Looking for a Minnesota Tax Forms And Templates? Download it for free!

Form M2

Before you complete Form M2,

Intangible income earned by a resident es-

Section 645 Election. Allows a qualified

tate or trust is considered Minnesota source

revocable trust to be treated and taxed as

you must first complete Federal

part of the related estate during the election

income. Intangible income is income from

Form 1041 and supporting sched-

period. If the election is made for federal

intangible personal property, such as stocks

ules.

income tax purposes, it also applies for

or bonds. [M.S. 290.17, subd. 2(c)].

Minnesota. Enclose a copy of federal Form

Round amounts to whole dollars. Drop

Tax Year

8855 or letter making the election.

amounts less than 50 cents and increase

If you are filing on a fiscal year basis, be

Nonresident. Check the Nonresident box

amounts 50 cents or more to the next higher

sure to enter the beginning and ending

if a nonresident trust/estate. Refer to the

dollar.

dates. Without the dates, your filing and

definitions of a resident trust/estate on page

payments may not be considered timely.

Line 2

1 of the Form M2 instructions to determine

Minnesota Tax ID Number

Deductions and Losses not

whether your trust/estate qualifies.

Be sure to put your Minnesota tax ID

Al lowed

Owns or Operates Business. Check this

number on Form M2. Without it, processing

Direct expenses should be allocated to the

box if the trust/estate owns or operates a

of the return is delayed, and your estimated

income to which it is associated. Indirect

business through the trust/estate. Provide

tax and extension prepayments cannot be

expenses should be allocated to each class of

the Federal Identification Number(FEIN)

verified and credited properly.

income in the proportion that each class of

of the business in the box provided. If the

Check Boxes

income bears to the total income. Only those

trust/estate owns or operates more than one

expenses that relate to the non-Minnesota

business, provide a list of all FEINs of the

Place an X in all boxes that apply to the

income should be added back on line 2 of

businesses in an attachment.

return that you are filing.

Form M2.

Form M706 Filed. Check this box if the

Final return. For income tax purposes, Min-

Deductions not allowed by Minnesota.

decedent’s estate or grantor’s trust had

nesota follows federal law on termination

Interest and other expenses deducted on

a M706 estate tax return filed and enter

of estates and trusts. All income, deductions

your federal return which relate to income or

the gross value of the estate on the line

and credits are passed through to the benefi-

gains from non-Minnesota sources must be

provided.

ciaries. If this is your final return, check the

added to your taxable income.

box on the front of Form M2.

Installment Sale of Pass-through Assets

Include administration fees and ex penses,

or Interests. Check this box if the trust or

Initial return. If this is the fiduciary’s first

interest, taxes, depletion and other deduc-

estate:

return filed in Minnesota, check the box on

tions (including the chari table deduction)

• executed an installment sale, after De-

the front of the form.

that are connected with or al lowed against

cember 31, 2016, of s corporation stock

income or gains not taxed by Minnesota. An

Bankruptcy estate. A separate and distinct

or partnership interests being reported on

example of this would be expenses incurred

taxable entity created when an individual

Form 6252,

in connection with a probate proceeding in

debtor files for bankruptcy under Chapter 7

• executed an installment sale, after

another state. [M.S. 290.17, subd. 1(b)].

or 11 of Title 11 of the United States Code.

December 31, 2016, of the assets of an s

If bankruptcy estate is checked, enter the

corporation or partnership being reported

Losses not allowed by Minnesota. Include

Bankruptcy debtor’s SSN in the Bankruptcy

on Form 6252, or

your total losses from non-Minnesota

debtor SSN box and, if filing jointly, enter

• owns an interest in an S corporation,

sources to the extent the losses are deducted

the second debtor’s SSN in the correspond-

partnership, trust, or estate reporting in-

in determining your federal taxable income

ing box).

stallment sale gains on line 7 of schedule

or loss.

KPI, KS, or KF, or line 10 of schedule

Composite income tax. If you are paying

Common examples of losses to include on

KPC.

composite income tax for your electing

line 2 are:

nonresident beneficiaries, check the box on

If you are required to check the box and the

• losses deducted on the sale or other dispo-

gain from the sale was distributed, complete

the front of Form M2 and see the instruc-

sition of real or tangible property outside

tions for line 13 on page 5.

line 7 of all applicable Schedules KF to

Minnesota,

report installment sale information to your

ESBT (Electing Small Business Trust). A

• casualty losses deducted on prop erty out-

beneficiaries. Instructions are provided with

non-grantor trust that has income from one

side Minnesota,

the Schedule KF Form.

or more S corporations. The portion of an

• losses deducted on the operation of a farm

Beneficiaries who are receiving schedules

ESBT that consists of stock of one or more

outside Minnesota,

KF with positive values on line 7 may not

S corporations is treated as a separate trust.

• out-of-state losses from partnerships,

be included in a composite return.

Irrevocable Trust. A trust is considered irre-

S corporations and other fiduciaries,

Line Instructions

vocable if the grantor no longer has control

• losses deducted on the operation of a trade

over the trust assets and administration.

or business from sources out side Minne-

Trust and estate income is based on income

Enter the date the trust became irrevocable.

sota, and

from Minnesota sources only. Therefore,

• losses deducted on the sale or other dis-

Grantor Trust. A trust is a grantor trust if

any non-Minnesota losses that are allo-

position of stocks, bonds, securi ties and

the grantor retains certain powers or owner-

cated to the fiduciary must be added back to

other intangible property by nonresident

ship benefits.

federal taxable income, and non-Min nesota

estates and trusts.

QSST. Check this box if a Qualified Sub-

income and gains must be sub tracted from

Continued

chapter S Trust.

federal taxable income.

Instructions For Form M2 - Minnesota Income Tax For Estates And Trusts (Fiduciary) - 2017 Page 4

Related Articles

Related forms

Related Categories