35 Miss. Admin. Code Pt. III, Subpt. 10, Ch. 01 — Fiduciaries

100 Fiduciary means a guardian, trustee, executor, administrator, receiver, conservator or any
person, whether individual or corporate, acting not for his own benefit, but for the benefit
of another, as to whom he stands in a relation necessitating great confidence and trust, and
a high degree of good faith, or acting in any fiduciary capacity for any person, trust or
estate.
101 Returns by Fiduciaries. All legal fiduciaries must file a fiduciary return unless the gross
income does not exceed the allowable exemption, or unless there is a specific exception in
the regulations. A fiduciary who is the guardian of a minor or incompetent, and where no
legal trust or estate has been established, is an exception and is not required to file a return.
102 Returns by Fiduciaries as Agent . Every fiduciary, or at least one of joint fiduciaries
(except receivers appointed by authority of law, in possession of part only of the property
of the taxpayer) is required to make a return, or returns, of income for the individual
(decedent, minor or incompetent) whose entire income from whatever source derived is in
his charge, if the gross income of such individual exceeds the exemption plus the standard
deduction to which such individual may be entitled.
103 Fiduciary Distinguished from Agent. There may be a fiduciary relationship between an
agent and a principal, but the word "agent" does not denote a fiduciary. A fiduciary
relationship cannot be created by a power of attorney. An agent having entire charge of
property, with authority to effect and execute leases with tenants entirely on his own
responsibility and without consulting his principal, merely turning over the net profits from
the property periodically to his principal by virtue of authority conferred upon him by a
power of attorney, is not a fiduciary within the meaning of the statute. In cases where no
legal trust has been created in the estate controlled by the agent and attorney, the liability to
make a return rests with the principal.
104 Minors. A minor is taxable on his wages, on the income he receives from the property he
owns, and on income from funds held in trust for him. If the gross income of a minor is in
excess of the exemption provided for under the Income Tax Act of 1952, he must file a
return. On his return, the minor is entitled to his own deductions and exemptions, like any
other taxpayer. All expenditures by the parent of the child attributable to amounts which
are includable in the gross income of the child (and not of the parents) shall be treated as
paid or incurred by the child. If a minor's income tax is not paid, an assessment made
against the minor will be treated as if it were made directly against the minor's parent or
guardian.
105 Guardians. A guardian, whether of an infant or other person, is a fiduciary, and as such is
required to make and file the return for his ward and pay the tax. Such a fiduciary is subject
to all the provisions of this law which apply to individuals , including the allowance of
personal exemptions and credits.
106 Decedents. The net income of deceased individuals who, at the time of death, were
residents and who died during the taxable year or subsequent thereto without having made
a return shall be taxed at the rates and in the same manner as living persons. A return for
any year or period for which no return has been filed by the decedent prior to his death
shall be made and filed by the executor or administrator of the estate of such decedent or
the person or persons having charge of the properties of such decedent.
107 Devises, for income tax purposes, must report the income derived from the realty devised
to them for all taxable periods subsequent to the testator's death, except in cases where a
trustee or conservator is duly appointed to take possession of the realty pending the
outcome of a judicial proceeding or action. In such case, the income from the realty would
be properly taxable, pending the contest, to the fiduciary as the income of property held in
trust under the provisions of the act.
108 A bequest is a gift by will of personal property. A devise is a gift of real property by the last
will and testament of the donor. A bequest or devise received by a legatee under the
provisions of a will or by an heir in accordance with the statutes of descent and distribution
is tax exempt, but not the income thereof.
109 The income tax imposed upon individuals shall be applicable to the income of estates or of
any kind of property held in trust as well as the net income received during the taxable year
by deceased individuals who, at the time of death, were residents and who have died during
the taxable year or subsequent thereto without having made a return, and the net income of
resident insolvent or incompetent individuals where the fiduciary has complete charge of
such net income. The rate of tax, the statutory prov isions respecting gross income, and,
with certain exceptions, the deductions, exemptions and credits allowed to individuals
apply also to estates and trusts.
110 The provisions of this regulation relating to estates and trusts, fiduciaries and beneficiaries
contemplate that the corpus of a trust, or the income therefrom is, within the meaning of the
act, no longer to be regarded as that of the grantor. If, by virtue of the nature and purpose of
the trust, the corpus or income therefrom remains attributable to the grantor, these
provisions do not apply.
111 In general, the income of an estate or trust for the taxable year which is currently
distributed to the respective beneficiaries must be returned by and will be taxed to the
beneficiaries, but the income of a trust which is to be accumulated or held for future
distribution, whether consisting of ordinary income or gain from the sale of assets included
in the corpus of the trusts, must be returned by and will be taxed to the fiduciary. However,
regardless of whether or not the income is taxable to the fiduciary or to the distributee, the
fiduciary is responsible for reporting all income, allocation of the tax being affected by
permitting the fiduciary, under certain circumstances, to show as a deduction the amounts
credited or paid to the distributee.
112 Income to Fiduciary. Generally, the gross income of an estate or trust is determined in the
same manner as that of an individual. Gross income of an estate or trust includes all items
of gross income received during the taxable year, including:

# 1.

Income accumulated in trust for the benefit of unborn or unascertained person or
persons with contingent interest, and income accumulated or held for future
distribution under the terms of the will or trust. This income is taxed to the
fiduciary.

# 2.

Income which is distributed currently by the fiduciary to the beneficiaries, and
income collected by the guardian of an infant which is to be distributed as the court
may direct. This income is usually deductible by the fiduciary and is taxed to the
beneficiary. (See deductions for fiduciaries.)

# 3.

Income received by the estate of a deceased person during the period of
administration or settlement of the estate. This income may be taxed to the
fiduciary or to the beneficiary, depending upon the amounts which are properly
paid or credited to the beneficiary. (See deductions for fiduciaries.)

# 4.

Income which, in the discretion of the fiduciary, may be either distributed to the
beneficiaries or accumulated. This income may be taxed to the fiduciary or to the
beneficiary, depending upon the amounts which are properly paid or credited to the
beneficiary. (See deductions for fiduciaries.)
113 Exemptions of Fiduciaries. The personal exemptions allowed to fiduciaries are as follows:
1. Estates. In the case of an estate, a specific exemption of six hundred dollars
($600.00).
2. Trusts. In the case of a trust which, under its governing instrument, is required to
distribute all of its income currently, a specific exemption of three hundred dollars
($300.00). In the case of all other trusts, a specific exemption of one hundred
dollars ($100.00).
114 Deductions for Fiduciaries. A standard deduction of $1700 is allowed to fiduciaries in lieu
of itemized fiduciary expense. In addition to the deductions authorized for individuals, the
following will be allowed:
1. Income which is currently paid or credited to a beneficiary by a fiduciary is
deductible on the fiduciary's return. This deduction will be disallowed if the
beneficiary does not report this income, if so required.
2 a. Reasonable amounts paid or incurred by a fiduciary on account of
administration, including fiduciaries' fees and expenses of litigation, are
deductible, even though the estate or trust might not be engaged in a trade or
business, unless the expenses were for the production or collection of
tax-exempt income or were claimed as a deductible administration expense
or loss on an estate tax return for Mississippi estate tax purposes.
b. Amounts deductible as administration expenses or losses for estate tax
purposes are not deductible by the estate for income tax purposes unless the
estate files a statement (in duplicate) to the effect that the items have not
been allowed as deductions for estate tax purposes and that all rights to
deduct them for such purposes are waived.
3. Estate Tax Deduction. An estate may be entitled to claim the estate tax deduction if
the estate must include in gross income for any tax year an amount of income in
respect to a decedent. The estate tax deduction is computed based on the
Mississippi estate tax attributable to the net value of all the items included in the
estate that represent income in respect of the decedent, less adjustment for
distribution of this income to beneficiaries.
115 Income Taxable to Beneficiaries . Any amount described in this regulation as being
deductible from the gross income of the estate or trust shall be included in computing the
net income of the legatees, heirs or beneficiaries, except in the case of income distributed to
nonresidents of this state from investments in intangibles (dividends, interest etc.) having a
situs in Mississippi in which case such amounts may be excluded. Income from other
sources distributed to nonresidents shall be included in gross income and reflected in the
return filed by such nonresident with this state.
116 (Reserved)
117 (Reserved)