Enterprize Zone Credit - Spidell

Enterprize Zone Credit

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Message Board Enterprize Zone Credit

This topic contains 0 replies, has 0 voices, and was last updated by Jason Stoffmacher 11 months, 2 weeks ago.

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    Jason Stoffmacher

    Taxpayer #1 is an S corporation in an Enterprize Zone.  Taxpayer #1 previously flowed through EZ credits to 50% S corporation Shareholder – taxpayer #2.  Taxpayer #3 is a partnership that owns real estate which is rented to taxpayer #1.  Taxpayer #2 owns 50% of Taxpayer #3.  Question – when figuring the amount of income reported in the current year for purposes of determining how much income is considered EZ income, should the net rental income from taxpayer #3 be included?

    FYI, taxpayer #3 is subject to the recharacterization rules for federal purposes whereby the net rental income is NOT subject to the net investment income tax.