Form Tc-65 Form Tc-65 Tax Return & Instructions Page 12
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27TC-20, Schedule H – Nonbusiness Income Net of
Expenses Instructions
Utah Nonbusiness Income
Complete TC-20, Schedule H to determine nonbusiness
income allocated to Utah and outside Utah. All income
Lines 1a-1e – Utah Nonbusiness Income
that arises from the conduct of the trade or business
operations of a taxpayer is business income.
Complete the information in each column and enter
the gross Utah nonbusiness income from each class
Nonbusiness income means all income other than
of income being specifi cally allocated. Use additional
business income and will be narrowly construed. In-
pages or supporting schedules in the same format, if
tangible income must be properly classifi ed and based
necessary, to provide complete information about ad-
upon factual evidence. The burden of proof is on the
ditional sources of Utah nonbusiness income.
taxpayer to justify the manner in which the income is
claimed on the return.
Line 2 – Total of Columns C and D
Enter the total of the amounts on lines 1a through 1e
Interest income is business income where the intan-
in column C and column D.
gible with respect to which the interest was received
arises out of or was created in the regular course of
Line 3 – Total Utah Nonbusiness Income
the taxpayer’s trade or business operations, or where
Enter the total of the amounts on lines 1a through 1e
the purpose for acquiring and holding the intangible is
in column E.
an integral, functional, or operative component of the
taxpayer’s trade or business operations, or otherwise
Lines 4a-4e – Direct Related Expenses
materially contributes to the production of business
Describe and enter amounts of direct expenses on the
income of the trade or business operations. See Tax
same letter line as the corresponding Utah nonbusiness
Commission Rule R865-6F-8(2)(e)(iii).
income is listed on lines 1a through 1e. Direct related
Dividends are business income where the stock with
expenses include wages, interest, depreciation, etc.
respect to which the dividends were received arose out
(UC §59-7-101).
of or was acquired in the regular course of the taxpayer’s
trade or business operations or where the acquiring
Line 5 – Total Direct Related Expenses
and holding of the stock is an integral, functional, or
Enter the sum of direct related expenses by adding
operative component of the taxpayer’s trade or business
lines 4a through 4e.
operations, or otherwise materially contributes to the
production of business income of the trade or business
Line 6 – Utah Nonbusiness Income Net of Direct
operations. See Rule R865-6F-8(2)(e)(iv).
Related Expenses
Subtract line 5 from line 3.
Gain or loss from the sale, exchange, or other disposi-
tion of real property or of tangible or intangible personal
Line 7 – Beginning-of-Year Assets
property constitutes business income if the property
Enter in column A the total beginning-of-year value of
while owned by the taxpayer was used in, or was oth-
assets used to produce Utah nonbusiness income from
erwise included in the property factor of the taxpayer’s
line 2, column C. Enter in column B the beginning-of-
trade or business. See Rule R865-6F-8(2)(e)(ii).
year value of your total assets. Include all assets in
Rental income from real and tangible property is
column B, including Utah assets.
business income if the property with respect to which
the rental income was received is or was used in the
Line 8 – End-of-Year Assets
taxpayer’s trade or business and therefore is includable
Enter in column A the total end-of-year value of assets
in the property factor. See Rule R865-6F-8(2)(e)(i).
used to produce Utah nonbusiness income from line
2, column D. Enter in column B the end-of-year value
Complete TC-20, Schedule H as follows:
of your total assets. Include all assets in column B,
• Complete lines 1a through 14 if you are claiming
including Utah assets.
only Utah nonbusiness income.
Line 9 – Sum of Beginning and Ending
• Complete lines 15a through 28 if you are claiming
Asset Values
only non-Utah nonbusiness income.
Add lines 7 and 8 for each respective column.
• Complete lines 1a through 28 if you are claiming
both Utah and non-Utah nonbusiness income.
Line 10 – Average Asset Value
Divide line 9 by 2 for each column.
Use additional pages or supporting schedules in the
same format, if necessary, to provide complete informa-
Line 11 – Utah Nonbusiness Asset Ratio
tion, including a description of the business purpose
Divide line 10 column A by line 10 column B. Round the
for making the investment, the transactions creating
result to four decimal places. Do not enter a decimal
the non-business income, and the use of revenues
greater than 1.0000 and do not enter a negative number.
generated by the non-business investment.
Page 10
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