davetodd11
Level 5
03-15-2024
01:35 PM
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I have a client who has two main sources of revenue.
One is from a government contract, most of the labor for which actually occurs in DC. Overall, the company has net income. For the DC contract, however, there is a net loss.
The D-20 calculates the "DC Apportionment Factor" by dividing the DC portion of gross receipts into the total gross receipts, and then applies that factor to the net income in order to determine "DC Taxable Income".
How can I indicate the DC-related cost of goods sold in order to show a loss for DC on the return?
One is from a government contract, most of the labor for which actually occurs in DC. Overall, the company has net income. For the DC contract, however, there is a net loss.
The D-20 calculates the "DC Apportionment Factor" by dividing the DC portion of gross receipts into the total gross receipts, and then applies that factor to the net income in order to determine "DC Taxable Income".
How can I indicate the DC-related cost of goods sold in order to show a loss for DC on the return?
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sjrcpa
Level 15
03-15-2024
03:33 PM
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You can't. DC and most states use apportionment.
When allocation is allowed:
It's usually for nonbusiness income.
Advance permission is usually required to allocate business income, if it would be allowed at all.
The more I know the more I don’t know.
