Nebraska Administrative Code
Topic - REVENUE, DEPARTMENT OF
Title 316 - NEBRASKA DEPARTMENT OF REVENUE
Chapter 24 - CORPORATION INCOME TAX
Section 316-24-251 - PASS-THROUGH ENTITIES; SCHEDULE REQUIRED NEBRASKA SCHEDULE K-1N
Universal Citation: 316 NE Admin Rules and Regs ch 24 ยง 251
Current through March 20, 2024
251.01 Schedule Required. A pass-through entity having income from Nebraska sources or having a resident owner must provide the Department and each owner a schedule listing the amounts and character of the income, guaranteed payments, deductions, adjustments, modifications, and credits that are to be included in each owner's Nebraska income tax return.
251.01A For tax years beginning before
January 1, 2012, and for pass-through entities that are not required to file a
Nebraska return, the schedule must include specific Nebraska information and
adjustments. The Federal Schedule K-1 is acceptable if it has been modified to
reflect the Nebraska information and adjustments.
251.01B For all tax years beginning on or
after January 1, 2012, the pass-through entity required to file a Nebraska
return must use a Nebraska Schedule K-1N (K-1N).
251.01C The K-lN must be included with the
Nebraska Return of Partnership Income, Form 1065N, or the Nebraska S
Corporation Income Tax Return, Form 1120-SN.
251.02 Preparing the K-1N. The K-1N must include the owner's entire share of the pass-through entity's income, deductions, modifications, and credits derived from Nebraska sources. (See Reg-22-003, Income of Nonresident Individual Subject to Nebraska Income Tax.)
251.02A
Character of income, gain, loss, or deduction. Each item of a pass-through
entity's income, gain, loss, or deduction has the same character for the owner
individually, for the purposes of the Nebraska income tax, as it has for
federal income tax purposes. If the item is not characterized for federal
income tax purposes, it has the same character for the owner individually as if
the owner realized it directly from the source from which it was realized by
the pass-through entity.
251.02A(1) In
determining a nonresident owner's income, an agreement which characterizes
payments to the owner as compensation for services or as a return on capital
cannot be considered.
251.02A(2)
Similarly, an agreement which allocates to a nonresident owner a greater share
of the income or gain from sources outside Nebraska than would be the
nonresident owner's share of income from all sources cannot be considered. In
addition any agreement which allocates to a nonresident owner a greater share
of any loss or deduction connected with Nebraska sources than the owner's share
for federal purposes cannot be considered.
251.02A(3) If a pass-through entity has
income from business activities that is taxable both in Nebraska and in another
state, it will determine its Nebraska income by apportioning its entire income
as provided in Reg-24-301 through Reg-24-381. A pass-through entity engaged in
business in Nebraska which is not subject to tax in any other state cannot
apportion its income, but must report its entire taxable income to
Nebraska.
251.02B
Adjustments.
251.02B(1) The adjustments
provided in Reg-24-235. Nebraska Adjustments to Taxable Income, must be
reported as modifications on the K-1N.
251.02B(2) The non-Nebraska sourced income of
an S corporation or LLC must be reported on the K-IN .Business entities
organized as partnerships do not report this adjustment.
251.02C Credits. A pass-through entity must
report each owner's share of credits that are distributed by the pass-through
entity on the K-1N or another appropriate form.
Disclaimer: These regulations may not be the most recent version. Nebraska may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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