The Maine taxable income of a resident estate or trust means is equal to its federal taxable income modified by the addition or subtraction, as the case may be, of its share of the fiduciary adjustment determined under section 5164.

Sec. 43. 36 MRSA §5175, as enacted by P&SL 1969, c. 154, §F1, is amended to read:

§5175. Maine taxable income of a nonresident estate or trust

1. General rules. For purposes of this chapter:

A. Items of income, gain, loss and deduction mean those derived from or connected with sources in this State.;

B. Items of income, gain, loss and deduction entering into the definition of federal distributable net income includes include such items from another estate or trust of which the first estate or trust is a beneficiary.; and

C. The source of items of income, gain, loss or deduction shall must be determined under regulations prescribed by the assessor in accordance with the general rules in section 5142 as if the estate or trust were a nonresident individual.

2. Determination of Maine taxable income. The Maine taxable income of a nonresident estate or trust consists of: is equal to its share of items of income, gain, loss and deduction that enter into the federal definition of distributable net income increased or reduced by the amount of any items of income, gain, loss or deduction that are recognized for federal income tax purposes but excluded from the federal definition of distributable net income of the estate or trust less the amount of the deduction for its federal exemption.

A. Its share of items of income, gain, loss and deduction which enter into the federal definition of distributable net income;

B. Increased or reduced by the amount of any items of income, gain, loss or deduction which are recognized for federal income tax purposes but excluded from the federal definition of distributable net income of the estate or trust;

C. Less the amount of the deduction for its federal exemption.