Form 540nr - Guidelines For Filing A Group 2001-2002 (Page 3 of 4) in pdf

N Instructions for Completing Group

If the partnership does not qualify as an investment partnership under

R&TC Section 17955(c) or if the partnership does qualify as an

Nonresident Return

investment partnership but the partner/member is disqualified under

Complete the group nonresident return using personal income tax

R&TC Section 17955(b), pertaining to investment activities interrelated

Form 540NR. Follow the instructions for the form with the following

with trade or business within this state, then the normal apportionment

and allocation rules apply in determining the character of the income as

modifications:

business or nonbusiness. Business income should be apportioned

1. Type or print the following information in the top margin of

using the partnership factors. Nonbusiness income from intangibles

Form 540NR, Side 1:

should generally be allocated to each partner’s/member’s state of

GROUP FILING PROGRAM MS A-2

residence.

ATTN IVS (732)

2. If there is a mailing label on the front of the Form 540NR Tax

P Withholding Requirements of Partnership/

Booklet, use the label. If you need to make any changes, cross out

LLC

the incorrect information and clearly print the new information.

Withholding is required if:

If there is no mailing label, follow the example on page 4 for

entering the name and address on the group nonresident return.

• California source income is allocable under IRC Section 704 to a

foreign nonresident partner/member; or

3. Complete and attach Schedule 1067A, Nonresident Group Return

• California source income distributed to a domestic (nonforeign)

Schedule, to Form 540NR.

nonresident partner/member exceeds $1,500 in the calendar year.

4. Complete “Step 1,” “Step 1a,” and “Step 2” as shown in the

The withholding rates are 8.84% for foreign corporate partners/

example on page 4. Skip line 6 through line 19. Enter the cumulative

members, 9.3% for foreign nonresident individual partners/members,

totals for all individuals included in Schedule 1067A, Part I, as

and 7% for all domestic nonresident partners/members. Withholding is

follows:

not required if the partner/member has received authorization waiving

a. Enter the total distributive share of California source income

the withholding from the Franchise Tax Board. However, there is no

from Schedule 1067A, Part I, column (c), line 20;

provision in the tax law to allow a waiver of withholding for a foreign

b. Enter the total California tax from Schedule 1067A, Part I,

nonresident partner/member.

column (e) on line 27;

For additional information concerning California withholding require-

c. Enter the credit name, code number, and total amount of each

ments, please see FTB Pub. 1016, Nonresident Withholding Real Estate

type of credit on line 37 and line 38, if applicable;

Guidelines; FTB Pub. 1017, Nonresident Withholding Partnership

d. Enter the total net tax from Schedule 1067A, Part I, column (g)

Guidelines; FTB Pub. 1023, Nonresident Withholding Independent

on line 46; and

Contractor Rent and Royalty Guidelines; or call the Nonresident

e. Complete the remaining lines of the Form 540NR as appropriate.

Withholding Section’s automated toll-free telephone service at

5. If an amount is due, make the check or money order payable to

(888) 792-4900.

“Franchise Tax Board” for the full amount. Write the business

entity’s FEIN, SOS file number, and “2001 Group 540NR” on the

Q Additional Information

check or money order.

Address correspondence regarding the group nonresident return to:

6. Complete, sign, and attach form FTB 3864 to Form 540NR. The

form FTB 3864 must be signed by an authorized person or attorney-

GROUP FILING PROGRAM MS A-2

in-fact. Signing form FTB 3864 means the business entity and all

ATTN INFORMATION VALIDATION SECTION (732)

the electing individuals agree to the terms and conditions for filing a

FRANCHISE TAX BOARD

group nonresident return.

PO BOX 1468

SACRAMENTO CA 95812-1468

7. Mail the group nonresident return using one of the appropriate

addresses shown in Step 11. Also attach a copy of the form to the

Caution: DO NOT mail Form 540NR or Form 540-ES to this address.

business entity’s return.

Mail Form 540NR and Form 540-ES to the address shown on each

form.

If you lease a private mailbox (PMB) from a private business rather

than from the United States Postal Service, include the box number

The telephone number for information on the group nonresident return

in the field labeled “PMB no.’’ in the address area of form FTB 3864

is: (916) 845-3465.

and the Form 540NR.

Forms by Internet – You can download, view, and print California tax

forms and publications. Go to our Website at:

O Special Information for Partnerships and

Access other state agencies’ websites through the State Agency Index

LLCs Subject to Apportionment

on California’s Website at:

Title 18, Cal. Code Reg. Section 17951-4 applies to the income

Forms by Phone and Mail – See back cover of the Form 540NR Tax

computation of the nonresident partners/members of a partnership/

Booklet or the business entity tax booklet for the phone number and

LLC. The regulation provides that 100% of the nonresident’s distribu-

address to order California tax forms and publications.

tive share of the partnership’s business income plus any guaranteed

payment, is subject to apportionment. Guaranteed payments are

treated as part of a partner’s distributive share of partnership business

income. See R&TC Section 17854.

If the partnership qualifies as an investment partnership under R&TC

Section 17955(c), generally the dividends, interest, gains, and losses

from that partnership will be sourced in the partner’s/member’s state of

residence. For more information, see instructions for Form 565,

Partnership Return of Income, or Form 568, Limited Liability Company

Return of Income.

FTB Pub. 1067

Page 3

(REV 12-2001)

Form 540nr - Guidelines For Filing A Group 2001-2002 Page 3

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