Mont. Admin. r. 42.30.102 - FIDUCIARY - FILING REQUIREMENTS

(1) Subject to (4), a fiduciary for a resident estate or resident trust is required to file a Montana Income Tax Return for Estates and Trusts (Form FID-3) if:

(a) the gross income of the estate from all sources exceeds an exemption allowance, regardless of any tax liability;

(b) the gross income of the trust from all sources exceeds an exemption allowance;

(c) the trust has any taxable income; or

(d) the estate or trust is filing a final year return.

(2) Subject to (4), a fiduciary for a nonresident estate, nonresident trust, part-year resident estate or part-year resident trust that has any item of income, gain, loss, and/or deduction derived from or connected with sources in Montana (including, but not limited to, a Montana trustee's intangible interest in a nonresident trust) is required to file a Form FID-3 if:

(a) the gross income of the estate from all sources exceeds an exemption allowance, regardless of any tax liability;

(b) the gross income of the trust from all sources exceeds an exemption allowance;

(c) the trust has any taxable income; or

(d) the estate or trust is filing a final year return.

(3) Form FID-3 is due on or before the 15th day of the fourth month following the close of the tax year of the estate or trust. If the due date falls on a weekend or holiday, the return is due the next business day.

(4) An estate or trust with a filing requirement as provided in (1) and (2) must complete a Form FID-3, unless otherwise provided in the following:

(a) A bankruptcy estate of an individual must file a Form FID-3, but complete only the heading portion and report the amount of tax computed on the attached copy of the individual's Montana tax return. Credits and payments that are applicable to the bankruptcy estate are reported on Form FID-3.

(b) A bankruptcy estate of a married couple filing a joint bankruptcy petition must file a Form FID-3, but complete only the heading portion and report the amount of tax computed on the attached copy of the joint Montana tax return. A joint bankruptcy estate is limited to one personal exemption in computing the amount of tax due. A married couple cannot use the filing status of married filing separately on the same return to determine their separate Montana income tax liabilities for a bankruptcy estate. If both spouses are filing for bankruptcy individually, then each spouse will complete a separate Form FID-3 and separate individual Montana income tax return. Credits and payments that are applicable to the bankruptcy estate are reported on Form FID-3.

(c) A business trust must file the following returns:

(i) a Montana Corporate Income Tax Return (Form CIT) if the trust files a U.S. Corporation Income Tax Return (Form 1120);

(ii) a Montana Partnership Information and Composite Tax Return (Form PR-1) if the trust files a U.S. Return of Partnership Income (Form 1065);

(iii) a Montana S Corporation Information and Composite Tax Return (Form CLT-4S) if the trust files a U.S. Income Tax Return for an S Corporation (Form 1120S); and

(iv) a Montana Disregarded Entity Information Return (Form DER-1) if the trust is a disregarded entity.

(d) A common trust fund that files a U.S. Return of Partnership Income (Form 1065) must file a Montana Partnership Information and Composite Tax Return (Form PR-1).

(e) An electing small business trust is subject to special filing requirements as provided in ARM 42.30.204.

(f) A foreign decedent's estate has the same filing requirements as a nonresident estate as provided in (2).

(g) A foreign trust has the same filing requirements as a nonresident trust as provided in (2).

(h) A pre-need funeral trust is subject to special filing requirements as provided in ARM 42.30.203.

(i) If an entire trust is a grantor trust, the fiduciary must file a Form FID-3 but complete only the heading portion and report the trust's activity on a separate supporting statement. The supporting statement and a complete copy of the federal Form 1041 must be included with Form FID-3. If the fiduciary is not the grantor, then the fiduciary must provide a copy of Form FID-3 and the supporting statement to the grantor.

(j) If only part of a trust is a grantor trust, the fiduciary must report the activity attributable to the grantor trust as provided in (i) and report the activity not attributable to the grantor trust on a form prescribed by this rule.

(k) A qualified settlement fund or designated settlement fund that is treated as a corporation for federal income tax purposes and that files a U.S. Income Tax Return for Settlement Funds (Form 1120-SF) must file a Montana Corporate Income Tax Return (Form CIT).

(l) A split-interest trust must file Form FID-3, but complete only the heading portion and report the trust's activity on a separate supporting statement, rather than on Form FID-3. The supporting statement and a complete copy of the federal Split-Interest Trust Information Return (Form 5227) must be included with the Form FID-3.

(m) If an entire trust is a qualified subchapter S trust (QSST), the fiduciary must file a Form FID-3 but complete only the heading portion and report the trust's activity on a separate supporting statement. The supporting statement and a complete copy of the federal Form 1041 must be included with Form FID-3.

(n) If only part of a trust is a QSST, the fiduciary must report the activity attributable to the QSST as provided in (m) and report the activity not attributable to the QSST on a form prescribed by this rule.

(o) A tax-exempt trust is subject to special filing requirements as provided in ARM 42.30.202.

(5) If a fiduciary is required to file Form FID-3, then a copy of the U.S. Income Tax Return for Estates and Trusts (Form 1041) must be submitted on paper or electronically with Form FID-3 as follows:

(a) if filing on paper, then the fiduciary must include copies of the federal schedules that substantiate gross income, deductions, and ordinary or throwback distributions to beneficiaries; or

(b) if filing Form FID-3 electronically, then the fiduciary must provide a complete copy of the federal income tax return with all accompanying schedules and statements to the department if requested.

(6) If a fiduciary is not required to, or does not, file a federal tax return for a tax year for which they are required to file a Form FID-3, the fiduciary must compute federal adjusted total income, complete the applicable federal forms and schedules and submit a copy of the forms and schedules with the Form FID-3. The words "Pro Forma" must be clearly marked at the top of the federal forms and schedules.

(7) If the fiduciary of a decedent's estate, a bankruptcy estate, or a trust is filing for a short tax year and the applicable tax forms are not available, the fiduciary may use the prior year's tax forms. If the fiduciary uses the prior year's tax forms, the fiduciary must incorporate any tax law changes that are effective for the applicable tax year but may use the prior year's exemption amount and tax rate brackets. A short-year tax return may not be filed electronically.

(8) The guardian of a ward who has income files an individual income tax return on behalf of the ward.

Notes

Mont. Admin. r. 42.30.102

NEW, 2016 MAR p. 22, Eff. 1/9/2016.