Tax Requirements for North Carolina Trusts

Asset Protection

In many states, an important factor in determining whether the trust is taxable is where the beneficiaries, settlor, and trustees are domiciled. A tax attorney may help determine how trust assets might need to be structured respective to a state’s tax laws to achieve the most favorable tax treatment.

Do you need to pay income tax on a trust? Read below or contact a lawyer to find out:
North Carolina Taxes on Trusts
Income tax must be paid on trusts that meet the requirements below, according to the North Carolina Department of Revenue. First, the trust must be required to file a federal return on the income earned by the trust. In addition, the trust must either:
1. Derive income from North Carolina sources or
2. Derive any income which is for the benefit of a resident of North Carolina.
The D-407 must be filed by April 15th for trusts on a calendar year basis, or by the 15th of the fourth month after the end of the fiscal year if on a fiscal year basis.
The tax attorneys in Chapel Hill at TrustCounsel recently posted the different tax requirements affecting trusts in each of the states our firm serves. Read more about tax requirements on trusts in Tennessee, Florida, and New York.
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