Instructions For Form M2 - Minnesota Income Tax For Estates And Trusts (Fiduciary) - 2017

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2017 Minnesota Income Tax for Estates and Trusts
(Fiduciary) Form M2 Instructions
What’s New for 2017
Filing Requirements
Questions?
An estate or trust - regardless if it is consid-
You can find forms and information, including
Federal Adjustments
ered a resident - must file Form M2 when:
answers to frequently asked questions and
Definitions used in determining Minnesota
options for filing and paying electronically, on
1. There is $600 or more of gross income
tax are based on the Internal Revenue Code,
our website at:
allocable to Minnesota; or
as amended through December 16, 2016.
2. There is a nonresident alien as a benefi-
Since that date, the federal Disaster Tax
Send us an e-mail at:
ciary.
Relief and Airport and Airway Extension
businessincome.tax@state.mn.us
[M.S. 289A.08.subd. 2]
Act of 2017 (Pub. L. 115-63), and Tax Cuts
Call us at 651-556-3075
and Jobs Act (Pub. L. 115-97) have been
When required, the trustee of a trust or the
enacted by Congress. These laws contain a
personal representative of an estate is re-
Need Forms?
number of provisions that may affect your
sponsible for filing the Minnesota Form M2,
Go to .
Minnesota tax. See Federal Adjustments for
Income Tax Return for Estates and Trusts
This information is available in alternate
Businesses on page 10 to determine if you
(Fiduciaries) and for paying the tax.
formats.
need to adjust your return.
Bankruptcy estates. If the fiduciary of a
Continue to check our website for further
For trusts that became irrevocable or
bankruptcy estate of a Minnesota resident
updates.
filed a federal return, a Minnesota return
were first administered in Minnesota
must also be filed. Use Form M1, Individual
Accelerated Installment Sale Gains
before January 1, 1996: A resident trust,
Income Tax Return, to determine the Min-
except a grantor type trust, means any trust
Beginning in tax year 2017, some
nesota tax and attach it to Form M2. File it
administered in Minnesota.
nonresident individual taxpayers will
in the same way you file federal returns.
be required to accelerate recognition of
To be considered a resident trust adminis-
installment sale gains if the sales involve S
Resident estates. An estate is considered a
tered in Minnesota, you must meet two of
corporation stock or assets, or partnership
Minnesota estate if:
the following three criteria:
interests or assets. The new law applies to
• the decedent was a resident of Min nesota
• A majority of the discretionary investment
sales that are executed by individuals, and
at the time of death, or
decisions are made in Minnesota,
to sales that are executed by partnerships, S
• the personal representative or fidu ciary
• The majority of discretionary distribution
corporations, trusts or estates, and multi-
was appointed by a Minnesota court—or
decisions are made in Minnesota, and
tiered pass-through structures.
the court administration was performed
• The trust’s official books and records are
in Minnesota—in other than an ancillary
A new checkbox has been added to Form
kept in Minnesota.
pro ceeding.
M2, and new lines have been added to
[M.S. 290.01, subd. 7b]
Schedule KF to ensure correct reporting to
File the first Form M2 cov ering the period
beneficiaries.
Before You File
from the date of the decedent’s death to the
Federal Automatic Extension for Filing
end of the tax year. Be sure to check the box
Complete a Federal Return
to indicate it is the fiduciary’s initial return.
Minnesota Statute 289A.19, subd. 7 was
Before you complete Form M2, complete
amended to provide fiduciary income tax
File subsequent returns for later years until
federal Form 1041, U.S. Income Tax Return
filers an automatic and equivalent extension
the end of the estate’s ad ministration period.
for Estates and Trusts, and supporting
of the return filing deadline when a federal
schedules. You will need to reference them.
Resident trusts. The definition of a resident
extension is granted. The extension does not
trust differs depending on the date—be-
Complete
affect the due date for payment. The change
fore or after December 31, 1995—the trust
If you are a:
federal Form:
is effective for:
becomes irrevocable or is first administered
• All 2017 calendar year filers (with year-
Charitable remainder (enter
in Minnesota.
end of December 31, 2017)
zero on Form M2, lines 1 and 9) . . . 1041A
For trusts that became irrevocable or
• Fiscal year filers with year-end of
or charitable lead trust . . . . . . . . . . .or 5227
were first administered in Minnesota
February 28, 2017 or after
Designated or qualified settlement
after December 31, 1995: A resident trust
fund (under IRC section 468B) . . . 1120-SF
means a trust, except a grantor type trust,
that either:
Contents
Qualified funeral trust . . . . . . . . 1041-QFT
1. was created by a will of a decedent who
Electing small business trust (ESBT) .1041
What’s new . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
at his or her death was a Minnesota resi-
General information . . . . . . . . . . . . . . . . . . .1–3
dent, or
Minnesota Tax ID Number
Filing requirements . . . . . . . . . . . . . . . . . .1
Before you file. . . . . . . . . . . . . . . . . . . . . . .1
2. is an irrevocable trust, and at the time the
Your Minnesota tax ID is the seven-digit
Due dates and extensions . . . . . . . . . . . . .2
trust became irrevocable, the grantor was
number you’re assigned when you register
Payment options. . . . . . . . . . . . . . . . . . . . .2
a Minnesota resident. A trust is con-
with the department. It’s important to in-
M2 line instructions . . . . . . . . . . . . . . . . . . .4–8
sidered irrevocable if the grantor is not
clude your Minnesota tax ID on your return
Allocation of adjustments . . . . . . . . . . . . . . . .9
treated as the owner as defined in sections
Federal adjustments . . . . . . . . . . . . . . . . . . . .10
so that any payments you make are properly
671 to 678 of the IRC.
Tax tables. . . . . . . . . . . . . . . . . . . . . . . . . 11–14
credited to your account.
Continued
1

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