AN ACT TO MAKE A TECHNICAL AMENDMENT TO THE REVISED INCOME TAX LAW RELATING TO INDIVIDUALS, TRUSTS, ESTATES AND CERTAIN CORPORATIONS.
Be it enacted by the General Assembly of the State of Delaware:
Section 1. Amend Section 1138, Chapter 11, Title 30, Delaware Code, by deleting subsections (b) (1) and (2) and substituting in lieu thereof the following:
(b) Rules of application. The following rules shall apply in determining whether or to what extent income is set aside for future distribution to nonresident individual beneficiaries:
(1) If all or part of the Federal taxable income of the estate or trust as modified by Section 1106 of this title is distributable in future taxable years (whether or not added in the meantime to estate or trust corpus for estate or trust accounting purposes), to or for the benefit of a named individual beneficiary or beneficiaries, or a class of individual beneficiaries, and if on the last day of the taxable year of the estate or trust one or more of such named individual beneficiary or beneficiaries, or one or more members of the first named class of individual beneficiaries, is living, then the portion of the Federal taxable income of the estate or trust as modified by Section 1106 of this title considered set aside for future distribution to nonresident beneficiaries shall be computed:
(i) in the case of a named individual beneficiary or beneficiaries — by first determining the share or shares of each such beneficiary if the estate or trust terminated on the last day of the taxable year, and then determining the portion of such income realized by the estate or trust during the taxable year while the beneficiary was a nonresident of this State; and
(ii) in the case of the first named class of beneficiaries — by first determining who the members of the class would be and the share of each such member if the estate or trust terminated on the last day of the taxable year, and then determining the portion of such income of each such share realized by the estate or trust while such member was a nonresident of this State.
(2) If all or part of the Federal taxable income of the estate or trust as modified by Section 1106 of this title is distributable in future taxable years (whether or not added in the meantime to estate or trust corpus for estate or trust accounting purposes), to or for the benefit of a named individual beneficiary or a class of individual beneficiaries, and if on the last day of the taxable year of the estate or trust no named individual beneficiary or none of the members of the first named class of individual beneficiaries is then living, then the portion of the Federal taxable income of the estate or trust as modified by Section 1106 of this title considered as set aside for future distribution to nonresident beneficiaries shall be determined in the manner provided in paragraph (1) of this subsection except that it will be presumed:
(i) in the case of a named individual beneficiary or beneficiaries — that each such beneficiary was living and residing in the State where his putative parents resided during the taxable year; and
(ii) in the case of the first named class of beneficiaries —that members of the class were living and residing with the person relationship to whom determines or defines the membership in the class.