Arkansas Administrative Code
Agency 006 - Department of Finance and Administration
Division 05 - Division of Revenues
1998-1 - Comprehensive Corporation Income Tax Regulations
Rule 26-51-802 - PARTNERSHIP RETURNS
Rule 1.26-51-802(b) - Corporations with Partnership Interest
Any taxpayer with an interest in a partnership which has gross income from sources within Arkansas must directly allocate the partnership's Arkansas income to Arkansas, rather than include partnership income and apportionment factors in the taxpayer's apportionment formula.
Example:
|
Partnership Total Income |
$100,000 |
|
Partnership Income Directly Allocated to Arkansas |
$50,000 |
|
Corporation A's Ownership |
10% |
|
Corporation B's Ownership |
90% |
Corporation A: $50,000 x .10 = $5,000
Corporation B: $50,000 x .90 = $45,000
The amount of partnership income directly allocated to Arkansas will be entered on page 1 of the "Other Income" line or on page 2, Schedule A, Part C, "Direct Income Allocated To Arkansas" line of Form AR1100CT.
If the taxpayer's operations are multistate, all partnership income must be deducted on Schedule A, Part A, "Deduct Adjustments" line. The partnership's Arkansas income should then be entered on Schedule A, Part C, "Direct Income Allocated To Arkansas" line of Form AR1100CT.
