Ga. Comp. R. & Regs. R. 560-7-3-.07 - Fiduciaries
(1)
Purpose.
The purpose of this Rule is to provide guidance concerning the taxation
of fiduciaries as required under O.C.G.A. §
48-7-22.
(2)
Definitions. The term
"fiduciary" shall mean the same as defined in O.C.G.A. §
48-1-2.
(3) General Provisions.
(a) The provisions of this Rule (relating to
estates and trusts, fiduciaries, and beneficiaries) contemplate that the corpus
of a trust, or the income therefrom is no longer to be regarded as that of the
grantor. If, by virtue of the nature and purpose of the trust, the corpus or
income therefrom remains attributable to the grantor, these provisions do not
apply.
(b) In general, the income
of an estate or trust for the taxable year which is currently distributed
and/or distributable to the respective beneficiaries must be returned by and
will be taxed to the beneficiaries, but the income of a trust which is to be
accumulated or held for future distribution, whether consisting of ordinary
income or gain from the sale of assets included in the corpus of the trusts,
must be returned by and will be taxed to the fiduciary. However, regardless of
whether or not the income is taxable to the fiduciary or to the distributee,
the fiduciary is primarily responsible for reporting all income, allocation of
the tax being affected by permitting the fiduciary, under certain
circumstances, to show as a deduction the amounts credited or paid to the
distributee.
(c) From the gross
income of an estate or trust there are also deductible (in addition to the
deductions allowed individuals) the following:
1. Any income of the estate or trust for its
taxable year which is distributable currently by the fiduciary to a legatee,
heir or beneficiary, whether or not such income is actually
distributed.
2. Any income of the
estate of a deceased person for its taxable year which is properly paid or
credited during such year to a legatee or heir, and any income either of such
an estate or a trust for its taxable year, which is similarly paid or credited
during that year to a legatee, heir or beneficiary if there was vested in the
fiduciary a discretion either to distribute or to accumulate such
income.
3. Any amount described in
subparagraph (3)(c)1. and subparagraph (3)(c)2. as being deductible from the
gross income of the estate or trust shall be included in computing the net
income of the legatees, heirs, or beneficiaries, whether distributed to them or
not. In general there shall be taxed to the fiduciary:
(i) Income accumulated in trust for the
benefit of unborn or unascertained persons or persons with contingent interests
and income accumulated or held for future distribution under the terms of the
will or trust;
(ii) That part of
the net income of estates or trusts which has not been distributed or become
distributable to the beneficiaries during the taxable year;
(iii) Income received by estates of deceased
persons during the period of administration or settlement of estates;
and
(iv) Income which, in the
discretion of the fiduciary, may be either distributed to the beneficiaries or
accumulated, to the extent not distributed during the taxable year. A net loss
within a tax year substained by an estate or trust is a loss to the corpus of
the estate or trust, and is not claimable as a deduction by a beneficiary of
the estate or trust, unless otherwise provided for in the governing
indenture.
(d) A deduction, in lieu of a personal
exemption, shall be allowed to fiduciaries in accordance with O.C.G.A. §
48-7-26.
(e) The net income of deceased individuals
who, at the time of death, were residents and who died during the taxable year
or subsequent thereto without having made a return shall be taxed at the rates
and in the same manner as living persons. A return for any year or period for
which no return has been filed by the decedent prior to his death shall be made
and filed by the executor or administrator of the estate of such decedent or
the person or persons having charge of the properties of such decedent. See
Rule 560-7-7-.08 as
to the determination of the net income for the final return of a taxpayer who
dies during a taxable year.
(f) A
guardian, whether of an infant or other person, is a fiduciary, and as such is
required to make and file the Form 500 Return for his ward and pay the
tax.
Notes
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