Tax Type
Fiduciary Income Tax
Individual Income Tax
Description
Trust recipient
Topic
Estates and Trusts
Date Issued
06-20-1988
June 20, 1988
Re: §58.1-1821 Application; Fiduciary Income Tax
§58.1-370 Credit for Recipient of Accumulation Distribution
Dear**************
This is in response to your letter of January 5, 1983, in which you applied for correction of an assessment of fiduciary income tax. I apologize for the delay in responding.
Facts
A trust was the recipient of an accumulation distribution from another trust and claimed the federal and Virginia credits for taxes paid on accumulated income. In an office audit the Virginia credit was disallowed because the recipient was not an individual.
Discussion
Virginia Code §58.1-370 allows the credit to "[a] beneficiary whose Virginia taxable income includes all or part of an accumulation distribution . . ." There is nothing in the section which limits the credit to individuals or excludes other types of taxable entities which may be a beneficiary of a trust.
Section 58.1-370 is part of Article 7 (Tax Credits for Estates and Trusts). It is entirely separate from Article 2 (Individual Income Tax) and Article 6 (Taxation of Estates and Trusts). Thus, there is no basis for limiting the term "beneficiary" for purposes of the credit to exclude any class of taxpayer.
Determination
Accordingly, the assessment and any accrued interest thereon will be abated.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner