Delaware Code Title 30 Sec. 1623 – Special rules for nonresident individual members and corporate …
(a) Nonresident individual members of pass-through entities. — In determining the tax liability under Chapter 11 of this title of a nonresident individual member of a pass-through entity, there shall be included in such member’s modified Delaware source income such member’s distributive share of the items of income, gain, loss and deduction of such pass-through entity entering into such member’s federal adjusted gross income, as modified by § 1106 of this title, as is derived from sources within this State as determined by the application of § 1124 of this title to such member in the same manner as if such items had been realized directly by such member.
Terms Used In Delaware Code Title 30 Sec. 1623
- 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.
- Distributive share: means , with respect to any member and with respect to any taxable year of such member:
In the case of a pass-through entity that is classified as a partnership under the Internal Revenue Code, the distributive share of such member for such taxable year of the pass-through entity's income, gain, loss or deduction, or items thereof, as appropriate, determined under § 704 of the Internal Revenue Code [26 U. See Delaware Code Title 30 Sec. 1601
- member: means a person treated for federal income tax purposes as either a partner in a partnership or a shareholder of an S corporation, but does not include a beneficiary of an estate or trust. See Delaware Code Title 30 Sec. 1601
- Pass-through entity: means any person:
- Personal property: All property that is not real property.
- State: means a state of the United States, the District of Columbia, Puerto Rico, The United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. See Delaware Code Title 30 Sec. 502
- Tax: shall be deemed also to refer to license fees imposed under Part III of this title. See Delaware Code Title 30 Sec. 502
- Taxable: means any person, fiduciary, association of persons, syndicate, joint venture or copartnership subject to making return or to payment of tax imposed by this title. See Delaware Code Title 30 Sec. 101
(b) Nonresident individual members’ modifications. — Any modification described in subsection § 1106(a), (b) or (c) of this title which relates to an item of pass-through entity income, gain, loss or deduction shall be made in accordance with a nonresident individual member’s distributive share, for federal income tax purposes, of the item to which the modification relates, but limited to that portion of such item as is derived from or connected with sources in this State.
(c) Corporate members of pass-through entities. — A corporation that is a member of a pass-through entity doing business or having real or tangible personal property in this State shall be subject to the provisions of Chapter 19 of this title; provided, however, that this subsection shall not be interpreted as precluding a corporation that is a member of a pass-through entity from qualifying for exemption from taxation under Chapter 19 pursuant to § 1902(b)(8) of this title.
(d) Allocation and apportionment of income. — In determining the tax liability under Chapter 19 of this title of a corporation that is a member of a pass-through entity doing business or having real or tangible personal property in this State:
Such corporation’s federal taxable income shall be increased or decreased, as the case may be, by its distributive share of such pass-through entity’s items, if any, described in § 1903(a) of this title;
Such corporation’s distributive share of any item of such pass-through entity that is described in any of § 1903(b)(1) through (5) of this title shall be included in the entire net income of such corporation only if such item is properly allocable to this State under such § 1903(b) of this title; and
In applying § 1903(b)(6) of this title to such corporation,
(1) The entire business of such corporation shall not be treated as having been transacted or conducted within this State if any part of the business of such pass-through entity was transacted or conducted outside this State, and
(2) The 3 ratios described in such § 1903(b)(6) of this title of such corporation shall be determined by including in each such ratio such corporation’s distributive share of each relevant item of such pass-through entity.
In applying § 1903(b)(7) of this title to such corporation, the ratio described in such § 1903(b)(7) of this title of such corporation shall be determined by including in such ratio the corporation’s distributive share of each relevant item of such pass-through entity.