Instructions For Form Ia 1120s - Income Tax Return For S Corporations

Except for estimated and other advance tax

Other interest, net dividends, capital and

payments, and any credit carryforward under

ordinary

gains,

and

royalties

from

Iowa Code section 422.33 arising in a taxable

intangibles must be included in the numerator if

year for which the corporation was a C

the commercial domicile is in Iowa.

corporation, no credits are allowed against the

All investment income that is business

built-in gains or passive investment income tax.

income, including capital gains or losses, must

Pay online on the Department website

be included in the computation of the BAR if the

( ), or make checks payable

investment income is derived from intangible

to Treasurer, State of Iowa.

property that has become an integral part of

Refund Requests

some business activity occurring regularly in or

If a refund is due because estimated payments

outside of Iowa. See Iowa Administrative Code

exceed the tax due, you must request a refund

54.2(3) for clarification.

by separate letter. Send to Iowa Department of

Capital and ordinary gains or losses, or rent

Revenue, PO Box 10456, Des Moines IA 50306-

and royalties from real property must be

0456.

included in the numerator if the property is

Part IV: Business Activity Ratio (BAR)

located in Iowa.

If an S corporation is doing business wholly

For a taxpayer first apportioning income, the

within Iowa, skip lines 1-12 and enter 100.00 on

inclusion of investment income determined to be

line 13.

business income in the BAR of that year’s initial

return will be binding on all subsequent years’

If the S corporation is doing business both

returns. The election to include business

within

and

without

Iowa,

complete

all

investment income in the BAR can later be

applicable lines.

changed only with permission of the Director of

the Iowa Department of Revenue.

Dividends are net of special deductions.

Business income means income which arises

Part V: Information from Prior Period Iowa

from the S corporation’s unitary trade or

Return

business, a part of which is conducted within

Enter the requested information from the Iowa

Iowa. Business income must be apportioned to

return for previous tax period.

Iowa by means of the BAR. Investment income

may at the taxpayer’s election be included in the

Federal S Corporation Return

computation of the BAR. The taxpayer will have

A copy of the federal corporation return, form

elected whether to include investment income in

1120S, and all other supporting schedules, (not

the computation of the BAR for that and all

including the federal Schedule K-1) must be

subsequent years. Consequently, that year and

included with this form.

for subsequent years total investment income

Signature

which is determined to be business income will

The corporation return must be signed by the

be included in the numerator as follows:

president or other duly authorized officer. The

Accounts receivable interest is to be included

return will not be considered valid unless this

in the numerator to the extent allocable to Iowa.

requirement is met.

Instructions for IA 1120S Schedule K-1

Shareholder’s

Income

Individual shareholders: When completing

Deductions, & Modifications

your individual IA 1040, report the column (a)

The Iowa 1120S Schedule K-1 shows each

items.

addition,

individual

nonresident

shareholder’s share of modifications, all-source

shareholders report amounts from column (c) on

income, Iowa apportioned income, and Iowa tax

Iowa form IA 126, “Iowa Nonresident and Part-

credits. You must provide complete information

year Resident Credit.” If the S corporation does

for each shareholder in an acceptable format.

business within and without Iowa, the BAR in

Forms IA 1120S and IA 1120S Schedule K-1 are

column (b) must be provided to each Iowa

provided on our website.

resident shareholder for purposes of computing

42-005c (08/06/14)

Instructions For Form Ia 1120s - Income Tax Return For S Corporations - 2014 Page 3

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