How do you exclude income from a K-1 on a NYS tax return, which was already taxed and paid by the state the trust was formed in.
The trust was formed in Massachusetts but the client lives in New York. As mentioned above, the Trust paid the MA state tax, thus should be excluded from NYS. I believe this is correct and if so, how to exclude from income.
I agree sounds weird. However, that is what the client said the accountant who prepared the trust and K-1. Other accountant explicitly said that Massachusetts paid the state tax and should be excluded from the NYS income. It is in box 5 (other portfolio and nonbusiness income).
Still unsure.... 😕