Massachusetts Estate Tax Can Now Apply to Out-of-State Trusts

September 04, 2020

Shaffer v. Commissioner of Revenue

A recent case at the Massachusetts Supreme Judicial Court serves as a reminder that the Commonwealth takes an expansive view of its taxing authority in situations involving taxpayers with connections to multiple states. The stakes can be high because the breadth of taxes imposed on residents of Massachusetts is substantially higher than nonresidents.

In most cases, an individual’s residence is easily determined because his or her home, place of employment, and professional, social and religious affiliations are all located in one state. However, in many situations, an individual may have a home in Massachusetts as well as in another state and spend substantial time in both places. And there may be existing social, family, professional and religious affiliations in both states. In these cases, Massachusetts taxing authorities may issue a challenge if the individual or, after death, their estate asserts Massachusetts tax does not apply.

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for important considerations regarding the estate and income tax implications of Massachusetts residency.

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