Tax Type
Fiduciary Income Tax
Individual Income Tax
Description
Returns for common trust funds
Topic
Returns/Payments/Records
Date Issued
07-11-1985
July 11, 1985
RE: Income Tax; Return for Common Trust Funds
Dear ****
You have requested a ruling as to which type of Virginia income tax return should be filed for common trust funds maintained by a commercial bank for its customers.
In a 1962 letter, reproduced at paragraph 11-8O1.25, CCH Virginia State Tax Reporter, the former State Tax Commissioner stated that common trust funds should file a Virginia fiduciary return, Form 770. Since that letter was written, Virginia adopted conformity with federal income tax laws. 1971 Acts of Assembly, ch. 171.
Under current law, the computation of Virginia taxable income starts with federal adjusted gross income (for individuals) or federal taxable income (other taxpayers). Therefore, similar accounting and reporting methods must be used in filing federal and Virginia income tax returns. Virginia Code §58.1-34O C and §58.1-44O C.
Accordingly, the same type of return must be filed for Virginia income tax purposes as filed for federal income tax purposes. Under Treasury Regulation §1.6032.1, a bank may file Form 1065, U.S. Partnership Return of Income for each common trust fund it administers. If federal Form 1065 is filed for a common trust fund, then Virginia Form 501, Virginia Partnership Return of Income must be filed for Virginia income tax purposes.
Sincerely,
W. H. Forst
Tax Commissioner
RE: Income Tax; Return for Common Trust Funds
Dear ****
You have requested a ruling as to which type of Virginia income tax return should be filed for common trust funds maintained by a commercial bank for its customers.
In a 1962 letter, reproduced at paragraph 11-8O1.25, CCH Virginia State Tax Reporter, the former State Tax Commissioner stated that common trust funds should file a Virginia fiduciary return, Form 770. Since that letter was written, Virginia adopted conformity with federal income tax laws. 1971 Acts of Assembly, ch. 171.
Under current law, the computation of Virginia taxable income starts with federal adjusted gross income (for individuals) or federal taxable income (other taxpayers). Therefore, similar accounting and reporting methods must be used in filing federal and Virginia income tax returns. Virginia Code §58.1-34O C and §58.1-44O C.
Accordingly, the same type of return must be filed for Virginia income tax purposes as filed for federal income tax purposes. Under Treasury Regulation §1.6032.1, a bank may file Form 1065, U.S. Partnership Return of Income for each common trust fund it administers. If federal Form 1065 is filed for a common trust fund, then Virginia Form 501, Virginia Partnership Return of Income must be filed for Virginia income tax purposes.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner