01.
Income Reportable to Idaho.
The following items must be included in the computation of Idaho taxable income
for an individual: (4-6-23)
a. Pass-through
items that are income from Idaho sources of an owner as determined pursuant to
Rule 263 of these rules.
(4-6-23)
b. Distributable net
income from an estate or trust that is income from Idaho sources.
(4-6-23)
02.
Deductions. Pass-through entities paying the tax under Section
63-3022L, Idaho Code, are not
entitled to claim the following deductions on behalf of an individual. (4-6-23)
a. Capital Loss. As provided in Section
63-3022(i), Idaho
Code, S corporations and partnerships are not allowed to carry over or carry
back any capital loss provided for in Section
1212, Internal Revenue Code.
(4-6-23)
b. Net Operating Loss. As
provided in Section
63-3022(i), Idaho
Code, S corporations and partnerships are not allowed to carry over or carry
back any net operating loss provided for in Section
63-3022(c), Idaho
Code. (4-6-23)
c. Idaho Capital
Gains Deduction. As provided in Section
63-3022H, Idaho Code, the Idaho
capital gains deduction may only be claimed by individual taxpayers on an
individual income tax return. (4-6-23)
d. Informational Items. Amounts provided to
owners of pass-through entities and beneficiaries of trusts and estates on the
federal Schedule K-1 that are informational only may not be used as a deduction
in computing the taxable income reportable under Section
63-3022L, Idaho Code.
Informational items include the domestic production activities information and
net earnings from self-employment. (4-6-23)
e. Items Not Deductible Under the Internal
Revenue Code. A deduction is not allowed for items disallowed under the
Internal Revenue Code. For example, a deduction is not allowed for items
disallowed as a deduction in Sections
162(c) and
262 through
280E, Internal Revenue Code,
unless specifically allowed by Idaho law. Items allowed by Idaho law include
expenses related to tax-exempt income under Section
265, Internal Revenue Code, which
are allowed to be deducted as a result of Section
63-3022M, Idaho Code.
(4-6-23)
f. Items Not Reported as a
Pass-Through Deduction. Amounts not reported from the pass-through entity to
the pass-through owner are not allowed as a deduction under Section
63-3022L, Idaho Code. These
include: (4-6-23)
i. The standard deduction;
(4-6-23)
ii. Personal exemptions;
(4-6-23)
iii. Itemized deductions
that result from activity of the pass-through owner. For example, a deduction
is not allowed for charitable contributions made personally by the pass-through
owner, but is allowed for the passthrough owner's share of charitable
contributions made by the pass-through entity. (4-6-23)
g. Items Reported as a Pass-Through
Deduction. Amounts reported from the pass-through entity to the pass-through
owner in their distributive share are allowed as a deduction under Section
63-3022L, Idaho Code, unless
otherwise disallowed under this rule. These include but are not limited to:
(4-6-23)
i. Section
179, Internal Revenue Code,
deduction; (4-6-23)
ii. Charitable
contributions made by the pass-through entity; (4-6-23)
iii. Investment interest expense;
(4-6-23)
iv. Section
59(e)(2), Internal
Revenue Code, expenditures (qualified research expenditures);
(4-6-23)
v. Amounts paid for
medical insurance; (4-6-23)
vi.
Educational assistance benefits; (4-6-23)
vii. Payments to a pension or IRA.
(4-6-23)
03.
Double Deductions Disallowed. A pass-through owner may not deduct
amounts that previously have been deducted by a pass-through entity paying the
tax on his behalf. If the pass-through owner files an Idaho individual income
tax return reporting federal taxable income that includes amounts previously
deducted by a passthrough entity on his behalf, the pass-through owner must add
back the duplicated deduction amounts in computing his Idaho taxable income on
his individual income tax return. (4-6-23)
