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State Question: Which State to File?


samingeorgia

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New client -- a trust was created in 2020. The income-producing property is located in Illinois and the beneficiaries are in three other states. The Trustee lives here in Georgia.

There is a clause in the trust which states that the trust "shall be governed ... according to the laws of Illinois" -- so Illinois, right?

 

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Most trusts I deal with are all intangibles (stocks, bonds, etc.) but it sounds like you have a rental property? I'm not familiar with IL laws, but I would think that it would be an IL 1041, but as long as all the income is passed out, no tax will be due to IL, but the beneficiaries may have enough income to have to file a nonresident IL return.

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Trusts are usually "residents" (the term is "situs") in the state where it was originated and signed. Not required to be the same state as any trustee, or any business activity. Sounds like an Illinois trust with IL situs. Also sounds like filing is required in Georgia for the business activity there.

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