June 12, 1980
You request information on the method of reporting Massachusetts Schedule E, Part III income (partnership, grantor-type trusts, and non-Massachusetts estates and trusts) for a client who was a Massachusetts resident for a portion of the taxable year.
All income, regardless of its source, received while your client was a resident of Massachusetts is taxable by the Commonwealth, as is all income from Massachusetts sources while your client was a non-resident. (Massachusetts General Laws Chapter 62, Sections 2 and 5A, respectively). The taxpayer is required to file both a resident Form 1 for the period of his residency within the Commonwealth, and a non-resident Form 1-NR for the period of his non-residency if, during that period, he received income from Massachusetts sources.
Your resident Form 1 Schedule E, Part III should show that portion of Schedule E income allocable to the period your client was a Massachusetts resident. To prorate the income accordingly, enter partnership income which is not taxable in Massachusetts in line 4 and write "apportioned" on Form 1, line 13. Do the same for estate and trust income by entering that portion not taxable in Massachusetts on Line 11 and writing "apportioned" on Form 1, line 13. When completing Form 1-NR, use lines 4 and 11 of Schedule E to deduct all income not taxable to your client as a non-resident. Please attach a supporting statement showing how Schedule E, Part III income has been apportioned.
Very truly yours,
/s/L. Joyce Hampers
L. Joyce Hampers
Commissioner of Revenue