Section 316-24-221 - INCOME OF A BUSINESS ENTITY SUBJECT TO NEBRASKA TAX221.01Pass-through Entities. A pass-through entity is not subject to the Nebraska income tax-Each owner of a pass-through entity doing business in Nebraska is subject to Nebraska income tax on his or her portion of the income, expense, loss, or other item of the pass-through entity as shown on the federal return of the pass-through entity; as adjusted and limited under Reg-24-235 through Reg-24-259; and, if appropriate, as apportioned under Reg-24-301 through Reg-24-381. 221.01A An owner of a pass-through entity doing business in Nebraska who is a Nebraska resident as defined in Reg-22-001, must report the owner's proportionate share of all of the income, expense, loss, or other item of the pass-through entity.221.01B An owner of a pass-through entity doing business in Nebraska who is not a Nebraska resident, as defined in Reg-22-001, must report the owner's proportionate share of the Nebraska-source income, expense, loss, or other item of the pass-through entity. See Reg-22-004.06.221.02Character of Income, Gain, Loss, or Deductions to Owners. Each item of pass-through entity income, gain, loss, or deduction will retain the same character for the owner individually, for the purposes of the Nebraska income tax, as it has for the federal income tax-Each owner's proportionate share of the pass-through entity's income and deductions, as apportioned, if appropriate, will retain the same character and classification as allowed for federal income tax purposes. Unless characterized otherwise by federal law, all items have the same character for the owner individually as if the owner realized them directly from the source from which they were realized by the pass-through entity.221.03Corporate Taxpayers. A corporate taxpayer having nexus in Nebraska is subject to the Nebraska corporation income tax on its federal taxable income, as adjusted and limited under 235 through 245, and, if appropriate, as apportioned under 301 through 381. 221.03A Cooperative Organizations. The cooperative taxable income base for Nebraska purposes is the federal taxable income as adjusted and limited under Reg-24-235 through Reg-24-245, and, if appropriate, as apportioned under Reg-24-301 through Reg-24-381.221.03B Exempt Organizations. An organization that is exempt from federal income tax, but is required to report unrelated business income, must report its unrelated business income as adjusted and limited under Reg-24-235 through Reg-24-245, and, if appropriate, as apportioned under Reg-24-301 through Reg-24-381.316 Neb. Admin. Code, ch. 24, § 221
Adopted effective 7/5/2020