15-30-136. Computation of income of estates or trusts -- exemption. (1) Except as otherwise provided in this chapter, "gross income" of estates or trusts means all income from whatever source derived in the tax year, including but not limited to the following items:
     (a) dividends;
     (b) interest received or accrued, including interest received on obligations of another state or territory or a county, municipality, district, or other political subdivision of the state, but excluding interest income from obligations of:
     (i) the United States government or the state of Montana;
     (ii) a school district; or
     (iii) a county, municipality, district, or other political subdivision of the state;
     (c) income from partnerships and other fiduciaries;
     (d) gross rents and royalties;
     (e) gain from sale or exchange of property, including those gains that are excluded from gross income for federal fiduciary income tax purposes by section 641(c) of the Internal Revenue Code of 1954, as amended;
     (f) gross profit from trade or business; and
     (g) refunds recovered on federal income tax, to the extent that the deduction of the tax resulted in a reduction of Montana income tax liability.
     (2) In computing net income, there are allowed as deductions:
     (a) interest expenses deductible for federal tax purposes according to section 163 of the Internal Revenue Code of 1954, as amended;
     (b) taxes paid or accrued within the tax year, including but not limited to federal income tax, but excluding Montana income tax;
     (c) that fiduciary's portion of depreciation or depletion that is deductible for federal tax purposes according to sections 167, 611, and 642 of the Internal Revenue Code of 1954, as amended;
     (d) charitable contributions that are deductible for federal tax purposes according to section 642(c) of the Internal Revenue Code of 1954, as amended;
     (e) administrative expenses claimed for federal income tax purposes, according to sections 212 and 642(g) of the Internal Revenue Code of 1954, as amended;
     (f) losses from fire, storm, shipwreck, or other casualty or from theft, to the extent not compensated for by insurance or otherwise, that are deductible for federal tax purposes according to section 165 of the Internal Revenue Code of 1954, as amended;
     (g) net operating loss deductions allowed for federal income tax under section 642(d) of the Internal Revenue Code of 1954, as amended, except estates may not claim losses that are deductible on the decedent's final return;
     (h) Montana income tax refunds or tax refund credits.
     (3) The following additional deductions are allowed in deriving taxable income of estates and trusts:
     (a) any amount of income for the tax year currently required to be distributed to beneficiaries for the year;
     (b) any other amounts properly paid or credited or required to be distributed for the tax year.
     (4) The exemption allowed for estates and trusts is that exemption provided in 15-30-112(2)(a) and (6).

     History: En. Secs. 2, 3(1), (2), Ch. 260, L. 1983; amd. Sec. 2, Ch. 464, L. 1985; amd. Sec. 2, Ch. 657, L. 1987; amd. Sec. 1, Ch. 217, L. 1989; amd. Sec. 4, Ch. 807, L. 1991; amd. Sec. 3, Ch. 823, L. 1991; amd. Sec. 7, Ch. 14, Sp. L. July 1992; amd. Sec. 1, Ch. 103, L. 1993; amd. Sec. 8, Ch. 9, Sp. L. May 2000.