Mont. Admin. R. 42.9.303 - GUARANTEED PAYMENTS TO INDIVIDUAL PARTNERS - SOURCING, APPORTIONMENT, AND ALLOCATION
(1) Except as
provided in (2) and (3), guaranteed payments made to individual partners
pursuant to section 707 of the Internal Revenue Code,
26 U.S.C.
707, are sourced to Montana based upon the
Montana apportionment factor of the partnership. For example:
(a) A nonresident taxpayer's federal adjusted
gross income includes three hundred thousand dollars ($300,000) of guaranteed
payments for a designated use of capital received from a partnership that has a
fifty percent (50%) Montana apportionment factor. One hundred and fifty
thousand dollars ($150,000) of the guaranteed payments are included in the
partner's gross income from Montana sources based on the apportionment factor
of the partnership.
(2)
Guaranteed payments made to a retired partner, per
4
U.S.C., section
114(b)(1)(I), are sourced to
the recipient's state of domicile.
(3) Guaranteed payments made to an individual
partner as compensation for services are sourced to Montana if the services
provided by the individual partner are performed in the state. For example:
(a) A nonresident taxpayer's federal adjusted
gross income includes five thousand dollars ($5,000) of guaranteed payments for
services performed outside of Montana received from a partnership that has a
fifty percent (50%) Montana apportionment factor. None of the guaranteed
payments are included in the partner's gross income from Montana sources
because the services were performed outside of Montana.
(b) A nonresident taxpayer's federal adjusted
gross income includes five thousand dollars ($5,000) of guaranteed payments for
services performed in Montana received from a partnership that has a fifty
percent (50%) Montana apportionment factor. All of the guaranteed payments are
included in the partner's gross income from Montana sources because the
services were performed in Montana.
Notes
AUTH: 15-30-2620, MCA; IMP: 15-30-2101, 15-30-2110, 15-30-3302, 15-30-3311, MCA
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