1120S - Income allocation

Forum|Forum|5 years ago
August 21, 2020
2 replies
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I am filing an 1120S, which files in two states, CA & GA. Corp was established in GA, and owns rental property. GA Income consists of Rental income and depreciation.

CA income consist of Commissions earned as an agent. How do I allocate the income for the two different states and how do I allocate the balance sheet.

Thanks.

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qbteachmt

Level 15

I just want to get some clarity on this, please: "CA income consist of Commissions earned as an agent."

The Employee(s) of the corporation are Agents and get paid through payroll. The S Corp is an Agency, then? And also has Rental income? It's unusual for an S Corp to hold real property, and especially as rentals.

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Sam DAuthor

Level 2

of course, the Shareholder is a real estate agent who earned commissions in CA and had it paid under the GA S-corporation.

I agree, I wouldn't have had it set up like that either, but it was established as such prior to moving to CA.

sjrcpa

Level 15

For most states most of the time you have to apportion income, not allocate it.

Apportionment uses income from each state, and sometimes property and payroll.

The more I know the more I don’t know.

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