Schedule A - Utah Taxable Income For Pass-Through Taxpayers Instructions

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Schedule A – Utah Taxable Income for
Pass-through Taxpayers Instructions
Line 1 – Federal Income (Loss) Reconciliation
• Income from investments made in the ordinary
course of a trade or business of furnishing insurance
Enter the amount of federal income or loss reconcili-
or annuity contracts or reinsuring risks underwritten
ation as shown on federal form 1120S, Schedule K,
by insurance companies.
line 18 (R865-9I-13).
• Income or gain derived in the ordinary course of an
Line 2 – Charitable Contributions
activity of trading or dealing in any property if such
Enter the amount of charitable contributions deducted
activity constitutes a trade or business (unless the
on federal form 1120S, Schedule K, line 12.
dealer held the property for investment at any time
before such income or gain is recognized).
Line 3 – Foreign Taxes
Enter the amount of foreign taxes deducted on federal
• Royalties derived by the taxpayer in the ordinary course
form 1120S, Schedule K, line 14.
of a trade or business of licensing intangible property.
• Amounts included in gross income of a patron of a
Line 4 – Recapture of Section 179 Deduction
cooperative by reason of any payment or allocation
Enter the gain or loss on the sale, exchange or other
to the patron based on patronage occurring with
disposition of property for which a section 179 expense
respect to a trade or business of the patron.
deduction has been passed through to shareholders
and reported on federal Schedule K, line 17, code L.
• Other income identifi ed by the IRS as income
derived by the taxpayer in the ordinary course of a
Line 5 – Total Income (Loss)
trade or business.
Add lines 1 through 4.
Line 7 – Utah Net Nonbusiness Income
Line 6 – Total Portfolio Income
Enter the nonbusiness income net of expenses allocated
Enter the total of all portfolio income included on line 1.
to Utah from TC-20, Schedule H, line 14.
Deductions attributable to portfolio income are reported
Sales of Utah property and rents received on Utah prop-
as “other deductions” on federal Schedule K box 12d
erty, if not part of the trade or business income of the S
and federal Schedule K-1 box 12, using codes I, K or
corporation, are considered Utah nonbusiness income.
L, and should not be subtracted from portfolio income
on this line.
Note: Do not include as nonbusiness income any in-
come reported on line 6 as portfolio income.
This income is attributable to a shareholder’s resident
state.
Line 8 – Non-Utah Net Nonbusiness Income
Interest, dividends, royalties, etc., earned in the ordinary
Enter the nonbusiness income net of expenses allo-
course of the trade or business of the S corporation, are
cated outside Utah from TC-20, Schedule H, line 28.
not portfolio income and should not be included on this line.
Note: Do not include as nonbusiness income any in-
Example: Interest and dividends may be considered
come reported on line 6 as portfolio income.
portfolio income if the pass-through entity had funds that
were not used to further the trade or business and were
Line 9 – Total Nonbusiness Income
invested and generated interest or dividends. Interest
Add lines 6 through 8.
and dividends are not considered portfolio income if
the entity’s primary business activity is investing funds,
Line 10 – Apportionable Income (Loss)
such as with a brokerage fi rm.
Subtract line 9 from line 5.
Sales of Utah property and rents received on Utah
Line 11 – Apportionment Fraction (Decimal)
property, if not part of the trade or business of the S
Enter 1.000000, or the apportionment fraction (decimal)
corporation, are considered Utah non-business income
from TC-20, Schedule J line 9, 13 or 14, if applicable.
and included on line 7.
Line 12 – Utah Apportioned Business Income (Loss)
See the defi nition of Portfolio Income on page 4.
Multiply the apportionable income (loss) on line 10 by
The following are examples of income which would be
the apportionment fraction on line 11.
considered business income and not portfolio income
and should not be included on line 6:
Line 13 – Total Utah Income (Loss) Allocated to
Pass-through Entity Taxpayers
• Interest income on loans and investments made
Add line 7 and line 12.
in the ordinary course of a trade or business of
lending money.
Line 14 – Total Pass-through Withholding Tax
• Interest income on accounts receivable arising from
Enter the total pass-through withholding tax from
the performance of services or sales of property.
Schedule N, column I.
Page 7

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