(1) (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.
(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.
(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
(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.
(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.
(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
(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.
(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.
(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.
(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.
(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.
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