§ 44-30-36. Share of a nonresident estate, trust, or beneficiary in income from Rhode Island sources. (a) General. The share of a nonresident estate or trust under § 44-30-35(1) and the share of a nonresident beneficiary of any estate or trust under § 44-30-32(a) in estate or trust income and deduction from Rhode Island sources shall be determined as follows:

(1) Items of distributable net income from Rhode Island sources. There shall be determined the items of income and deduction, derived from or connected with Rhode Island sources, which enter into the definition of "federal distributable net income" of the estate or trust for the taxable year, including the items from another estate or trust of which the first estate or trust is a beneficiary. The determination of source shall be made under regulations of the tax administrator in keeping with the applicable rules of § 44-30-32 as if the estate or trust were a nonresident individual.

(2) Addition or subtraction of modifications. There shall be added to or subtracted from, as the case may be, the modifications described in § 44-30-12(b) and (c)(excluding subdivisions (b)(4), (c)(3) and (c)(4) of that section) to the extent relating to items of income and deduction, derived from or connected with Rhode Island sources, which enter into the definition of "federal distributable net income", including the items from another estate or trust of which the first estate or trust is a beneficiary. No modification shall be made under this subsection that has the effect of duplicating an item already reflected in the definition of "federal distributable net income".

(3) Allocation among estate or trust and beneficiaries.

(i) The amounts determined under subdivisions (1) and (2) of this subsection shall be allocated among the estate or trust and its beneficiaries, including, solely for the purpose of this allocation, resident beneficiaries, in proportion to their respective shares of federal distributable net income.

(ii) The amounts so allocated shall have the same character as for federal income tax purposes. Where an item entering into the computation of the amounts is not characterized for federal income tax purposes, it shall have the same character as if realized directly from the source from which realized by the estate or trust, or incurred in the same manner as incurred by the estate or trust.

(b) Alternate methods of determining shares.

(1) If the estate or trust has no federal distributable net income for the taxable year, the share of each beneficiary, including, solely for the purpose of this allocation, resident beneficiaries, in the net amount determined under subdivisions (a)(1) and (a)(2) of this section shall be in proportion to his share of the estate of trust income for that year, under local law or the governing instrument, which is required to be distributed currently and any other amounts of the income distributed in that year. Any balance of the net amount shall be allocated to the estate or trust.

(2) The tax administrator may by regulation authorize the use of any other methods of determining the respective shares of the beneficiaries and of the estate or trust in its income derived from Rhode Island sources, and the modification related thereto that may be appropriate and equitable, on any terms and conditions that the tax administrator may require.

History of Section. (P.L. 1971, ch. 8, art. 1, § 1; P.L. 1971, ch. 204, art. 3, § 1; P.L. 2001, ch. 364, § 3; P.L. 2002, ch. 65, art. 9, § 1.)