Instructions For Connecticut S Corporation Information And Composite Income Tax Return Form Ct-1120si - 1999 Page 15
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30with Connecticut sources must enter (on Line 1 in the
Example 2: The facts are the same as in Example 1,
appropriate column) the amount of each nonresident
except that the S corporation does not maintain books
shareholder's pro rata share of that nonseparately stated
and records that satisfactorily disclose the portion of
its nonseparately stated income that is derived from
income (as modified by the amount reported on Part VI,
or connected with each of its retail stores. Assume
Line 9), or that nonseparately stated loss (as modified
that the S corporation's apportionment fraction as
by the amount reported on Part VI, Line 4), as determined
reported on Part II, Line 8, is 25% (.25). The
from those books and records. The portion of the
S corporation must enter $12,375 (($50,000 ($500,000
S corporation's nonseparately stated income or loss that
x 10%) - $5,500) x .25 = $12,375) on Line 1 as the
is derived from or connected with Connecticut sources
amount of Shareholder #1's pro rata share of the
S corporation's nonseparately stated income that is
(as determined from the S corporation's books and
derived from or connected with Connecticut sources.
records) will be multiplied by the shareholder's pro rata
share (%) of that income or loss.
Lines 2 through Line 8
An S corporation that does not maintain books and
The amounts entered on Lines 2 through 8 should
records that satisfactorily disclose the portion of its
also reflect the amount of the shareholder's pro
nonseparately stated income or loss that is derived from
rata share of Connecticut modifications (as reported
or connected with Connecticut sources must use the
on Part VI, Lines 1 through 3, 5 through 8, and 10)
apportionment fraction computed on Part II, Line 8, or
to the extent the modifications are Connecticut
an authorized alternate method, to determine the portion
sourced.
of any item that is derived from or connected with
Connecticut sources. This is accomplished by multiplying
Line 2 and Line 3 - Enter the Connecticut portion of
the amount of each shareholder's pro rata share of
the amount of the shareholder's pro rata share attributable
nonseparately stated income (as modified by the amount
to rental activities (gain or loss). Amounts attributable
reported on Part VI, Line 9), or in the amount of each
to real property located in Connecticut are 100% taxable
shareholder's pro rata share of nonseparately stated loss
for Connecticut income tax purposes to a nonresident
(as modified by the amount reported on Part VI, Line 4)
shareholder. Amounts attributable to real property located
by the S corporation's apportionment fraction as reported
outside Connecticut are not taxable for Connecticut
on Part II, Line 8, and entering the result on Part V.
income tax purposes to a nonresident shareholder.
Example 1: Assume that an S corporation, whose
Line 4 - Enter the Connecticut portion of the amount of
nonseparately stated income is entirely derived from
the shareholder’s pro rata share of portfolio income
its retail business, maintains books and records that
(loss). Items of income, gain, loss, and deduction derived
satisfactorily disclose the portion of such income that
from or connected with sources within Connecticut do
is derived from or connected with each of its retail
not include such items attributable to intangible personal
stores (including its stores in Connecticut). Assume
property except to the extent such intangible property is
that the S corporation has nonseparately stated income
employed in a business, trade, profession or occupation
of $500,000; Shareholder #1's pro rata share of the
S corporation's nonseparately stated income is 10%;
carried on in Connecticut. For example, dividends from
the amount of Shareholder #1's pro rata share of the
stock used as collateral to secure a business loan (for a
Connecticut modification entered on Part VI, Line 9
Connecticut business) would be income from intangible
is $5,500; and the S corporation's books and records
property employed in a Connecticut trade or business and
disclose that the portion of its nonseparately stated
therefore would be subject to Connecticut income tax.
income that is derived from or connected with
Connecticut sources is $150,000. The S corporation
Enter the Connecticut portion of the amount of the
must enter $9,500 ($15,000 ($150,000 x 10%) - $5,500)
shareholder's pro rata share of capital gain. If the amount
on Line 1 as the amount of Shareholder #1's pro rata
relates to the sale of rental property located in
share of the S corporation's nonseparately stated
Connecticut, the capital gain (loss) is 100% sourced to
income that is derived from or connected with
Connecticut.
Connecticut sources.
Items of capital gain (loss) attributable to intangible
personal property (such as the sale of stock) are not
sourced to Connecticut except to the extent such capital
gain is attributable to an intangible asset employed in a
trade, business, profession or occupation carried on in
Connecticut.
Page 15
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