McCulloch v. Franchise Tax Board

This case involves the state income tax consequences of a terminal distribution of the income accumulated by a discretionary trust during the period of the beneficiary’s residence in California. Plaintiff, the beneficiary of the trust and one of the trust’s three trustees, protests California’s assessment of a tax deficiency upon the accumulated income distributed to him. We find that plaintiff’s California residence established sufficient contact of the trust with this state to subject it to California income tax. Since the trust failed to pay this state’s tax upon its annual income,…