Turst return 1040

[Kate1]

I have a Massachusett resident with three Massachusetts grantor trusts that has now moved to Maine. The resident is the trustee/benefactor in two of the trusts and his son is the benefactor in one of the trusts. All are now living in Maine excepting the original grantor who remains in Massachusetts. 

Do I file a Massachusetts return or a Maine return? And if a Maine return is a residential or nonresidential return?

Thanks for your help ~ Kate

[Brother Jack]

I've read your question 3 times and am still confused.

#1 a Grantor Trust is generally a trust where the Grantor is and remains the Trustee and Beneficiary. A 1041 is generally not required and all income remains and is taxed to the grantor on their 1040 tax return,

#2 your description seems to be describing beneficiaries other than the original Grantor who remains in MA.

#3 this sounds more like a complex trust which more details are required.

Sorry i couldn't be more definitive with an answer.

[Kate1]

Hello and thank you for your very quick response. You are correct this is not a grantor trust, my apologies. Yes in fact this is a complex trust. The trust originated by the mother/grandmother (a Mass resident) appointed her son as trustee to three trusts and beneficiary of two of the three trust with the grandson being the beneficiary of the remaining trust. 

The mother continues to live in MA the son and grandson are now and will continue to be Maine residents as of this year. 

In reading the MA Form 2 instructions it appears to me as long as the mother remains alive in MA then a MA return needs to be filed not a Maine return. If this is in fact correct I further believe it is a MA resident return until she passes and then there is no longer a requirement to file a MA return.

Thanks so much for your assistance.

[Brother Jack]

what powers did the Grandmother retain.

[Brother Jack]

sorry I hit reply too quick

thank you for the clarification now it's very clear.

If the Mother retains the right to revoke then you are correct you will file a MA Form 2.

If there is DNI for 100% of income then there will be no tax due as it will pass to the beneficiaries and you will indicate they are non residents. Maine will get the tax on the beneficiaries returns if required to file.