Form Ct-1040 Nr/py - Connecticut Nonresident And Part-Year Resident Income Tax Return And Instructions - 2012 Page 30
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56Income from business activities in Connecticut that are considered
does not permit allocation on the basis of separate books and
casual, isolated, or inconsequential is not part of the Connecticut-
records, a consistent allocation of income may not be possible.
sourced income of a nonresident. See Activities Considered Casual,
Example 3: In Example 1, assume the plumber allocated, on the
Isolated, or Inconsequential, on Page 9.
basis of separate books and records, the income derived from
Where a business, trade, profession, or occupation is carried
his plumbing business on his Connecticut nonresident return as
on: Generally, you are considered to be carrying on a business,
follows: The income from his plumbing business is $134,000,
trade, profession, or occupation (not including personal services
with $91,500 being from Connecticut business and $42,500
as an employee) at the location:
from Massachusetts business. Therefore, on his Massachusetts
1. Where you maintain, operate, or occupy desk space, an offi ce, a
return, this taxpayer must also allocate $91,500 of this income to
shop, a store, a warehouse, a factory, an agency, or other place
Connecticut and $42,500 to Massachusetts since Massachusetts
where your affairs are regularly carried on (this summary is
permits allocation on the basis of separate books and records.
not all inclusive); or
Apportionment Formula: If your books and records do not
2. Where your business is transacted with a fair measure of
satisfactorily disclose the portion of income derived from
permanency and continuity.
or connected with sources within Connecticut, income from
You are considered to be carrying on business outside
business carried on both in and outside of Connecticut must
Connecticut if you maintain, operate, or occupy outside
be apportioned by using a prescribed formula or an approved
Connecticut, an offi ce, a shop, a store, a warehouse, a factory,
alternative method. Schedule CT-1040BA, containing the
an agency, or other place where your business matters are
formula and other instructions pertaining to the apportionment
systematically and regularly carried on.
of business income, must be completed for this purpose and
You are not considered to be carrying on business outside
attached to Schedule CT-SI. If you submit an alternative
Connecticut and may not allocate or apportion business income
method of apportionment, you must also complete Schedule
if you have an occasional or isolated business transaction outside
CT-1040BA and submit all information about your alternative
Connecticut or if you have no regular place of business outside
method of apportionment.
of Connecticut.
Line 6: Capital Gain or (Loss)
You are not considered to be carrying on business outside
(federal Form 1040, Line 13)
Connecticut if your business activities in Connecticut are
considered casual, isolated, or inconsequential. See Activities
• Part-Year Resident
Considered Casual, Isolated, or Inconsequential, on Page 9.
Enter the total of Schedule, CT-1040AW, Line 6, Column B and
Column D.
Example 1: A plumber, who is a resident of Rhode Island, carries
on his business from an offi ce in Danielson, Connecticut. He has
• Nonresident
maintenance contracts with housing authorities in the Worcester,
Enter that part of your federal adjusted gross income (as modifi ed
Massachusetts area which require him to regularly perform
by adjustments on Form CT-1040NR/PY, Schedule 1) that
his services at various locations in and around Worcester. This
represents capital gains (losses) from Connecticut sources in
taxpayer is considered to be carrying on business in Connecticut
accordance with federal provisions for determining capital gains
(by reason of his offi ce in this state) and in Massachusetts
(losses). This includes a deduction for any capital loss carryover
(because his business is conducted there with a fair measure of
from Connecticut sources as limited by the following highlighted
permanency and continuity).
information. Use a copy of federal Form 1040, Schedule D, as a
worksheet in determining your Connecticut capital gain (loss).
Example 2: Assume the same facts as in Example 1, except that
Include in your computations only transactions from Connecticut
the taxpayer carries on his business from an offi ce in Auburn,
sources in 2012. If these computations result in a net capital loss
Massachusetts and has maintenance contracts with housing
for Connecticut purposes, the loss is limited to $3,000 ($1,500 if
authorities in northeast Connecticut. This taxpayer is considered
you are married and fi ling separately) on the Connecticut return.
to be carrying on business in Massachusetts (by reason of
Any balance of a 2012 net capital loss (in excess of the amount
his offi ce there) and in Connecticut (because his business is
claimed on the 2012 return) will be treated as a carryover loss to
conducted in this state with a fair measure of permanency and
be claimed on returns for subsequent years.
continuity).
Capital Transactions From Connecticut Sources: Include
transactions resulting in capital gains (losses) derived from real or
If income is determined from books and records of the business
tangible personal property located within Connecticut, whether or
(allocation of income): If you are carrying on a business, trade,
not connected with a trade or business, and capital gains (losses)
profession, or occupation both in and outside of Connecticut and
from stocks, bonds, and other intangible personal property used
you maintain books and records that satisfactorily disclose the
in or connected with a business, trade, profession, or occupation
portion of income derived from or connected with sources within
carried on in Connecticut. Include your share of any capital gain
Connecticut, enter the net profi t (loss) from business carried on
(loss) derived from Connecticut sources of a partnership of which
in Connecticut on Line 5. Complete Schedule CT-1040BA,
you are a partner, an estate or trust of which you are a benefi ciary,
Nonresident Business Apportionment, Schedule A. You can get
or an S corporation of which you are a shareholder. If any capital
Schedule CT-1040BA on the DRS website at
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
Page 30
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