Income/Franchise Tax Massachusetts: Calculating basis of non-corporate shareholders in shares of corporate trusts

Directive 10-2: Basis of Non-Corporate Shareholders in Shares of Corporate Trusts or Successors with Undistributed Earnings Previously Taxed to Corporate Trust, Mass. Dept. of Rev. (5/3/10). A new department directive explains the calculation of a non-corporate shareholder's basis in the shares of an entity that for any tax year was subject to tax in Massachusetts as a corporate trust under the now-repealed state statutes, where the entity has undistributed earnings that were taxed to the corporate trust under those provisions. Note that Massachusetts business entity classification for income tax and corporate excise purposes now generally conforms to the federal "check-the-box" entity classification rules. A result of this recent conformity is that there are no longer special taxation provisions for corporate trusts.