C corporation owns a 25% interest in a California based LLC. LLC has foreign source income and California source income. Is the C corporation eligible under Revenue and Taxation Code section 25110 to make a water’s-edge election to report only California source income on it’s California return? The foreign source income is subject to foreign income tax withholding. Historically, LLC CA K-1 included all sales from all sources. Is the LLC required to include foreign sales on California K-1 issued to C corporation member?
Thank you for the reference and response. Can you further address the following:
Can a Limited Liability Company formed and domiciled in California be considered a unitary business and thereby apportion income to its member, a California C corporation on the basis of a single sales apportionment factor and exclude foreign source income?