Ark. Code R. 26-51-802 - 1(b) (1997) - Partnership Income From Arkansas Sources

Any taxpayer with an interest in a partnership which has gross income from sources within Arkansas must directly allocate the partnership's Arkansas income to Arkansas, rather than include partnership income and apportionment factors in the taxpayer's apportionment formula.

Example:

Partnership Total Income

$100,000

Partnership Income Directly Allocated to Arkansas

$50,000

Corporation A's Ownership

10%

Corporation B's Ownership

90%

Corporation A: $50,000 x .10 = $5,000

Corporation B: $50,000 x .90 = $45,000

The amount of partnership income directly allocated to Arkansas will be entered on page 1 of the "Other Income" line or on page 2, Schedule A, Part C, "Direct Income Allocated To Arkansas" line of Form AR1100CT.

If the taxpayer's operations are multistate, all partnership income must be deducted on Schedule A, Part A, "Deduct Adjustments" line. The partnership's Arkansas income should then be entered on Schedule A, Part C, "Direct Income Allocated To Arkansas" line of Form AR1100CT.