New York Partnership return required for foreign LLC that has NY resident member

A trust is a New York resident if the grantor was domiciled in NY at the time the property was transferred to the trust if the trust was then irrevocable, or if the trust was revocable at the time the property was transferred to it and has not since become irrevocable; or if the grantor was domiciled in NY at the time the trust became irrevocable, if it was revocable to begin with. Also, a trust created by the will of a decedent who was domiciled in NY at the date of death is a resident. N.Y. Tax Law §605(b)(3); NYCRR 20 §105.23.

A resident trust is not subject to NY tax if all of the fiduciaries are outside NY, all of the trust's assets are outside NY, and none of the trust's income is from NY sources. Intangible property of the trust is deemed to be located in NY if any of the trustees are domiciled in NY. N.Y. Tax Law §605(b)(3)(D). However, every resident trust that is required to file a federal income tax return is required to file a NY return even if it has no NY taxable income. N.Y. Tax Law §651(a)(2).

If the Delaware trust is a NY resident trust under NY's rules, it must file a NY return, and the LLC must also file a NY return because it has a NY resident member. The residence of the beneficiary, however, has no bearing on the residence status of the trust. Therefore, it does not appear that the presence of a NY resident beneficiary of the trust creates a NY filing requirement for the LLC in this structure unless the trust itself is a NY resident.

Katie in San Diego

Probably has to file in NY - but NY sourced income could be ZERO

States, such as NY are looking for 3rd parties to report all the income of their residents.

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