Colorado § 39-22-203 - Nonresident partners.

§ 39-22-203. Nonresident partners.

(1) (a) In determining Colorado nonresident federal taxable income of a nonresident partner of any partnership, there shall be included only the portion of such partner's distributive share of items of partnership income, gain, loss, deduction, or credit derived from sources within Colorado determined in accordance with the provisions of section 39-22-109 or, at the partnership's election, apportioned or allocated to this state pursuant to section 39-22-303.5, 39-22-303.6, or 39-22-303.7.

(b) Repealed.

(2) In determining the sources of a nonresident partner's income for the purposes of Colorado income tax, no effect shall be given to a provision in the partnership agreement which:

(a) Characterizes payments to the partner as being for services or for the use of capital; or

(b) Allocates to the partner, as income or gain from sources outside Colorado, a greater portion of his distributive share of partnership income or gain than the ratio of partnership income or gain from sources outside Colorado to partnership income or gain from all sources, except as authorized in subsection (4) of this section; or

(c) Allocates to the partner a greater proportion of a partnership item of loss or deduction connected with sources within Colorado than his proportionate share, for federal income tax purposes, of partnership loss or deduction generally, except as authorized in subsection (4) of this section.

(3) Repealed.

(4) The executive director may authorize the use of such other methods of determining a nonresident partner's portion of partnership items derived from or connected with sources within Colorado, and the modifications related thereto, as may be appropriate and equitable, on such terms and conditions as he may require.

(5) (a) A nonresident partner's distributive share of items shall be determined under section 39-22-202 (1).

(b) The character of partnership items for a nonresident partner shall be determined under section 39-22-202 (2).

(c) The effect of a special provision in a partnership agreement having the principal purpose of avoidance or evasion of tax under this article shall be determined under section 39-22-202 (3).

Source: L. 64: R&RE, p. 767, § 1. C.R.S. 1963: § 138-1-27. L. 83: (1)(b) amended, p. 1513, § 5, effective January 1, 1984. L. 87: (1)(a), IP(2), and (2)(c) amended and (1)(b) and (3) repealed, pp. 1437, 1457, §§ 5, 31, effective June 22. L. 93: (1)(a) amended, p. 1319, § 1, effective June 6. L. 2008: (1)(a) amended, p. 954, § 6, effective January 1, 2009. L. 2019: (1)(a) amended, (SB 19-241), ch. 390, p. 3476, § 51, effective August 2.

ANNOTATION

Law reviews. For article, "Tax and Estate Planning for Nonresident Real Estate Owners", see 53 Colo. Law. 34 (Apr. 2024).