income from sources within the State (exclusive of annuities, interest on bank deposits, interest on bonds, notes or other interest-bearing obligations or dividends from corporations, except to the extent to which the same shall be a part of income of any business, trade, profession or occupation carried on in this State subject to taxation) is taxable. In the case of a resident estate or trust taxed as provided in this article, a personal exemption of $1,000 is allowed against income subject to tax. If the estate or trust is a nonresident, no personal exemption is allowed. ART. 245. Income of estates and trusts taxed to beneficiaries. In the case of estates and trusts falling within subdivisions d, e and f of article 242, the fiduciary is required to make a return on Form 205 as prescribed in article 246. The fiduciary is not required to pay any tax, the income being taxable directly to the beneficiary or beneficiaries. Each beneficiary must include in his return his distributive share whether distributed or not, of the net income of the estate or trust for the taxable year, or, if his net income for such taxable year is computed upon the basis of a period different from that upon the basis of which the net income of the estate or trust is computed, then his distributive share of the net income of the estate or trust for any accounting period of such estate or trust ending within the fiscal or calendar year upon the basis of which such beneficiary's net income is computed. For the purpose of the imposition and collection of taxes under this article the residence of the beneficiary is controlling. A resident beneficiary is taxable on the income of an estate or trust regardless of whether such income is derived from sources within or without the State and without consideration as to whether or not the estate or trust is a resident or nonresident estate or trust. A nonresident beneficiary is taxable only on such part of his income from the estate or trust as arises from sources within the State of New York (exclusive of annuities, interest on bank deposits, interest on bonds, notes or other interest-bearing obligations or dividends from corporations, except to the extent to which the same shall be a part of income from any business, trade, profession or occupation carried on in this State subject to taxation). The regulations governing partnerships are generally applicable to such an estate or trust. ART. 246. Fiduciary returns. 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 of income of the estate or trust for which he acts (either (1) a tax return or (2) an information return) as follows: 1. TAX RETURNS — A. The fiduciary of every resident trust or estate must make a tax return on Form 200 or 201 and pay the tax on the taxable income of each estate or trust taxed as an entity having a net income of $1,000 or over during the taxable year in the case of: (a) Income received by estates of deceased persons during the period of administration or settlement; (b) Income accumulated in trust for the benefit of unborn or unascertained persons or persons with contingent interests; (c) Income held for future distribution under the terms of a will or trust. In (a) the fiduciary is entitled to deduct the amount of income properly paid or credited to any beneficiary. The fiduciary of a resident estate or trust is entitled to the personal exemption of $1,000 in ascertaining the tax liability of the estate or trust. B. The fiduciary of every nonresident estate or trust must make a tax return on Form 200a or 201a and pay the tax on the taxable income of each estate or trust taxed as an entity having taxable income of $1,000 or over during the taxable year from sources within the State of New York, as defined in article 401, in the case of: (a) Income received by estates of deceased persons during the period of administration or settlement; (b) Income accumulated in trust for the benefit of unborn or unascertained persons or persons with contingent interests; (c) Income held for future distribution under the terms of a will or trust. In (a) the fiduciary is entitled to deduct the amount of income properly paid or credited to any beneficiary. In the absence of any specific allocation of income under the will or deed of trust, every distribution shall be deemed to apply ratably to taxable and non-taxable income of the estate or trust. The fiduciary of a nonresident estate or trust is not entitled to any personal exemption whatever on account of the estate or trust. 2. INFORMATION RETURNS The fiduciary of every estate or trust (resident or nonresident) must make an information return on Form 205 if any beneficiary receives or is entitled to a distributive share of taxable income of $1,000 or over during the taxable year in the following cases: (a) Income which is to be distributed to beneficiaries periodically, whether or not at stated intervals; (b) Income collected by the guardian of an infant, to be held or distributed as the court may direct; (c) Income of the estate of any deceased person, which during the period of administration or settlement, is properly paid or credited to any legatee, heir or other beneficiary. In the absence of any specific allocation of income, under the will or deed of trust, every distribution shall be deemed to apply ratably to taxable and non-taxable income of the estate or trust and the beneficiary must be guided by the same allocation. No tax is to be paid by the fiduciaries on these returns as the income is taxable to the beneficiaries, but there shall be included in computing the net income of each beneficiary his distributive share, whether distributed or not, of the net income of the estate or trust for the taxable year. If the estate or trust (a) has a nonresident beneficiary and (b) carries on business (as "business carried on " is defined in article 415) both within and without the State of New York, the fiduciary shall accompany his return with a schedule of apportionment on Form 205a. ART. 247. Tax returns for beneficiaries. Every fiduciary must make a return of income on Form 200 or 201 for every individual whose entire income is in charge of such fiduciary, if such individual is a resident and his net income is $2,000 or over, if living with husband or wife, or $1,000 or over in other cases. If such individual is a nonresident, the fiduciary must make a return of the income of such individual on Form 200a or 201a, regardless of the amount of his taxable income. In such cases, the fiduciary must pay the tax shown by the return to be due. ART. 248. Return by guardian or committee. A fiduciary acting as the guardian of a resident minor having a net income of $1,000 or $2,000, according to the marital status of such person, must make a return for such minor on Form 200 or 201 and pay the tax, unless such minor himself makes a return or causes it to be made. A fiduciary acting as the committee of a resident incompetent person having an income of $1,000 or $2,000, according to the marital status of such person, must make a return for such incompetent on Form 200 or 201 and pay the tax. Such return must be made on Form 200-a or 201-a in the case of a nonresident minor or nonresident incompetent, regardless of the amount of the taxable income. ART. 249. Returns where more than one trust.— In the case of two or more trusts the income of which is taxable to the bene ficiaries, which were created by the same person and are in charge of the same trustee, the trustee may at his option make a single return on Form 205 for all such trusts, notwithstanding that they may arise from different instruments. When, however, a trustee holds trusts created by different persons for the benefit of the same beneficiary he shall make a return on Form 205 for each trust separately. ART. 250. Return by receiver. A receiver who stands in the stead of an individual must render a return of income on Form 200 or 201 and pay the tax for his trust, but a receiver of only part of the property of an individual need not do so. A receiver in charge of the business of a partnership shall render a return on Form 204. A receiver appointed to hold and operate a mortgaged parcel of real estate, to whom rents and profits are paid, but who is not in control of all the property or business of the mortgagor, and a receiver in partition proceedings, are not required to render returns of income. In general statutory receivers and common law receivers of all the property or business of an individual must make returns. (See also Tax Law, section 366, and article 247.) The ART. 251. Computation of income of estates and trusts. net income of an estate or trust shall be computed in the same manner and on the same basis as the net income of an individual, except that there shall also be allowed as a deduction from the gross income any part of it which during the taxable year is, pursuant to the will or trust deed, paid to or permanently set aside for the United States, a State, a Territory or any political subdivision thereof, the District of Columbia, or any corporation or association organized and operated exclusively for religious, charitable, scientific or educational purposes or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private stockholder or individual. The gross income of a revocable trust must be included in the gross income of the grantor. No taxable income is realized from the passage of property to the executor or administrator on the death of the decedent, even though it may have appreciated in value since the decedent acquired it. In the event of delivery of property in kind to a legatee or distributee, no income is realized. Where, however, the executor sells property of the estate for more than its fair market value at the death of the decedent, (or on January 1, 1919, if the decedent's death occurred prior thereto) the excess is taxable income. (See article 252.) ART. 252. Losses and gains from the sales by fiduciaries of property included in the original trust or estate. The profit or loss from the sale or other disposition of property included in the original trust or estate is the difference between the sales price and the fair market value of the property at the time of decedent's death or at the date of the creation of the trust, unless the decedent's death occurred or the trust was created prior to January 1, 1919, in which case the fair market value upon that date is the basis for determining loss or gain. Profit derived from the sale or other disposal of assets of estates or trusts even though considered as a capital asset of the trust or estate, is taxable income, and taxable to the beneficiaries, if paid or credited to them, or to the estate or trust as an entity, if not so paid or credited; likewise, losses from the sale of capital assets are allowable deductions from the gross income of the estate or trust. ART. 253. Decedent's estate during administration. The "period of administration or settlement of the estate" is the period required by the executor or administrator to perform the ordinary duties pertaining to administration, in particular the collection of assets and the payment of debts and legacies. It is the time actually required for this purpose, whether longer or |