Share of a resident estate, trust, or beneficiary in Colorado fiduciary adjustments

(1) (a) An adjustment shall be made in determining the federal taxable income subject to tax by Colorado of a resident estate or trust under section 39-22-401, or the federal taxable income subject to tax by Colorado of a resident beneficiary of any estate or trust under section 39-22-104, in the amount of the share of each in the Colorado fiduciary adjustment as determined in this section.

(b) Repealed.

(2) The Colorado fiduciary adjustment shall be the net amount of the modifications described in section 39-22-104, except to the extent such items are excluded from federal distributable net income of the estate or trust.

(3) (a) The respective shares of an estate or trust and its beneficiaries, including, solely for the purpose of this allocation, nonresident beneficiaries, in the Colorado fiduciary adjustment shall be in proportion to their respective shares of federal distributable net income of the estate or trust.

(b) If the estate or trust has no federal distributable net income for the taxable year, the share of each beneficiary in the Colorado fiduciary adjustment shall be in proportion to his share of the estate or trust income for such year, under local law or the governing instrument, which is required to be distributed currently and any other amounts of such income distributed in such year. Any balance of the Colorado fiduciary adjustment shall be allocated to the estate or trust.

(4) The executive director may, by regulation, establish such other method of determining to whom the items comprising the fiduciary adjustment shall be attributed, as may be appropriate and equitable. Such method may be used by the fiduciary in his discretion whenever the allocation of the fiduciary adjustment, pursuant to subsection (3) of this section, would result in an inequity which is substantial both in amount and in relation to the amount of the fiduciary adjustment.