59-10-1405.
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/ut/title-59/chapter-10/59-10-1405A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
59-10-1405. Nonresident pass-through entity taxpayer's share of an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit of a pass-through entity -- In determining source of nonresident pass-through entity taxpayer's income certain provisions of pass-through entity agreement may not be considered -- Rulemaking authority.
(a)Except as provided in Subsection
(3), in determining the taxable income of a nonresident pass-through entity taxpayer, an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit of a pass-through entity shall be made in accordance with this Subsection
(1).
(b)For a nonresident pass-through entity taxpayer of a pass-through entity except for a pass-through entity that is an S corporation, the nonresident pass-through entity taxpayer's share of an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit is:
(i)if the item of income, gain, loss, deduction, or credit is required to be taken into account separately for federal income tax purposes, the nonresident pass-through entity taxpayer's distributive share of the item of income, gain, loss, deduction, or credit:
(A)for federal income tax purposes;
(B)determined under Section 704 et seq., Internal Revenue Code; and
(C)derived from or connected with Utah sources; or
(ii)if the item of income, gain, loss, deduction, or credit is not required to be taken into account separately for federal income tax purposes, determined in accordance with the nonresident pass-through entity taxpayer's distributive share of income, gain, loss, deduction, or credit:
(A)relating to the pass-through entity generally;
(B)for federal income tax purposes;
(C)under Section 704 et seq., Internal Revenue Code; and
(D)derived from or connected with Utah sources.
(c)For a nonresident pass-through entity taxpayer of a pass-through entity that is an S corporation, the nonresident pass-through entity taxpayer's share of an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit is:
(i)if the item of income, gain, loss, deduction, or credit is required to be taken into account separately for federal income tax purposes, the nonresident pass-through entity taxpayer's pro rata share of the item of income, gain, loss, deduction, or credit:
(A)for federal income tax purposes;
(B)determined under Section 1366 et seq., Internal Revenue Code; and
(C)derived from or connected with Utah sources; or
(ii)if the item of income, gain, loss, deduction, or credit is not required to be taken into account separately for federal income tax purposes, determined in accordance with the nonresident pass-through entity taxpayer's pro rata share of the item of income, gain, loss, deduction, or credit:
(A)relating to the pass-through entity generally;
(B)for federal income tax purposes;
(C)under Section 1366 et seq., Internal Revenue Code; and
(D)derived from or connected with Utah sources.
(2)In determining the source of a nonresident pass-through entity taxpayer's income, the following provisions in a pass-through entity agreement may not be considered:
(a)a provision that allocates to the nonresident pass-through entity taxpayer, as income, gain, or credit from a source outside this state, a greater proportion of the nonresident pass-through entity taxpayer's share of income, gain, or credit of the pass-through entity than the ratio of income, gain, or credit of the pass-through entity from sources outside this state to income, gain, or credit of the pass-through entity from all sources; or
(b)a provision that allocates to the nonresident pass-through entity taxpayer a greater proportion of an item of loss or deduction of the pass-through entity derived from or connected with Utah sources than the taxpayer's share of loss or deduction generally:
(i)relating to the pass-through entity; and
(ii)for federal income tax purposes.
(3)The commission may by rule, made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act , authorize the use of a calculation other than the calculation provided in Subsection
(1), for determining a nonresident pass-through entity taxpayer's share of an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit of a pass-through entity derived from or connected with Utah sources if:
(a)the nonresident pass-through entity taxpayer applies to the commission; and
(b)the commission finds that the use of the calculation is appropriate and equitable.
Amended by Chapter 312 , 2009 General Session