Section 81-03-02.1-08 - Adjustments for sale or lease of revenue-producing enterprise to beginning businessmanAdjustments to determine net taxable income received from the sale or lease of a revenue-producing enterprise and from interest received on a contract are subject to conditions and limitations established in North Dakota Century Code chapter 57-38 and as follows:
1. Net rental income up to twenty-five thousand dollars, interest income, capital gains in the year of the sale, or ordinary income, of a businessman selling or leasing a revenue-producing enterprise is deductible for North Dakota income tax purposes, only in the year that the income is reported on the businessman's federal income tax return. Unused deductions may not be carried back or forward to another year. 2. Deductions for rental income cannot be claimed by the businessman for lease agreements with more than one beginning businessman on the same revenue-producing enterprise. 3. A beginning businessman must be eighteen years of age or older at the time of sale or lease. (See North Dakota Century Code section 14-10-09.) 4. A husband and wife living together who together purchase a revenue-producing enterprise are regarded as one beginning businessman. 5. "Year of sale" for purposes of North Dakota Century Code section 57-38-72 means the year during which the revenue-producing enterprise was sold to the beginning businessman. In the case of a contract, it means the year during which the contract was entered into between the seller and the beginning businessman. N.D. Admin Code 81-03-02.1-08
General Authority: NDCC 57-38-56
Law Implemented: NDCC 57-38-01.2, 57-38-71, 57-38-72, 57-38-73, 57-38-74