Georgia Partnership Income Tax Return Instructions For 2001 (Form 700) (Page 3 of 5) in pdf

CORPORATE PARTNERS OF PARTNERSHIPS

A corporation will be considered to be owning property or doing business in Georgia whenever the

corporation is a partner, whether limited or general, in a partnership which owns property or does busi-

ness in Georgia. This treatment of corporate partners is set forth in regulations 560-7-7-.03, 560-7-3-

.08, and 560-7-8-.34 which were amended in 2001. The amended regulations apply to taxable years

beginning on or after January 1, 2002.

LIMITED LIABILITY COMPANY

Each limited liability company and foreign limited liability company shall be classified as a partnership

for Georgia tax purposes unless classified otherwise for Federal income tax purposes, in which case the

limited liability company or foreign limited liability company shall be classified for Georgia tax purposes

in the same manner as it is classified for federal income tax purposes.

NET WORTH TAX

The Partnership Return is an information return only and partnerships are not subject to the net worth

tax.

INSTRUCTIONS FOR PARTNERSHIPS WITH NONRESIDENT PARTNERS

Nonresident partners of partnerships doing business both within and without Georgia shall compute

their proportionate part of the partnership’s allocated and apportioned income from the schedules on

Form 700. The Georgia net income computed on Line 7 of Schedule 1 should be multiplied by the

percentage of ownership to determine the Georgia income of the nonresident. Additionally, the portion

of the Section 179 expense attributable to Georgia, that has not been included in Georgia net income

and that has been allowed on the taxpayer’s federal tax return, can also be subtracted on the partner’s

Georgia return.

A partnership, which owns property or does business within this state, is required by Georgia Code

Section 48-7-129 to withhold on distributions paid or credited to its nonresident partners. The withhold-

ing tax rate is 4%. Withholding is not required if the aggregate annual distributions paid or credited to

each partner are less than $1,000. As an alternative to withholding, the partnership may file a compos-

ite return (Form IT-CR) for its nonresident partners. Nonresident partners may only be included on the

composite return if they have no other Georgia source income. Permission is not required to file the

composite return. A statement in the return indicating that composite filing is being used is sufficient.

For composite return filing information, call (404) 417-2300.

Subsection (c) of Georgia Code Section 48-7-24 provides an exemption from Georgia income taxation

for a nonresident partner who receives income from a partnership which derives income exclusively

from buying, selling, dealing in, and holding securities on its own behalf and not as a broker. Accord-

ingly, withholding under Georgia Code Section 48-7-129 would not apply to distributions paid or credited

in this situation. Please note: This subsection does not apply to a family limited partnership the majority

interest of which is owned by one or more natural or naturalized citizens related to each other within the

fourth degree of reckoning according to the laws of descent and distribution.

Georgia Partnership Income Tax Return Instructions For 2001 (Form 700) Page 3