Utah Admin. Code R865-6F-40 - Foreign Operating Company Subtraction from Unadjusted Income Pursuant to Utah Code Ann. Sections 59-7-101 and 59-7-106
(1) The activities of a partnership interest
are taken into account in determining whether a corporation qualifies as a
foreign operating company and calculating any adjustment for which the
corporate partner that is a foreign operating company is eligible.
(a) Partnership activities are attributed to
the corporation to the extent of the corporation's ownership interest in the
partnership.
(b) The character of
each class or type of partnership income passes through to the corporate
partner. Accordingly, a corporate partner that is a foreign operating company
may not make a subtraction from unadjusted income as a foreign operating
company for partnership income generated from intangible property and assets
held for investment and not from a regular business trading activity.
(2) Prior to determining the
foreign operating company subtraction, a foreign operating company that is a
member of a unitary group shall eliminate a transaction between the foreign
operating company and a partnership held directly or indirectly by a member of
the same unitary group to the extent of the interest the foreign operating
company holds in the partnership.
Notes
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