Idaho Admin. Code r. 35.01.01.263

Current through September 2, 2024

Section 35.01.01.263 - IDAHO SOURCE INCOME OF NONRESIDENT AND PART-YEAR RESIDENT INDIVIDUALS - DISTRIBUTIVE SHARE OF S CORPORATION AND PARTNERSHIP INCOME

Section 63-3026A(3), Idaho Code

01.In General. The taxable amount of a shareholder's pro rata share or a partner's distributive share of business income, gains, losses, and other pass-through items from an S corporation or partnership operating both within and without Idaho is determined by multiplying each pass-through item by the Idaho apportionment factor of the business. The Idaho apportionment factor is determined pursuant to Section 63-3027, Idaho Code, and related rules.

02.Nonbusiness Income. Pass-through items of identifiable nonbusiness income, gains, or losses of an S corporation or partnership constitute Idaho source income to the shareholder or partner if allocable to Idaho pursuant to the principles set forth in Section 63-3027, Idaho Code.

03.Pass-Through Items. Whether a pass-through item of income or loss is business or nonbusiness income is determined at the pass-through entity level. Pass-through items of business income or loss may include:

a. Ordinary income or loss from trade or business activities;

b. Net income or loss from rental real estate activities;

c. Net income or loss from other rental activities;

d. Interest income;

e. Dividends;

f. Royalties;

g. Capital gain or loss;

h. Other portfolio income or loss;

i. Gain or loss recognized pursuant to Section 1231, Internal Revenue Code.

04.Guaranteed Payments Treated As Compensation.

a. Guaranteed payments to an individual partner up to the amount shown at https://tax.idaho.gov/guarpay in any calendar year is sourced as compensation for services. If a nonresident partner performs services on behalf of the partnership within and without Idaho, the amount included in Idaho compensation is determined as provided in Rule 270 of these rules.

b. The amounts of guaranteed payments that are sourced as compensation for services are listed at https://tax.idaho.gov/guarpay.

05.Distributions.

a. Partnerships. The amount of distributions received by a partner that is from Idaho sources is determined by multiplying the taxable amount of distributions pursuant to Section 731, Internal Revenue Code, by the Idaho apportionment factor of the partnership.

b. S Corporations. The amount of distributions received by a shareholder that is from Idaho sources is determined by multiplying the taxable amount of distributions pursuant to Section 1368, Internal Revenue Code, by the Idaho apportionment factor of the S corporation.

Idaho Admin. Code r. 35.01.01.263

Effective April 6, 2023