Idaho Administrative Code
Title IDAPA 35 - Tax Commission, State
Rule 35.01.01 - INCOME TAX ADMINISTRATIVE RULES
Section 35.01.01.335 - NONAPPORTIONABLE INCOME
Current through August 31, 2023
Section 63-3027(1)(h), Idaho Code
01. Nonapportionable Income. Nonapportionable income is all income other than apportionable income. All deductions relating to the production of nonapportionable income is to be allocated with the income produced. Any allowable deduction that applies to both apportionable and nonapportionable income of the taxpayer is to be prorated to those classes of income to determine income subject to tax. When used in these rules, the term nonapportionable income includes nonapportionable losses unless the context clearly indicates otherwise. (4-6-23)
02. Offset of Interest Expense Against Nonapportionable Income. Interest on indebtedness incurred or continued to purchase or to carry investment that generates nonapportionable income is offset against the income produced. If the facts do not support such a matching of the interest expense to the nonapportionable income, the portion of the taxpayer's interest expense that is offset against income from nonapportionable investments is to be an amount that bears the same ratio to the aggregate amount allowable to the taxpayer as a deduction for interest for the taxable year as the taxpayer's nonapportionable income mentioned in the preceding sentence bears to the taxpayer's total income for the taxable year. Aggregate amount allowable means the taxpayer's total interest expense deducted in determining taxable income as defined in Section 63-3011B, Idaho Code, plus interest expense disallowed under Sections 265 and 291 of the Internal Revenue Code, plus interest expense from a pass-through entity, plus the interest expense of a corporation that, pursuant to Sections 63-3027 and 63-3027B through 63-3027E, Idaho Code, is included in a combined report with the taxpayer for the taxable year. See Rule 115 of these rules for the calculation of total income. (4-6-23)
03. Allocated to Idaho. Nonapportionable income, net of interest and other related expense offsets, that is attributable to Idaho is allocated to Idaho. (4-6-23)
04. Allocated to Other States. Nonapportionable income, together with interest and other related expense offsets, is allocated to other states if it is not attributable to Idaho. (4-6-23)
