How do I enter state apportionment in a 1065 return using worksheet view in CCH® ProSystem fx® Tax and CCH Axcess™ Tax?

  1. Go to Common State > Allocation and Apportionment worksheet.
  2. In section 1 - Property Factor, select Detail.
    • In line 1 - Property Code, select a property factor. 
    • In the Beginning of Year and End of Year columns, enter information for each state as applicable. 
    • Select Summary to return to the previous screen.
  3. In section 2 - Payroll Factor, select Detail
    • In line 1 - Payroll Code, select a payroll factor.
    • In the Amount column, enter information for each state as applicable. 
    • Select Summary to return to the previous screen.
  4. In section 3 - Sales Factor, select Detail.
    • In line 1 - Sales code, select a sales factor.
    • In the Amount column, enter information for each state as applicable. 
    • Select Summary to return to the previous screen.
  5. Calculate the return.

Notes 

  • Each state government form processes income / loss differently from another and may change significantly from year to year.
    • Some state returns begin by pulling from Federal 1065, Schedule K amounts, then apply apportionment.
    • Some state returns begin by pulling from Federal 1065, page 1, and 8825, then apply additions and subtractions.
    • Some state returns begin by pulling from Federal Schedule K-1 amounts, then apply a mix of additions, subtractions, nonbusiness income/loss, non-apportionable income/loss, then apply apportionment percentage against what remains.
    • Some states utilize a mix of the above three methods toward a threshold for whether a return is required, or not.
    • Most states do not treat income/loss received from a lower-tier Passthrough K-1 any differently from other Federal items and state-level input must be made (see Additional Information below).
    • Please review the state government form(s) and their instructions to understand how each state pulls from Federal forms and lines to determine what is apportionable and non-apportionable.
  • The program will default to 100 percent apportionment when no apportionment information is present for a given state.
  • If a state should report zero apportioned income / loss, then it is necessary to select an applicable factor detail code and input a zero for any state with zero apportionment. 
    • At least $1 must be present in the Everywhere column to calculate zero apportionment to a state.
  • The program creates an apportionment percentage for each state using the state allocated amount over the Everywhere amount.
    • This percentage is then multiplied against a federal income amount(s) per a state's form and line instructions to determine the portion attributable values to the indicated state, or it simply appears on the state return and/or state K-1(s) to be utilized at a taxable owner level (i.e.: Individual/Fiduciary/Corporation). 

Additional Information

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