Fill in a Valid Massachusetts 2G Form

Form 2G

Grantor’s or Other Owner’s Share of Income, Deductions, Credits, Etc. of a Grantor-type Trust

1999

Massachusetts

Department of

Revenue

Firm name (or yours, if self-employed) and address

Employer Identification number

Check if self-employed

Massachusetts has adopted the Internal Revenue Code (IRC) grantor-type trust rules as contained in IRC Sections 671 through 678, Massachusetts General Laws (MGL), Ch. 62, sec.10, as amended by 1976 Acts, c. 510. The trustee of a grantor-type trust is required to file Form 2G and send a copy of it to the grantor/owner who is required to report the income, deductions and credits on his/her Massachusetts individual income tax re- turn. A resident grantor or other owner must include grantor-type trust income in calculating his/her estimated tax.

Generally, a grantor-type trust exists when one of the following is present:

•the trust income is distributable to/or accumulated for the ben- efit of the grantor or the grantor’s spouse;

•the grantor holds a reversionary interest in the trust which is not postponed beyond a 10-year period;

•the grantor has the power to revoke the trust in his/her favor;

•the grantor has the power to control the beneficial enjoyment of the trust corpus or income;

•the grantor has retained certain administrative powers with re- spect to the trust; and

•a person, other than the grantor, has the power to obtain the trust corpus or income.

Fiduciary expenses and compensation are not deductible.

All supporting details, i.e., Schedule D, if you have long-term capital gains or (losses), must be attached. Massachusetts has not adopted IRC Regulation 1.671-4(b) regarding consolidated filing of grantor-type trusts.

Long-term Capital Gains

The trustee may provide each grantor or beneficiary with a break- down of long-term capital gains and (losses) by the applicable hold- ing period(s). If the trustee does not do so, all long-term capital gains and (losses) are to be reported as being held for more than one year but not more than two years, and excluding long-term gains on collectibles taxed at 5%.

Nonresident Withholding

A trustee is required to deduct and withhold from any income sub- ject to taxation (Massachusetts source income — MGL, Ch. 62, sec. 5A) at the applicable rates when the grantor or other owner is a nonresident. Form 2-ES, Estimated Income Tax Payment Vouch- ers, and the quarterly payment system is used for this provision. The trustee enters the amount of payments in line 20, and the non- resident grantor or other owner claims such amount paid over by the trustee on his/her return.

Pooled Income Fund/Charitable Remainder Annuity or Unitrust Withholding

A Massachusetts trustee of a pooled income fund (IRC Sec, 642(c)(5)), charitable remainder annuity trust or a charitable re- mainder unitrust (IRC Sec, 664(d)), who makes payment to a Mass- achusetts beneficiary of taxable income is required to deduct and withhold tax on that income at the applicable rates. Form 2-ES, Esti- mated Income Tax Payment Vouchers, and the quarterly payment system is used for this provision. The trustee enters the amount of payments in line 20, and the beneficiary claims such amount paid over by the trustee on his/her return.

Extension of Time to File

To receive an extension of time to file, you must file an Application for Extension of Time to File Fiduciary, Partnership or Corporate Trust Return, Form M-8736, and pay the amount of any applicable tax you expect to owe on or before the due date for filing Form 2G.

Check the box for “Other” in the “Type of return filed” section on Form M-8736, and insert “2G” on the line provided. The filing and approval of this form will extend the due date for six months. No ex- tension will be granted in excess of six months for taxpayers within the United States.

Consolidated 2G Filing

If you are required to file more than one Form 2G, you can file on a “consolidated” basis. Use Form 2 as the cover for the return and complete line 1, Filing Status, in full — making sure to check the “Consolidated Form 2G” box. The signature sec- tion must also be completed and signed. Each Form 2G, or pre- approved substitute, can then be attached to the “consolidated” Form 2 without the requirement of each Form 2G being signed. Should you wish to complete lines 2–32 on the Consolidated Form 2G, as a summary or reconciliation, you may do so. You may also enter the total amount of estimated tax payments in line 46 to reconcile with each Form 2G, line 20. Mail the Consol- idated Form 2G to the same address as for a Form 2G.

Due Date of Return

Form 2G is generally due on or before April 18, 2000. If filing on a fiscal year basis, the return is due on or before the 15th day of the fourth month after the close of the fiscal year.

Mail Form 2G to:

Massachusetts Department of Revenue

PO Box 7017

Boston, MA 02204

Direct fiduciary inquiries, not returns, to:

Massachusetts Department of Revenue

Customer Service Bureau

PO Box 7010

Boston, MA 02204

Telephone: (617) 887-MDOR