My client has an irrevocable trust that was formed in CA. The only income in the trust are on investments in a Schwab account, and no distributions to the beneficiary were made, so the trust pays the tax.
The beneficiary is a resident of NY. Does the trust need to file a NY tax return? Does it report the income and pay the tax in the State where it was formed? Or in the State where the beneficiary resides?
When preparing a CA return for the trust, if I indicate that the fiduciary/beneficiary (same person) is a NY resident, then my software automatically reports no income to CA. Is this right?