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1120S - Income allocation

Level 1

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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3 Replies 3
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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Level 1

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. 

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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.


ex-AllStar