Idaho Adjustments -- Pass-Through Entities (Rule 128)

01. In General. An adjustment to a partnership, S corporation, estate or trust allowed or required by Idaho statute generally is claimed on the income tax returns of the partners, shareholders, or beneficiaries of the entity. (4-6-23) a. Partnerships. An adjustment passes through to a partner based on that partner’s distributive share of partnership profits. (4-6-23) b. S Corporations. An adjustment passes through to a shareholder based on that shareholder’s pro rata share of income or loss. (4-6-23) c. Estates and Trusts. An adjustment passes through to a beneficiary in the same ratio that income is allocable to that beneficiary. (4-6-23) 02. Limitations. Deductions claimed on a partner’s, shareholder’s, or beneficiary’s tax return may not exceed the limitations imposed by statute or rule. (4-6-23) 03. Different Taxable Year Ends. If a pass-through entity has a taxable year end different from that of a partner, shareholder, or beneficiary, the adjustment is to be claimed in the same taxable year that income or loss from that entity is reported for federal income tax purposes. (4-6-23) IDAHO ADMINISTRATIVE CODE IDAPA 35.01.01 Idaho State Tax Commission Income Tax Administrative Rules Section 130 Page 22 04. Information Provided by a Pass-Through Entity. The pass-through entity will prepare and distribute to each partner, shareholder, or beneficiary a schedule detailing the proportionate share of each adjustment. Copies of these schedules is to be attached to the pass-through entity’s Idaho income tax return or information return for the taxable year that the adjustment is allowed or required. (4-6-23) 05. Pass-Through Entities That Pay Tax. Generally, a pass-through entity is to report the same Idaho adjustments as those allowed to the individual partner, shareholder, or beneficiary for whom the pass-through entity is paying the tax. However, certain deductions that may be allowed to the individual if reporting and paying the tax is not allowed to the pass-through entity. (4-6-23) 129. (RESERVED)