The income of a beneficiary from an estate or trust operating a trade or business is excluded because the:

• •

  Estate or trust, not the beneficiary, is engaged in the activity, and;

• •

  Beneficiary is not the operator of the trade or business.

If the deceased was a partner in a business, and a question arises as to whether the administrator or executor of the estate has jurisdiction over the entire trade or business or only a part of it, seek advice from the ARC, Programs.

Even though the administrator is also a beneficiary of the estate, the estate rather than the individual is carrying on the business which belongs to the estate. Until there has been a complete distribution of the assets of the estate, the earnings of the business are not NESE attributable to the administrator-beneficiary.

Assume the NE from the business do not belong to the beneficiary unless;

• •

  There has been partial distribution of the estate which vests the business to them;

  or

• •

  The issue is directly raised.

If so, develop; the facts and make a determination. See RS 01802.034.

If a business is operated by a beneficiary after the death of the owner, the earnings are the NESE of the beneficiary.