Can you give us more detail about the changes in the Ohio fiduciary income tax?

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Q. Can you give us more detail about the changes in the Ohio fiduciary income tax?

A. There are still a lot of unanswered questions on how this tax will work and technical correstions which hopefully can be made before 12/31/02 according to the Tax Commissioner. This is a brand new tax on trusts. Applies to all existing trusts. Resident trust is: 1. One which is created or funded by a pour over will of a decedent domiclied in Ohio (the income tax definition of domicile is used for this purpose). 2. Created by grantor who is domiciled in Ohio 3. Trust which became irrevocable while the grantor was an Ohio resident. Must have at least 1 Ohio resident beneficiary (defined as potential current beneficiary whether distributions made or not). This could include Irrevocvable Life Insurance Trusts created by grantor domiciled in OH at creation of trust but domiciled in another state at date of death . Grantor trusts and 501C3 trusts are exempt but other charitable trusts are not. The Commissioner hopes to get a technical correction passed before the end of the year which would exempt all charitable trusts but does not guarantee it will happen. Nonresident trusts are subject to tax on Ohio modified income which can include gains on sales of OH businesses, partrnerships, LLP, LLC, etc. As it stands, if the trust is able to determine where the assets of a corporation or business are located it is subject to tax on the income allocated to OH. The corporate franchise tax rules are used to determine the Ohio ratio. The bankers are trying to get this limited to closely held corps. www.state.oh.us/tax/ has the worksheet to calculate estimated payments due. More detailed information is on the site as well. It is really too complex to do more than I have here. The Bill creating it is Amended S.B. No.261,124th General Assembly 2001-2002. Passed 6/02.

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