Will the Department of Revenue provide a specific section or sections in its return instructions that set forth the rules on how pass-through income from other pass-through entities should be treated for each class of income?

Nov 15, 2019
Q:

The alternative investment area has become more popular over the years. However, the Department’s partnership forms and instructions, e.g., Schedule M, Part B, do not clearly set forth instructions on how pass-through entities should exclude income/loss from other pass-through entities. The lack of clarity creates compliance issues. Would the Department either issue (1) some type of additional guidance in this area, or (2) provide a specific section or sections in its return instructions that set forth the rules on how pass-through income from other pass-through entities should be treated for each class of income?

A:

For business income, if reporting a loss from a pass-through entity, please refer to the PA-20S/PA-65 Information Return Schedule M Part II Section II (h) Other income adjustments that increase PA reportable income. If reporting income from a pass-through entity, refer to Section III (d) Other Income Adjustments that decrease PA reportable income. Pass through income should be reported on the information return Part I Line 1(b) Share of Business of Income (Loss) from All Other Entities. For all other classes of income refer to the instructions for each corresponding schedule.
 
Pennsylvania CPA Journal

Read the latest from the Pennsylvania CPA Journal online or via the mobile app and digital edition.

Read More

CPA Now

Get the latest info on professional trends, management, and leadership skills on CPA Now.

Read More

Premier Sponsors

Platinum Sponsors

Gallagher Bollinger Logo
CPACharge


Silver Sponsors

Paychex logo
Capstan Logo
epsa USA


Bronze Sponsors

sage-logo_bright_green_rgb_2018_28469
TaxConnex_logo_TM_tagline2019
botkeeper1
Fox School of Business, Temple University


Interested in becoming a sponsor? View packages >