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[#1]

The following diagnostic is generating:

Entries in Client Information (Screen 1) indicate the CA return is a full year resident. However, the ratio of resident trustees to total trustees and the ratio of resident beneficiaries to total beneficiaries are both less than 100%. The non-California source income and deduction apportionment worksheet on 541, page 3 has not been completed. If there is non-California source income in the return, uncheck the "Full Year Resident?" checkbox in Screen 1 to complete the apportionment worksheet.

Solution:

This diagnostic is issued when:

• The California fiduciary return (Form 541) is marked as a full-year resident,
• But not all trustees or beneficiaries are California residents, and
• The apportionment worksheet for non-California source income and deductions has not been completed.

The program expects that if any trustee or beneficiary is not a California resident, and non-California source income exists, the return should not be marked as full-year resident, and the apportionment worksheet must be completed.

Check Beneficiaries resident state. If all Beneficiaries are not residents and the ratio on screen 2.1 are not 100% CA resident then cannot mark the Fiduciary as a full year resident in screen 1.

California Fiduciary Return Steps

1. Go to Screen 1 – Client Information
   • Uncheck the box for “Trust (or Estate) is Full Year Resident?” under State information.
2. Review Trustees and Beneficiaries
   • Confirm the resident status of all trustees and beneficiaries.
   • Ensure their residency codes are entered accurately.
3. Complete the Apportionment Worksheet
   • This is on Form 541, page 3.
   • You’ll need to allocate income and deductions between California and other states using:
   • Property
   • Payroll
   • Sales