Form Ct-1040 Nr/py - Connecticut Nonresident And Part-Year Resident Income Tax Return And Instructions - 2013 Page 29
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56Income from business activities in Connecticut that are considered
Example 3: In Example 1, assume the plumber allocated, on
casual, isolated, or inconsequential is not part of the Connecticut-
the basis of separate books and records, the income derived
sourced income of a nonresident. See Activities Considered Casual,
from his plumbing business on his Connecticut nonresident
Isolated, or Inconsequential, on Page 8.
return as follows: The income from his plumbing business is
Where a business, trade, profession, or occupation is carried
$134,000, with $91,500 from Connecticut business and $42,500
on: Generally, you are considered to be carrying on a business,
from Massachusetts business. Therefore, on his Massachusetts
trade, profession, or occupation (not including personal services
return, this taxpayer must also allocate $91,500 of this income to
as an employee) at the location:
Connecticut and $42,500 to Massachusetts since Massachusetts
permits allocation on the basis of separate books and records.
1. Where you maintain, operate, or occupy desk space, an offi ce, a
shop, a store, a warehouse, a factory, an agency, or other place
Apportionment Formula: If your books and records do not
where your affairs are regularly carried on (this summary is
satisfactorily disclose the portion of income derived from
not all inclusive); or
or connected with sources within Connecticut, income from
2. Where your business is transacted with a fair measure of
business carried on both in and outside of Connecticut must
permanency and continuity.
be apportioned by using a prescribed formula or an approved
You are considered to be carrying on business outside
alternative method. Schedule CT-1040BA, containing the
Connecticut if you maintain, operate, or occupy outside
formula and other instructions pertaining to the apportionment
Connecticut, an offi ce, a shop, a store, a warehouse, a factory,
of business income, must be completed for this purpose and
an agency, or other place where your business matters are
attached to Schedule CT-SI. If you submit an alternative
systematically and regularly carried on.
method of apportionment, you must also complete Schedule
CT-1040BA and submit all information about your alternative
You are not considered to be carrying on business outside
method of apportionment.
Connecticut and may not allocate or apportion business income
if you have an occasional or isolated business transaction outside
Line 6: Capital Gain or (Loss)
Connecticut or if you have no regular place of business outside
(federal Form 1040, Line 13)
of Connecticut.
• Part-Year Resident
You are not considered to be carrying on business outside
Enter the total of Schedule, CT-1040AW, Line 6, Column B and
Connecticut if your business activities in Connecticut are
Column D.
considered casual, isolated, or inconsequential. See Activities
Considered Casual, Isolated, or Inconsequential, on Page 8.
• Nonresident
Enter that part of your federal adjusted gross income (as modifi ed
Example 1: A plumber, who is a resident of Rhode Island, carries
by adjustments on Form CT-1040NR/PY, Schedule 1) that
on his business from an offi ce in Danielson, Connecticut. He has
represents capital gains (losses) from Connecticut sources in
maintenance contracts with housing authorities in the Worcester,
accordance with federal provisions for determining capital gains
Massachusetts area which require him to regularly perform
(losses). This includes a deduction for any capital loss carryover
his services at various locations in and around Worcester. This
from Connecticut sources as limited by the following highlighted
taxpayer is considered to be carrying on business in Connecticut
information. Use a copy of federal Form 1040, Schedule D, as a
(by reason of his offi ce in this state) and in Massachusetts
worksheet in determining your Connecticut capital gain (loss).
(because his business is conducted there with a fair measure of
Include in your computations only transactions from Connecticut
permanency and continuity).
sources in 2013. If these computations result in a net capital loss
Example 2: Assume the same facts as in Example 1, except that
for Connecticut purposes, the loss is limited to $3,000 ($1,500 if
the taxpayer carries on his business from an offi ce in Auburn,
you are married and fi ling separately) on the Connecticut return.
Massachusetts and has maintenance contracts with housing
Any balance of a 2013 net capital loss (in excess of the amount
authorities in northeast Connecticut. This taxpayer is considered
claimed on the 2013 return) will be treated as a carryover loss to
to be carrying on business in Massachusetts (by reason of his
be claimed on returns for subsequent years.
offi ce there) and in Connecticut (because his business is conducted
Capital Transactions From Connecticut Sources: Include
in this state with a fair measure of permanency and continuity).
transactions resulting in capital gains (losses) derived from real or
tangible personal property located within Connecticut, whether or
If income is determined from separate books and records of
not connected with a trade or business, and capital gains (losses)
the business (allocation of income): If you are carrying on a
from stocks, bonds, and other intangible personal property used
business, trade, profession, or occupation both in and outside of
in or connected with a business, trade, profession, or occupation
Connecticut and you maintain books and records that satisfactorily
carried on in Connecticut. Include your share of any capital gain
disclose the portion of income derived from or connected with
(loss) derived from Connecticut sources of a partnership of which
sources within Connecticut, enter the net profi t (loss) from
you are a partner, an estate or trust of which you are a benefi ciary,
business carried on in Connecticut on Line 5. Complete Schedule
or an S corporation of which you are a shareholder. If any capital
CT-1040BA, Nonresident Business Apportionment, Schedule A.
gains (losses) are from business property (other than real property)
If you report income using this method, your income reported to
of a business carried on both in and outside of Connecticut, apply
other states in which you carry on your business, where the states
the business apportionment method (Schedule CT-1040BA) in
permit allocation on the basis of separate books and records, must
determining the Connecticut capital gain (loss). Gains and losses
result in a consistent allocation of income. Where another state
from the sale or disposition of real property are not subject to
does not permit allocation on the basis of separate books and
apportionment. In all cases, use the federal basis of property in
records, a consistent allocation of income may not be possible.
computing capital gains (losses).
Page 29
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