Net gains or income derived through estates or trusts.

(a) This class consists of the classes of income enumerated and classified under this subchapter received by an estate or trust directly and paid, credited or otherwise required to be distributed to its beneficiary. Reference should be made to § 105.4 (relating to income of estates, trusts and their beneficiaries). Income derived from an estate or trust shall retain the same character in the hands of the ultimate beneficiary as in the hands of the estate or trust. For example, a resident estate receives net rental income from property in this Commonwealth and distributes that income to its beneficiary, a residuary trust, under the will of the resident decedent, which in turn distributes that income to a nonresident individual beneficiary. The income is from this Commonwealth source and shall be taxable to the nonresident individual beneficiary.

(b) To the extent that income or gain is subject to tax under one of the other classes of income enumerated in this section, such income or gain shall not be subject to tax under one of the other enumerated classes. Cross References This section cited in 61 Pa. Code § 105.4 (relating to income of estates, trusts and their beneficiaries).