Instructions For Nj-1065 - Partnership Return And New Jersey Partnership Njk-1 (Page 8 of 17) in pdf

8______________________________________2013 Form 1065 ______________________________________

Director an exception from the use of the New Jersey

Business Allocation Schedule. Such request shall be made in

writing to: C

, I

, B

HIEF

NDIVIDUAL

UDIT

RANCH

USINESS

, PO B

288, TRENTON NJ

LLOCATION

XEMPTION

Note: A partnership is not entitled to a basis adjustment

08695-0288

in the calculating and reporting of partnership gain or loss

Your request for exception from the use of the New Jersey

from the sale or disposition of partnership assets as was

Business Allocation Schedule must set forth the basis of the

extended to individuals, as in the Koch case, on the sale or

request and the substitute method of allocation requested to be

disposition of a partnership interest.

The partnership

used in lieu of the New Jersey Business Allocation Schedule.

must always use federal adjusted basis when determining

The substitute method of allocation may not be utilized prior

gain or loss.

Only taxpayers as defined pursuant to

to the submission of the partnership’s exception request and

N.J.S.A. 54A:1-2.l are entitled to a Koch type adjustment.

the approval of such request by the Director. The

partnership’s exception request, once approved, shall be made

Line 15h - Total Subtractions

every three years, unless the Director or the partnership

Total Lines 15a through 15g, and enter the result on Line 15h.

requests a change sooner.

Line 16a - Subtotal

Note:

A partnership that is not a “qualified investment

Subtract Line 15h from Line 14 and enter the result on Line

partnership”, “investment club”, or that is not listed on a

16a

United States national stock exchange, but has a nonresident

NEW JERSEY ALLOCATED INCOME

noncorporate partner or a nonresident corporate partner must

also complete Schedule J “Corporation Allocation Schedule.”

Line 16b - New Jersey Allocated Adjusted Partnership

Schedule J is not required for a partnership that meets hedge

Income

fund status, if its only nonresident partners are individuals,

Form NJ-NR-A must be completed by every partnership

estates or trusts. Schedule J is to be completed based on the

entity, including those that have met hedge fund status, that is

partnership entity’s information, not the nonresident partner’s

not reporting 100% of its activity to New Jersey or that has

information. The corporation business allocation factor will

not been granted permission to use a substitute method of

be reported on Line 1 of the Partners Directory. Schedule J is

allocation. Failure to file Form NJ-NR-A or to check the box

required if the partnership includes nonresident partners who

that a substitute method of allocation has been granted may

do not have physical nexus to New Jersey and the partnership

result in 100% of your partnership’s income or loss being

wishes to allocate their filing fee.

sourced to New Jersey.

Line 17 – Net Income (Loss) from Rental Real Estate

Enter the business allocation percentage from Line 5, Form

Activities

NJ-NR-A in the box provided on Line 16b. A percentage must

Enter on Line 17, Column A, the amount of net income or loss

be entered unless you have been granted permission to use a

from rental real estate activities that was reported on Line 15a,

substitute method of allocation.

If permission has been

above.

granted, leave the box on Line 16b blank and enter the actual

Enter on Line 17, Column B, the portion of the amount

New Jersey source amount. Enter 100% if all partnership

reported in Column A that was derived from real property

activities are carried on in New Jersey or 0% if all partnership

physically located in New Jersey.

activities are carried on outside New Jersey. Multiply the

amount on Line 16a by this percentage and enter the result on

Line 18 - Net Gain (Loss) from Disposition of Real

Line 16b, Column B.

Property

Where a partnership’s activity is carried on both within and

Enter on Line 18, Column A, the amount of gain or loss from

outside of New Jersey, the portion of the partnership’s

the disposition of real property reported on Line 15b, above.

income, gains, expenses or losses attributable to sources

Enter on Line 18, Column B, the portion of the amount

within New Jersey shall, except as provided below, be

reported in Column A that was derived from the disposition of

determined by use of the New Jersey Business Allocation

real property physically located in New Jersey.

Schedule (Form NJ-NR-A), as prepared by the partnership.

Line 19 – Net Partnership Income (Loss)

Where a partnership’s activity is carried on both within and

Add Lines 16a, 17 and 18, Column A, and enter the sum on

outside of New Jersey and the partnership believes that the

Line 19, Column A.

determination of the portion of the partnership’s income,

gains, expenses or losses attributable to sources within New

Add Lines 16b, 17 and 18, Column B, and enter the sum on

Jersey by use of the New Jersey Business Allocation Schedule

Line 19, Column B.

does not provide an equitable allocation of such items, and the

books and records of the partnership will disclose to the

Director’s satisfaction a more appropriate method of

allocating such items, the partnership may request from the

Instructions For Nj-1065 - Partnership Return And New Jersey Partnership Njk-1 Page 8

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