M2NM: Non-Minnesota Source Income and Related Expenses (2024)
Minnesota · Minnesota DOR · Used for tax years 2024
2024 Minnesota Schedule M2NM reports an estate’s or trust’s non-Minnesota source income and related expenses. It separates total amounts into Minnesota and non-Minnesota portions and calculates the adjustment to report on Form M2.
Who files this form
File 2024 Schedule M2NM with Form M2 if your estate or trust had income or related expenses from sources outside Minnesota.
The schedule must also be completed to include amounts on these lines:
- Form M2, lines 2 and 7.
- Form M2X, lines 2 and 7.
- Form M2SB, lines 2 and 6.
What you'll need
Have these returns and details available to complete the schedule:
- Your 2024 federal Form 1041 and Minnesota Form M2, which supply the income, addition, deduction, and subtraction amounts.
- Schedules KPI, KS, or KF, if the estate or trust is a partner, shareholder, or beneficiary.
- The estate or trust's name, federal ID number, and Minnesota ID number.
- Amounts showing the Minnesota and non-Minnesota portions of income and expenses, including the portion retained by the estate or trust rather than distributed to beneficiaries.
How to file
Include Schedule M2NM when you file Form M2.
On Schedule M2NM, subtract line c33 from line c16 and enter the result on line 34:
- If the result is positive, enter it on Form M2, line 7.
- If the result is negative, enter it as a positive number on Form M2, line 2.
The supplied text does not give a mailing address or e-filing instructions.
Common mistakes
- Including amounts distributed to beneficiaries. Include only the portion retained by the estate or trust, to the extent included in federal taxable income.
- Leaving the columns out of balance. Column B, the Minnesota portion, plus Column C, the non-Minnesota portion, must equal Column A, the total amount.
- Not rounding amounts. Round to the nearest whole dollar.
- Carrying a negative line 34 result to Form M2 as a negative number. Enter it as a positive number on Form M2, line 2.
- Omitting the schedule. You must include Schedule M2NM when you file Form M2.
Questions people ask
What counts as non-Minnesota source income?
Examples include gains from real or tangible property outside Minnesota, income from a farm or business outside Minnesota, and rents or royalties from tangible property outside Minnesota. Income from partnerships, S corporations, and other fiduciaries may also come from non-Minnesota sources.
How is income from stocks and bonds treated?
Intangible income earned by a resident estate or trust is assigned to Minnesota. For nonresident estates and trusts, interest, dividends, income, and gains from stocks, bonds, and other securities are non-Minnesota income unless generated by a trade or business, such as an S corporation or partnership, and apportioned to Minnesota.
How do I allocate expenses?
Allocate direct expenses to the income they relate to. For indirect expenses, divide line 9, Column C, by line 9, Column A. Multiply that result by the indirect expenses to determine the non-Minnesota amount. Expenses deducted on the federal return that relate to non-Minnesota income or gains must be added to taxable income.
How are non-Minnesota losses treated?
Non-Minnesota source losses must be added back to the extent they were deducted in determining federal taxable income or loss.