I have an IL S Corp client (ABC Company) who has operations only in IL. It also is a partner in an Arkansas partnership. 

The Federal Sched K-1 received from the AR partnership has $300,000 of Ord Income and $800,000 of long term capital gain income of which $40K and $101K are apportioned to IL (based on the IL-K-1-P), respectively.

I am preparing the IL S Corp return and wondering if the $1.1MM (Ord Income + LTCG) would be factored into the apportionment formula. The tax form allocates business income based on "sales". Would the term "sales" include the K-1 income? Any help would be greatly appreciated.