived from a business, trade,
profession, or occupation carried on in this State.
Last modified on:
10/31/07 03:53:06 PM.