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2023 Schedule M2NM Instructions
Purpose of Schedule M2NM
File Schedule M2NM with Form M2 if your estate or trust had income or related expenses from non-Minnesota sources. Schedule M2NM must be
completed to include amounts on the following form lines:
• Lines 2 and 7 of Form M2
• Lines 2 and 7 of Form M2X
• Lines 2 and 6 of Form M2SB
Income and Gains from Non-Minnesota Sources
Minnesota fiduciary income tax is based on income from Minnesota sources only. Non-Minnesota income and gains must be subtracted from
federal taxable income.
Intangible income earned by a resident estate or trust is assigned to Minnesota. Intangible income is income from intangible personal property,
such as stocks or bonds.
Non-Minnesota source income and gains include:
• gains from the sale or other disposition of real or tangible property outside Minnesota,
• income or gains from the operation of a farm outside Minnesota,
• profit from a trade or business outside Minnesota,
• income from partnerships, S corporations and other fiduciaries from sources outside Minnesota,
• rents and royalties from land, buildings, machinery or other tangible property outside Minnesota, and
• interest, dividends, income and gains from stocks, bonds and other securities for nonresident estates and trusts, unless the income was gener-
ated by a trade or business (S corporations and partnerships) and was apportioned to Minnesota.
Expenses and Losses from Non-Minnesota Sources
Expenses. Interest and other expenses deducted on your federal return which relate to income or gains from non-Minnesota sources, such as
expenses incurred in connection with a probate proceeding in another state, must be added to your taxable income. [M.S. 290.17, subd. 1(b)].
Only those expenses that relate to the non-Minnesota income are considered to be from non-Minnesota sources.
Direct expenses should be allocated to the income to which it is associated.
Indirect expenses should be allocated to each class of income in the proportion that each class of income bears to the total income. To deter-
mine this proportion, divide line 9 Column C by line 9 Column A. Multiply the result by the indirect expenses to determine the amount from
non-Minnesota sources.
Losses. Non-Minnesota source losses must be added back to the extent the losses are deducted in determining your federal taxable income or
loss.
Non-Minnesota source losses include:
• losses deducted on the sale or other disposition of real or tangible property outside Minnesota,
• casualty losses deducted on property outside Minnesota,
• losses deducted on the operation of a farm outside Minnesota,
• losses from partnerships, S corporations and other fiduciaries from sources outside Minnesota,
• losses deducted on the operation of a trade or business from sources outside Minnesota, and
• losses deducted on the sale or other disposition of stocks, bonds, securities and other intangible property by nonresident estates and trusts.
Column Instructions
The sum of Column B and Column C must equal Column A.
Column A – Total Amount
Include the appropriate amount from your 2023 federal and Minnesota income tax returns. See the line instructions for Column A below.
Column B – Minnesota Portion
Allocate income and expenses to Minnesota according to Minn. Stat. sections 290.17, 290.191, and 290.20. If the estate or trust is a partner,
shareholder, or beneficiary, include the amounts from Schedules KPI, KS, or KF.
Column C – Non-Minnesota Portion
Use the instructions above to determine amounts to be included in Column C.
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