| (1) |
“Addition, subtraction, or adjustment” means:
Terms Used In Utah Code 59-10-1402- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Business income: means income arising from transactions and activity in the regular course of a pass-through entity's trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitutes integral parts of the pass-through entity's regular trade or business operations. See Utah Code 59-10-1402
- C corporation: means the same as that term is defined in Section 1361, Internal Revenue Code. See Utah Code 59-10-1402
- Commercial domicile: means the principal place from which the trade or business of a business entity is directed or managed. See Utah Code 59-10-1402
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: includes :
| (ii) | a joint stock company; and |
| (iii) | an insurance company. See Utah Code 59-10-103- Dependent: A person dependent for support upon another.
- Dependent beneficiary: means an individual who:
| (a) | is claimed as a dependent under Section 151, Internal Revenue Code, on another person's federal income tax return; and |
| (b) | is a beneficiary of a trust that is a pass-through entity. See Utah Code 59-10-1402- Final pass-through entity taxpayer: means a pass-through entity taxpayer who is a resident or nonresident individual. See Utah Code 59-10-1402
- Individual: means a natural person and includes aliens and minors. See Utah Code 59-10-103
- Intangible property: Property that has no intrinsic value, but is merely the evidence of value such as stock certificates, bonds, and promissory notes.
- Nonbusiness income: means all income of a pass-through entity other than business income. See Utah Code 59-10-1402
- Nonresident business entity: means a business entity that does not have its commercial domicile in this state. See Utah Code 59-10-1402
- nonresident estate: means a trust or estate which is not a resident estate or trust. See Utah Code 59-10-103
- Nonresident individual: means an individual who is not a resident of this state. See Utah Code 59-10-103
- Nonresident pass-through entity taxpayer: means a pass-through entity taxpayer that is a:
| (a) | nonresident individual; or |
| (b) | nonresident business entity. See Utah Code 59-10-1402- Partner: includes a member in a syndicate, group, pool, joint venture, or organization described in Subsection (1)(p)(i). See Utah Code 59-10-103
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Partnership: includes a syndicate, group, pool, joint venture, or other unincorporated organization:
| (A) | through or by means of which any business, financial operation, or venture is carried on; and |
| (B) | that is not, within the meaning of this chapter, a trust, an estate, or a corporation. See Utah Code 59-10-103- Pass-through entity: means a business entity that is:
| (a) | the following if classified as a partnership for federal income tax purposes:| (i) | a general partnership; |
| (ii) | a limited liability company; |
| (iii) | a limited liability partnership; or |
| (iv) | a limited partnership; |
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| (c) | an estate or trust with respect to which the estate's or trust's income, gain, loss, deduction, or credit is divided among and passed through to one or more pass-through entity taxpayers; or |
| (d) | a business entity similar to Subsections (11)(a) through (c):| (i) | with respect to which the business entity's income, gain, loss, deduction, or credit is divided among and passed through to one or more pass-through entity taxpayers; and |
| (ii) | as defined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act. See Utah Code 59-10-1402- Pass-through entity taxpayer: means a resident or nonresident individual, a resident or nonresident business entity, or a resident or nonresident estate or trust:
| (a) | that is:| (i) | for a general partnership, a partner; |
| (ii) | for a limited liability company, a member; |
| (iii) | for a limited liability partnership, a partner; |
| (iv) | for a limited partnership, a partner; |
| (v) | for an S corporation, a shareholder; |
| (vi) | for an estate or trust described in Subsection(11)(c), a beneficiary; or |
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| (b) | to which the income, gain, loss, deduction, or credit of a pass-through entity is passed through. See Utah Code 59-10-1402- Person: means :Utah Code 68-3-12.5
- Property: includes both real and personal property. See Utah Code 68-3-12.5
- Resident individual: means an individual who is domiciled in this state for any period of time during the taxable year, but only for the duration of the period during which the individual is domiciled in this state. See Utah Code 59-10-103
- Resident pass-through entity taxpayer: means a pass-through entity taxpayer that is a:
| (a) | resident individual; or |
| (b) | resident business entity. See Utah Code 59-10-1402- Return: means a return that a pass-through entity taxpayer files:
| (b) | for a pass-through entity taxpayer that is classified as an estate, individual, partnership, S corporation, or a trust for federal income tax purposes, under this chapter. See Utah Code 59-10-1402- S corporation: means the same as that term is defined in Section 1361, Internal Revenue Code. See Utah Code 59-10-1402
- State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
- Taxpayer: means any of the following that has income subject in whole or part to the tax imposed by this chapter:
| (ii) | an estate, a trust, or a beneficiary of an estate or a trust that is not a pass-through entity or a pass-through entity taxpayer; |
| (iii) | a pass-through entity; or |
| (iv) | a pass-through entity taxpayer. See Utah Code 59-10-103- Unadjusted income: means an amount equal to the difference between:
| (i) | the total income required to be reported by a resident or nonresident estate or trust on the resident or nonresident estate's or trust's federal income tax return for estates and trusts for the taxable year; and |
| (ii) | the sum of the following:| (A) | fees paid or incurred to the fiduciary of a resident or nonresident estate or trust:| (I) | for administering the resident or nonresident estate or trust; and |
| (II) | that the resident or nonresident estate or trust deducts as allowed on the resident or nonresident estate's or trust's federal income tax return for estates and trusts for the taxable year; |
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| (B) | the income distribution deduction that a resident or nonresident estate or trust deducts under Section 651 or 661, Internal Revenue Code, as allowed on the resident or nonresident estate's or trust's federal income tax return for estates and trusts for the taxable year; |
| (C) | the amount that a resident or nonresident estate or trust deducts as a deduction for estate tax or generation skipping transfer tax under Section 691(c), Internal Revenue Code, as allowed on the resident or nonresident estate's or trust's federal income tax return for estates and trusts for the taxable year; and |
| (D) | the amount that a resident or nonresident estate or trust deducts as a personal exemption under Section 642(b), Internal Revenue Code, as allowed on the resident or nonresident estate's or trust's federal income tax return for estates and trusts for the taxable year. See Utah Code 59-10-103- United States: includes each state, district, and territory of the United States of America. See Utah Code 68-3-12.5
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| (a) |
for a pass-through entity taxpayer that is classified as a C corporation for federal income tax purposes, under Chapter 7, Corporate Franchise and Income Taxes:
| (i) |
an addition to unadjusted income described in Section 59-7-105; or |
| (ii) |
a subtraction from unadjusted income described in Section 59-7-106; |
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| (b) |
for a pass-through entity taxpayer that is classified as an individual, partnership, or S corporation for federal income tax purposes:
| (i) |
an addition to or subtraction from adjusted gross income described in Section 59-10-114; or |
| (ii) |
an adjustment to adjusted gross income described in Section 59-10-115; or |
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| (c) |
for a pass-through entity taxpayer that is classified as an estate or a trust for federal income tax purposes:
| (i) |
an addition to or subtraction from unadjusted income described in Section 59-10-202; or |
| (ii) |
an adjustment to unadjusted income described in Section 59-10-209.1. |
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| (2) |
“Business income” means income arising from transactions and activity in the regular course of a pass-through entity’s trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitutes integral parts of the pass-through entity’s regular trade or business operations. |
| (3) |
“C corporation” means the same as that term is defined in Section 1361, Internal Revenue Code. |
| (4) |
“Commercial domicile” means the principal place from which the trade or business of a business entity is directed or managed. |
| (5) |
“Dependent beneficiary” means an individual who:
| (a) |
is claimed as a dependent under Section 151, Internal Revenue Code, on another person‘s federal income tax return; and |
| (b) |
is a beneficiary of a trust that is a pass-through entity. |
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| (6) |
“Derived from or connected with Utah sources” means:
| (a) |
if a pass-through entity taxpayer is classified as a C corporation for federal income tax purposes, derived from or connected with Utah sources in accordance with 3; or |
| (b) |
if a pass-through entity or pass-through entity taxpayer is classified as an estate, individual, partnership, S corporation, or a trust for federal income tax purposes, derived from or connected with Utah sources in accordance with Sections 59-10-117 and 59-10-118. |
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| (7) |
| (a) |
“Final pass-through entity taxpayer” means a pass-through entity taxpayer who is a resident or nonresident individual. |
| (b) |
“Final pass-through entity taxpayer” does not include:
| (i) |
a resident or nonresident business entity; or |
| (ii) |
a resident or nonresident estate or trust. |
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| (8) |
“Nonbusiness income” means all income of a pass-through entity other than business income. |
| (9) |
“Nonresident business entity” means a business entity that does not have its commercial domicile in this state. |
| (10) |
“Nonresident pass-through entity taxpayer” means a pass-through entity taxpayer that is a:
| (a) |
nonresident individual; or |
| (b) |
nonresident business entity. |
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| (11) |
“Pass-through entity” means a business entity that is:
| (a) |
the following if classified as a partnership for federal income tax purposes:
| (i) |
a general partnership; |
| (ii) |
a limited liability company; |
| (iii) |
a limited liability partnership; or |
| (iv) |
a limited partnership; |
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| (c) |
an estate or trust with respect to which the estate’s or trust’s income, gain, loss, deduction, or credit is divided among and passed through to one or more pass-through entity taxpayers; or |
| (d) |
a business entity similar to Subsections (11)(a) through (c):
| (i) |
with respect to which the business entity’s income, gain, loss, deduction, or credit is divided among and passed through to one or more pass-through entity taxpayers; and |
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| (12) |
“Pass-through entity taxpayer” means a resident or nonresident individual, a resident or nonresident business entity, or a resident or nonresident estate or trust:
| (a) |
that is:
| (i) |
for a general partnership, a partner; |
| (ii) |
for a limited liability company, a member; |
| (iii) |
for a limited liability partnership, a partner; |
| (iv) |
for a limited partnership, a partner; |
| (v) |
for an S corporation, a shareholder; |
| (vi) |
for an estate or trust described in Subsection(11)(c), a beneficiary; or |
|
| (b) |
to which the income, gain, loss, deduction, or credit of a pass-through entity is passed through. |
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| (13) |
“Resident business entity” means a business entity that is not a nonresident business entity. |
| (14) |
“Resident pass-through entity taxpayer” means a pass-through entity taxpayer that is a:
| (a) |
resident individual; or |
| (b) |
resident business entity. |
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| (15) |
“Return” means a return that a pass-through entity taxpayer files:
| (b) |
for a pass-through entity taxpayer that is classified as an estate, individual, partnership, S corporation, or a trust for federal income tax purposes, under this chapter. |
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| (16) |
“S corporation” means the same as that term is defined in Section 1361, Internal Revenue Code. |
| (17) |
“Share of income, gain, loss, deduction, or credit of a pass-through entity” means:
| (a) |
for a pass-through entity except for a pass-through entity that is an S corporation:
| (i) |
for a resident pass-through entity taxpayer, the resident pass-through entity taxpayer’s distributive share of income, gain, loss, deduction, or credit of the pass-through entity as determined under Section 704 et seq., Internal Revenue Code; and |
| (ii) |
for a nonresident pass-through entity taxpayer, the nonresident pass-through entity taxpayer’s distributive share of income, gain, loss, deduction, or credit of the pass-through entity:
| (A) |
as determined under Section 704 et seq., Internal Revenue Code; and |
| (B) |
derived from or connected with Utah sources; or |
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| (b) |
for an S corporation:
| (i) |
for a resident pass-through entity taxpayer, the resident pass-through entity taxpayer’s pro rata share of income, gain, loss, deduction, or credit of the S corporation, as determined under Sec. 1366 et seq., Internal Revenue Code; or |
| (ii) |
for a nonresident pass-through entity taxpayer, the nonresident pass-through entity taxpayer’s pro rata share of income, gain, loss, deduction, or credit of the S corporation:
| (A) |
as determined under Section 1366 et seq., Internal Revenue Code; and |
| (B) |
derived from or connected with Utah sources. |
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| (18) |
“Statement of dependent beneficiary income” means a statement:
| (a) |
signed by the person who claims a dependent beneficiary as a dependent under Section 151, Internal Revenue Code, on the person’s federal income tax return for the taxable year; |
| (b) |
attesting that the dependent is a dependent beneficiary; and |
| (c) |
indicating that the person expects that the dependent beneficiary’s adjusted gross income for the taxable year will not exceed the basic standard deduction for the dependent beneficiary, as calculated under Section 63, Internal Revenue Code, for that taxable year. |
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| (19) |
“Voluntary taxable income” means the sum of a pass-through entity’s income that is:
| (a) |
attributed to a final pass-through entity taxpayer who is a resident individual unless the income is taxed by another state of the United States, the District of Columbia, or possession of the United States; and |
| (b) |
| (i) |
business income and nonbusiness income that is derived from or connected with Utah sources; and |
| (ii) |
attributed to a final pass-through entity taxpayer who is a nonresident individual. |
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Amended by Chapter 470, 2023 General Session
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