reglab/statecodes huggingface dataset:
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-18-404 - TAXPAYER RELIEF › 1.26-18-404 - Protesting Proposed Assessments

Current through Register Vol. 49, No. 6, June, 2024
A taxpayer may file a protest based upon a Notice of Tax
					 Adjustment and need not wait until a Notice of Proposed Assessment is
					 received.
Taxpayers must protest a Notice of Proposed Assessment in
					 writing, within thirty (30) days of service of the notice. The protest must
					 include the taxpayer's grounds for protesting the assessment. The grounds
					 should be explained as thoroughly as possible to enable the Department to
					 better understand the taxpayer's position. If the thirtieth (30th) day falls on
					 a Saturday, Sunday or legal holiday, the next succeeding day which is not a
					 Saturday, Sunday or legal holiday is considered to be the thirtieth (30th) day
					 for purposes of meeting the prescribed time period in which to file the
					 protest.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-18-505 - EXTENSION OF TIME FOR FILING RETURNS › 1.26-18-505(a)(3)(A) - First Ninety Day State Extension

Current through Register Vol. 49, No. 6, June, 2024
Taxpayers may request a ninety (90) day 'state" extension
					 for filing the Arkansas corporation income tax return from the Corporate Income
					 Tax Section. This request shall be made in writing and on or before the
					 original due date of the return or, if applicable, the due date for the federal
					 return as extended by the IRS's six month automatic extension. Upon receipt by
					 the Department, the extension request will be approved or disapproved and a
					 confirmation will be sent back to the taxpayer. If approved, the confirmation
					 must be attached to the return when filed. An approved extension only extends
					 the filing due date and does not extend the due date for payment of any income
					 tax due. If any tax due is reflected on the filed return but was not paid on or
					 before the original due date, interest at the rate of 10% per annum will be
					 assessed from the original due date until the tax is paid. Likewise, a failure
					 to pay penalty under ACA
					 26-18-208(2)(A)
					 will apply to any tax not paid on or before the extended due date. Refer to 1.
					 26-51-807
					 and 2.
					 26-51-807
					 for important related information on "federal" extensions of time. Any federal
					 extensions that have been taken should be applied first; Arkansas (that is,
					 state) extensions should be applied after any federally granted
					 extensions.
Example (without a federal extension):
Calendar year ending 12/31/93, therefore Arkansas return's
					 original due date is 05/15/94. Arkansas extension request must be filed on or
					 before 05/15/94 on Arkansas Form AR1055, stating the reason for the request. If
					 a 90 day extension is granted, the Arkansas return must be filed on or before
					 08/15/94.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-18-505 - EXTENSION OF TIME FOR FILING RETURNS › 1.26-18-505(a)(3)(B) - Second Ninety Day State Extension

Current through Register Vol. 49, No. 6, June, 2024
The director may issue a second ninety (90) day 'state"
					 extension for extraordinary circumstances. This additional extension will run
					 consecutively with the first extension. This request shall be made on or before
					 the expiration of the first ninety (90) day extended due date. Refer to 1.
					 26-51-807
					 and 2.
					 26-51-807
					 for important related information on "federal" extensions of time. Any federal
					 extensions that have been taken should be applied first; Arkansas (that is,
					 state) extensions should be applied after any federally granted
					 extensions.
Example (without a federal extension):
Calendar year ending 12/31/93 with an approved Arkansas
					 ninety (90) day extension. If the taxpayer requested an additional extension of
					 60 days, the request must be filed on or before 08/15/94 (the Arkansas income
					 tax return's original due date of 05/15/94, plus the first 90 day extension).
					 If the additional 60 day extension is approved, the Arkansas return must be
					 filed on or before 10/15/94 (first Arkansas extended due date of 08/15/94, plus
					 the additional 60 day extension).
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-18-507 - REFUNDS OF OVERPAYMENTS › 1.26-18-507(a) - Refund Claims

Current through Register Vol. 49, No. 6, June, 2024
A verified claim for a refund of an overpayment of income
					 tax must be filed on a corporation income tax amended return, Form AR1100CTX.
					 In lieu of filing an amended return, a verified claim for a refund of an
					 overpayment of income tax may be filed on the taxpayer's letterhead, provided
					 the following information is contained in the verified claim:
1. The federal employer identification number
				  (FEIN) of the taxpayer;
2. The name
				  of the taxpayer;
3. The address of
				  the taxpayer (street or P. O. box, city, state and zip code);
4. The tax year end (month, day and year) of
				  the original return for which the verified claim is filed;
5. A schedule detailing the original
				  reported, net change and corrected amounts for the following figures:
a. total income,
b. total deductions,
c. net operating loss,
d. taxable income,
e. tax,
f. estimated tax paid,
g. business and incentive tax
				  credits,
h. tax paid with original
				  return,
i. amount of
				  overpayment;
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-102 - CORPORATION INCOME TAX DEFINITIONS › Rule 1.26-51-102(5) - Characteristics of Corporations

Current through Register Vol. 49, No. 6, June, 2024
The term "corporation" refers to an organization whose
					 characteristics require it to be classified for purposes of taxation as a
					 corporation rather than as another type of organization such as a partnership
					 or a trust. There are a number of characteristics ordinarily found in a
					 corporation which, when taken together, distinguish it from other
					 organizations. These are:
(i)
				  associates,
(ii) an objective to
				  carry on business and divide the gains therefrom,
(iii) continuity of life,
(iv) centralization of management,
(v) liability for corporate debts limited to
				  corporate property, and
(vi) free
				  transferability of interests. Whether a particular organization is to be
				  classified as a corporation must be determined by taking into account the
				  presence or absence of each of these corporate characteristics. Other factors
				  may be found in some cases which may be significant in classifying an
				  organization as a corporation, a partnership, or a trust. An organization will
				  be treated as a corporation if the corporate characteristics are such that the
				  organization more nearly resembles a corporation than a partnership or
				  trust.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-102 - CORPORATION INCOME TAX DEFINITIONS › Rule 1.26-51-102(7) - Foreign Corporation

Current through Register Vol. 49, No. 6, June, 2024
A foreign corporation or association or partnership is one
					 organized under the laws of any other state or country, whether or not its
					 principal place of business is located within the State of
					 Arkansas.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-102 - CORPORATION INCOME TAX DEFINITIONS › 1.26-51-102(8) - Fiduciary

Current through Register Vol. 49, No. 6, June, 2024
A fiduciary is an individual or corporate guardian,
					 trustee, executor, administrator, receiver or conservator acting in any
					 fiduciary capacity for any person, trust, estate or business entity. A
					 fiduciary relationship is considered one of trust and confidence. A fiduciary
					 has a legal responsibility to act in the beneficiary's best
					 interest.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-102 - CORPORATION INCOME TAX DEFINITIONS › Rule 1.26-51-102(17)(A) - Tax Year

Current through Register Vol. 49, No. 6, June, 2024
Tax year means the calendar year or fiscal year upon which
					 taxable income is computed. A calendar year means a period of 12 months ending
					 on December 31. A fiscal year means a period of 12 months ending on the last
					 day of any month other than December. A tax return for the period 01/01/93
					 through 12/31/93 is a calendar year return and is referred to as the 1993 tax
					 year. Any correspondence or assessments from the Department concerning this tax
					 year will be designated as the tax year ending 12/93 or as tax year
					 1993.
A tax return for the period 02/01/92 through 01/31/93 is a
					 fiscal year return and is also considered a 1993 tax year return. Any
					 correspondence or assessments from the Department will be designated as the tax
					 year ending 01/93, or as tax year 1993.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-102 - CORPORATION INCOME TAX DEFINITIONS › Rule 1.26-51-102(17)(B) - Tax Year

Current through Register Vol. 49, No. 6, June, 2024
A fractional part of a year (short tax year) means a period
					 of less than twelve (12) months. If a short tax year ends on or before the 15th
					 day of the month, then the short tax year shall be deemed to have ended on the
					 last day of the previous month. If a short tax year ends on or after the 16th
					 of the month, then the short tax year shall be deemed to have ended on the last
					 day of the current month.
Note: A taxpayer must calculate its Arkansas income tax
					 liability using the same tax year for Arkansas income tax purposes as used for
					 federal income tax purposes.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-102 - CORPORATION INCOME TAX DEFINITIONS › Rule 2.26-51-102(17)(B) - Carryforwards for Short Years

Current through Register Vol. 49, No. 6, June, 2024
Tax years for a fractional part of a year will be counted
					 as a full tax year for carryforward of net operating losses and tax credits
					 unless otherwise specified by law.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-204 - RAILROADS AND PUBLIC UTILITIES › Rule 2.26-51-204 - Private Railcar Operators

Current through Register Vol. 49, No. 6, June, 2024
Every taxpayer, other than a railroad, engaged in the
					 business of operating railcars or in the business of furnishing or leasing
					 railcars, by whatever name known, for the transportation of freight or property
					 whether or not owned by such taxpayer, over any railway lines partly within and
					 partly without the state, shall determine the net income subject to tax by
					 taking that portion of total net operating income that the total miles operated
					 in the state bears to total system miles operated.
Example: A corporation which is a private railcar owner had
					 $200,000 federal taxable income, and operated 2,000,000 total miles in Arkansas
					 and 20,000,000 miles everywhere. The apportionment factor is 10.000000% and
					 Arkansas taxable income is $20,000, assuming no adjustments to federal taxable
					 income are required.
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					 to view image
(2,000,000 ÷ 20,000,000) x $200,000 =
					 $20,000
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-204 - RAILROADS AND PUBLIC UTILITIES › Rule 3.26-51-204 - Public Utilities

Current through Register Vol. 49, No. 6, June, 2024
Telephone, electric power and gas distribution companies
					 operating both inside and outside of Arkansas shall allocate and apportion to
					 Arkansas their net income by use of the allocation and apportionment procedures
					 provided under UDITPA (Uniform Division of Income for Tax Purposes Act). UDITPA
					 (ACA
					 26-51-701
					 et seq.) applies to all taxpayers doing business both inside and outside of
					 Arkansas.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-205 - CORPORATION INCOME TAX RATES › Rule 1.26-51-205 - Income Tax Rates

Current through Register Vol. 49, No. 6, June, 2024
Every domestic and foreign corporation doing business
					 within Arkansas shall pay a graduated income tax on its entire Arkansas net
					 taxable income based on the following tax rate:
first $3,000 of net income
1.0%
second 3,000 of net income
2.0%
next 5,000 of net income
3.0%
next 14,000 of net income
5.0%
next 75,000 of net income
6.0%
over 100,000 of net income
6.5%
Note: A tax table is provided in each Corporation Income
					 Tax Booklet and should be used in determining the tax.
Examples:
(1)
				  $25,000 through $100,000 Tax is $940 plus 6% of excess over $25,000.
Click here
					 to view image
(2)
				  Over $100,000 Tax is $5,440 plus 6.5% of the excess over $100,000.
Click here
					 to view image
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-303 - EXEMPT ORGANIZATIONS › Rule 1.26-51-303 - Definitions and Guidelines for Claiming Tax-Exempt Status

Current through Register Vol. 49, No. 6, June, 2024
"Corporation" shall mean an entity operating under articles
					 of incorporation, being properly registered with Arkansas, and meeting the
					 requirements of Section 303 for recognition of tax exempt status.
"Trust" shall mean an entity operating under a trust
					 indenture or agreement.
A "cooperative association" is a group of individuals
					 formed to participate in a productive enterprise, the profits being shared in
					 accordance with the capital or labor contributed by each.
A "partnership" includes a syndicate, group, joint venture
					 or other unincorporated organization operating under the terms and conditions
					 of a partnership agreement.
"Association" shall mean an entity operating under articles
					 of association, a constitution or other creating documents with a declaration
					 or other evidence the organization was formed by adoption of the document by
					 more than one person and having by-laws.
"Unrelated income" shall mean any income earned from
					 activities carried on by the organization which is not substantially related to
					 its exempt purposes.
"IRS Ruling Letter" shall mean an official notification by
					 the Internal Revenue Service of acceptance of tax-exempt status of the
					 organization.
Nonprofit corporations, unincorporated groups or
					 associations and trusts shall be eligible to receive income tax-exempt status
					 under ACA
					 26-51-303 or
					 ACA
					 26-51-309
					 upon submitting proper documentation and application to the Arkansas Revenue
					 Division, Corporation Income Tax Section, P.O. Box 919, Little Rock, Arkansas
					 72203-0919. The following information must be submitted for a determination of
					 state income tax-exempt status:
A.
				  Organizations with an IRS Ruling letter:
1.
				  Copy of IRS Ruling letter;
2. Copy
				  of pages 1 and 2 of IRS form 1023 or 1024;
3. Statement declaring Arkansas Code under
				  which exempt.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-401 - ACCOUNTING METHODS › Rule 1.26-51-401(a) - Accounting and Recordkeeping Requirements

Current through Register Vol. 49, No. 6, June, 2024
Arkansas taxpayers must use the same accounting method as
					 that used for federal income tax purposes.
Each taxpayer is required by Arkansas law to file an income
					 tax return reflecting its true and correct income. Therefore, adequate
					 accounting records and source documents must be retained to justify that the
					 filed income tax returns are a true and correct accounting of the taxpayer's
					 transactions for each tax year. As a general rule, the accounting records and
					 source documents should be retained for a minimum of six (6) years after the
					 return that such records support has been filed.
Essential accounting requirements are as follows:
(1) In all cases in which the production,
				  purchase or sale of merchandise of any kind is an income-producing factor,
				  inventories of the merchandise on hand (including finished goods, work in
				  process, raw materials, and supplies) should be taken at the beginning and end
				  of the year and used in computing the net income for the tax year;
(2) Expenditures made during the tax year
				  should be properly classified as between capital and expense. Expenditures for
				  items of plant, equipment, etc., which have a useful life extending
				  substantially beyond the tax year should be charged to a capital account and
				  not to an expense account; and
(3)
				  In any case in which the cost of capital assets is being recovered through
				  deductions for wear and tear, depletion or obsolescence, any expenditure (other
				  than ordinary repairs) made to restore the property or prolong its useful life
				  should be added to the property account or charged against the appropriate
				  reserve and not to current expenses.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-401 - ACCOUNTING METHODS › Rule 1.26-51-401(a) - Accounting Requirements

Current through Register Vol. 49, No. 6, June, 2024
Only those methods of accounting which clearly indicate the
					 taxpayer's income will be accepted. All items of gross income and all
					 deductions must be treated with reasonable consistency. All items of gross
					 income subject to taxation shall be included in gross income for the tax year
					 in which they are received by the taxpayer, unless in order to clearly reflect
					 income such amounts are to be properly accounted for as of a different period.
					 See ACA
					 26-51-404(a)(2).
					 For instance, in a case where it is necessary to use an inventory, no other
					 accounting method with respect to purchases and sales will correctly reflect
					 income except an accrual method. A taxpayer is deemed to have received items of
					 gross income which have been credited to or set apart for him without
					 restriction. On the other hand, appreciation in value of property is not an
					 accrual of income to a taxpayer prior to the realization of such appreciation
					 through sale or conversion of the property.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-401 - ACCOUNTING METHODS › Rule 1.26-51-401(b) - Change in Accounting Methods

Current through Register Vol. 49, No. 6, June, 2024
If for any reason the method of reporting income subject to
					 tax is changed, the taxpayer shall attach to his income tax return a copy of
					 the Internal Revenue Service certification or approval of the change in
					 accounting method.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-402 - BASIS FOR DETERMINING TAX LIABILITY › Rule 1.26-51-402(a) - Tax Year

Current through Register Vol. 49, No. 6, June, 2024
No income tax return can be made for a period of more than
					 twelve months, unless the return is based on a 52 or 53 week tax year. A
					 separate income tax return for a fractional part of a year is therefore
					 required whenever there is a change (with the approval of the Director) in the
					 basis of computing net income from one tax year to another tax year. The
					 requirements for filing a separate income tax return and payment of tax for a
					 part of a tax year are the same as for the filing of an income tax return and
					 the payment of tax for a full tax year closing at the same time. The tax on net
					 income computed for the period for which a separate income tax return is made
					 shall be computed at the rate for the tax year in which such period is
					 included. Arkansas taxpayers must use the same tax year as that used on the
					 federal income tax return.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 1.26-51-404(a)(1) - Definitions

Current through Register Vol. 49, No. 6, June, 2024
Corporation income tax is imposed upon net income. In the
					 computation of the tax, various classes of income must be considered.
(a) "Gross Income" means all income which
				  flows to the taxpayer, other than a return of capital, and includes the forms
				  of income specifically described as gains and profits, including gains derived
				  from the sale or other disposition of capital assets. Many factors must be
				  taken into consideration in accurately determining gross income, among which
				  are inventories, accounts receivable, property exhaustion, accounts payable for
				  expenses incurred and exemptions as allowed by Arkansas law.
(b) "Net income" is gross income less
				  statutory deductions. The statutory deductions are generally, though not
				  exclusively, expenditures (other than capital expenditures) connected with the
				  production of income.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 2.26-51-404(a)(1) - Receipt of Income

Current through Register Vol. 49, No. 6, June, 2024
Income which is credited to the account of or set apart for
					 a taxpayer and which may be drawn upon by it at any time is subject to tax for
					 the year during which so credited or set apart, although not then actually
					 reduced to possession. To constitute receipt in such a case, the income must be
					 credited or set apart to the taxpayer without any substantial limitation or
					 restriction as to the time or manner of payment or condition upon which payment
					 is to be made, and must be made available to the taxpayer so that it may be
					 drawn upon at any time. The income must be brought within the taxpayer's own
					 control and disposition. A book entry, if made, should indicate an absolute
					 transfer from one account to another. Where a corporation contingently credits
					 its employees with bonus stock, but the stock is not available to such
					 employees until some future date, the mere crediting on the books of the
					 corporation does not constitute receipt.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 3.26-51-404(a)(1) - Manufacturing, Merchandising and Mining

Current through Register Vol. 49, No. 6, June, 2024
In the case of a manufacturing, merchandising or mining
					 business, "gross income" means the total sales less the cost of goods sold,
					 plus any income from investments and from incidental or outside operations or
					 sources. In determining the gross income, subtractions should not be made for
					 depreciation, depletion, selling expenses, losses or for items not ordinarily
					 allowable in computing the cost of goods sold.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 4.26-51-404(a)(1) - Contract with US Government

Current through Register Vol. 49, No. 6, June, 2024
The income of an independent contractor from a contract
					 with the United States Government must be included in gross
					 income.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 5.26-51-404(a)(1) - Payment in Forms Other than Cash

Current through Register Vol. 49, No. 6, June, 2024
Where services are paid for with something other than
					 money, the fair market value for the item taken in payment is the amount to be
					 included as income. Unless there is evidence to the contrary, services rendered
					 at a stipulated price will be presumed to be the fair market value of the
					 compensation received.
Compensation paid to an employee of a corporation in the
					 corporation's own stock is to be treated as if the corporation sold the stock
					 for its fair market value and then paid the employee in cash.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 6.26-51-404(a)(1) - Promissory Notes

Current through Register Vol. 49, No. 6, June, 2024
Notes or other evidence of indebtedness, received as
					 payment for goods or services or other types of income and not merely as
					 security for such payment, constitute income to the amount of their fair market
					 value. Such notes not bearing interest shall be discounted at the fair market
					 rate and the discounted value recognized as income at the time of receipt. The
					 amount of the discount of such notes is amortized and recognized as income when
					 received by the taxpayer.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 7.26-51-404(a)(1) - Leased Property

Current through Register Vol. 49, No. 6, June, 2024
Rents received by a lessor corporation which are based on a
					 rate of dividend or interest on capital stock or outstanding indebtedness,
					 including any fixed tax or insurance payments, shall be reported by the lessor
					 corporation as rental income.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 8.26-51-404(a)(1) - Sale of Stock Shares

Current through Register Vol. 49, No. 6, June, 2024
The proceeds from the sale by a corporation of its capital
					 stock, either through original issue or secondary transactions, whether in
					 excess of or less than par value or purchase cost, constitute a capital
					 transaction of the company and will not produce taxable income nor a deductible
					 loss for the corporation.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 9.26-51-404(a)(1) - Corporate Bonds

Current through Register Vol. 49, No. 6, June, 2024
When bonds are originally issued by a corporation at a fair
					 market value which results in a premium or a discount compared to face value,
					 the premium (income) or discount (expense) should be prorated or amortized over
					 the life of the bonds.
When a corporation purchases and retires any of its bonds
					 at a fair market price greater than or less than the issuing price, the amount
					 of the purchase price over the issue price (excess amount) is a deductible
					 expense for the tax year or the amount of the issue price over the purchase
					 price (lesser amount) is income for the tax year. The deductible excess amount
					 is reduced by any previously amortized issue discount or increased by any
					 previously amortized issue premium of the bonds. The taxable lesser amount is
					 increased by any previously amortized issue discount or reduced by any
					 previously amortized issue premium.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 10.26-51-404(a)(1) - Farming

Current through Register Vol. 49, No. 6, June, 2024
The term "farm" is to be interpreted in its ordinary,
					 accepted sense. A farm is used to produce agricultural products such as
					 livestock (including fish), dairy products, crops, fruits and nuts. A taxpayer
					 engaged in forestry or the growing of timber or trees is not engaged in
					 farming. A person cultivating or operating a farm for recreation or pleasure
					 rather than a profit is not engaged in the business of farming. See IRC
					 Regulations § 1.61 -4(d) and § 1.175 -3.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 11.26-51-404(a)(1) - Sale of Property

Current through Register Vol. 49, No. 6, June, 2024
When property is acquired and later sold for an amount in
					 excess of the cost or other basis, the gain on the sale is income. When a
					 taxpayer sells its capital assets in whole or in part, it shall include in its
					 gross income for the tax year in which the sale was made the gain from such
					 sale computed as provided in ACA
					 26-51-411
					 through ACA
					 26-51-413.
					 If the purchaser takes possession of the assets and assumes the liability, then
					 the amount so assumed is part of the selling price.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 12.26-51-404(a)(1) - Corporate Dissolution

Current through Register Vol. 49, No. 6, June, 2024
When a corporation is dissolved, its affairs are usually
					 settled by a receiver or trustee in dissolution. The corporate existence is
					 continued for the purpose of liquidating the assets and paying the debts, and
					 the receiver or trustee may act for the corporation for such purposes. Any sale
					 of property by them is to be treated as if made by the corporation for the
					 purpose of ascertaining the gain or loss. No gain or loss is realized by a
					 corporation from the distribution of its assets in a partial or complete
					 liquidation, even though the assets may have appreciated or depreciated in
					 value since their acquisition.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 13.26-51-404(a)(1) - Voluntary Shareholder Payments

Current through Register Vol. 49, No. 6, June, 2024
Where a corporation requires additional funds for
					 conducting its business and obtains such funds through voluntary pro rata
					 payments by its shareholders and the amount so received is credited to its
					 surplus account or to a special capital account, such amounts will not be
					 considered income, even though there is no increase in the outstanding shares
					 of stock of the corporation. The payments in such circumstances are in the
					 nature of voluntary assessments that represent an additional price paid for the
					 shares of stock held by the individual shareholder, and will be considered as
					 an addition to and a part of the operating capital of the
					 company.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 14.26-51-404(a)(1) - Trusts

Current through Register Vol. 49, No. 6, June, 2024
If a corporation, for the purpose of ensuring payment of
					 its bonds or other indebtedness, places property in trust or sets aside certain
					 amounts in a sinking fund under the control of a trustee who may be authorized
					 to invest and reinvest such sums from time to time, the property or fund thus
					 set aside by the corporation and held by the trustee is an asset of the
					 corporation and any gain arising therefrom is income of the corporation and
					 shall be included as such in its gross income.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 15.26-51-404(a)(1) - Annuities

Current through Register Vol. 49, No. 6, June, 2024
Amounts received as an annuity are subject to tax except
					 receipts which are considered to represent a reduction or return of
					 consideration paid. The proportionate part of each annuity payment which is
					 excludable from gross income is a fraction. The numerator is the investment in
					 the contract on the annuity starting date. The denominator is the expected
					 return under the contract on that date. Investment in the contract is the total
					 amount paid, less amounts received prior to the annuity starting date which
					 were not included in gross income. The annuity starting date is the later of
					 the first day a benefit payment is received under the annuity contract, or the
					 fixed date in the contract.
Example: Brown received $10,000.00 on a 10-year endowment
					 contract which matured in 1993. He had paid premiums of $8,500.00 and had
					 received dividends of $200.00 before the contract matured. Brown's cost to be
					 recovered tax free is $8,300.00 ($8,500.00 minus $200.00). If payments are
					 received in installments, 83% of each payment (8,300 ÷ 10,000) will be a
					 nontaxable return of consideration paid and the remaining 17% will be
					 taxable.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 16.26-51-404(a)(1) - Real Estate

Current through Register Vol. 49, No. 6, June, 2024
Where a tract of land is purchased with the intent of
					 selling subdivided lots or parcels, the cost or other basis shall be equitably
					 apportioned to the several lots or parcels and made a matter of record on the
					 books of the taxpayer. To the extent that any gain derived from the sale of any
					 such lots or parcels constitutes taxable income, it may be reported as income
					 for the tax year in which the sale is made. This rule contemplates that there
					 must be a measure of gain or loss on every lot or parcel sold, and not measured
					 on the entire tract as a whole. The sale of each lot or parcel must be treated
					 as a separate transaction and gain or loss computed
					 accordingly.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 17.26-51-404(a)(1) - Lease of Buildings

Current through Register Vol. 49, No. 6, June, 2024
When buildings are erected or improvements made by a lessee
					 pursuant to an agreement with the lessor and such buildings or improvements are
					 not subject to removal by the lessee, the lessor may report the income
					 therefrom upon either of the following bases:
(a) The lessor may report as income, at the
				  time when such buildings or improvements are completed, the fair market value
				  of such buildings or improvements subject to the lease; or
(b) The lessor may spread over the life of
				  the lease the estimated depreciated value of such buildings or improvements at
				  the termination of the lease and report as income for each tax year of the
				  lease an allocated part thereof.
If the lease is terminated and the lessor comes into
					 possession or control of the property prior to the time originally fixed for
					 the termination of the lease, the lessor receives additional income for the tax
					 year in which the lease is so terminated to the extent that the value of such
					 buildings or improvements exceeds the amount already reported as income on
					 account of the erection of such buildings or improvements. No appreciation in
					 value due to causes other than the premature termination of the lease shall be
					 included. Conversely, if the buildings or improvements are destroyed prior to
					 the expiration of the lease, the lessor is entitled to deduct as a loss for the
					 tax year when such destruction takes place the amount previously reported as
					 income because of the erection of such buildings or improvements, less any
					 salvage value and only to the extent that such loss was not compensated for by
					 insurance.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 18.26-51-404(a)(1) - Long-Term Contracts

Current through Register Vol. 49, No. 6, June, 2024
Income from long-term contracts is taxable for the period
					 in which the income is generated. The determination of taxable income is
					 dependent upon the nature and terms of the contract. Arkansas taxpayers must
					 use the same accounting method as that used for federal income tax
					 purposes.
"Long-term" contracts are contracts which will take more
					 than one (1) year to be fully and completely performed.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 19.26-51-404(a)(1) - Stock Distributions

Current through Register Vol. 49, No. 6, June, 2024
The issuance of its own stock by a corporation as a
					 dividend to its shareholders does not result in taxable income to such
					 shareholders. However, any gain derived from the sale of such stock by the
					 shareholders is taxable to the shareholders. Distributions received by
					 shareholders from regulated investment companies are, by reason of the
					 shareholder's option to receive the equivalent of cash or new stock, deemed to
					 be a cash dividend and are therefore taxable.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 1.26-51-404(a)(2) - Receipt of Income

Current through Register Vol. 49, No. 6, June, 2024
All items of gross income received by a taxpayer must be
					 included in the taxpayer's gross income for the tax year in which such items
					 were received.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 2.26-51-404(a)(2) - Installment Sales of Personal Property

Current through Register Vol. 49, No. 6, June, 2024
Dealers who sell personal property on an installment plan
					 must include all installment payments received during any given tax year in the
					 dealer's gross income for such tax year. The income from installment sales
					 cannot be reported evenly over the life of the installment contract when
					 payments are accelerated or delayed compared to the contractual amortization. A
					 dealer is one who is engaged in buying and selling personal property of the
					 same type or real estate as his principal business. For treatment of gain or
					 loss on such sales, see 1.
					 26-51-411(e).
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 3.26-51-404(a)(2) - Installment Sales of Real Estate

Current through Register Vol. 49, No. 6, June, 2024
A taxpayer who sells real estate on an installment plan
					 must include all installment payments received during any given tax year in the
					 taxpayer's gross income for such tax year. The income from installment sales
					 cannot be reported evenly over the life of the installment contract when
					 payments are accelerated or delayed compared to the contractual
					 amortization.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 1.26-51-404(b)(1) - Gain on Compulsorily or Involuntarily Converted Property

Current through Register Vol. 49, No. 6, June, 2024
Section 1033 of the Internal Revenue Code of 1986, as in
					 effect on January 1, 1997 relating to the exclusion from gross income of gain
					 resulting from the involuntary conversion of a taxpayer's property, has been
					 adopted for the purpose of computing Arkansas income tax liability. Refer to
					 Treasury Regulations § 1.1033(a) -1 et seq. for guidance on such
					 matters.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 1.26-51-404(b)(3) - Life Insurance Proceeds

Current through Register Vol. 49, No. 6, June, 2024
Proceeds of life insurance policies paid by reason of death
					 of the insured to his/her estate or any beneficiary either in a lump sum or
					 otherwise, except a transferee for valuable consideration, is excluded from the
					 gross income of the beneficiary. Interest paid on the proceeds is included in
					 gross income.
Transferees for valuable consideration and recipients, paid
					 due to reasons other than insured death, of life insurance, endowment, or
					 annuity contracts include in gross income the proceeds and interest that are in
					 excess of the total consideration, premiums, and other sums paid to obtain the
					 contract.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 1.26-51-404(b)(6) - Interest on US Government Obligations

Current through Register Vol. 49, No. 6, June, 2024
Interest earned on obligations of the United States or its
					 possessions is not included in gross income.
"Obligations of the United States" means any U.S.
					 Government obligation used to finance the national debt, such as U.S. Treasury
					 bills, savings bonds or any other instrument acknowledged by the U.S. Secretary
					 of the Treasury as an obligation of the United States.
These obligations must be specifically exempt from state
					 taxation by federal law or must meet the four criteria established by Smith v.
					 Davis, 323 U.S. 111, 89 L Ed 107, 65 S Ct 157 (1944). The requirements are that
					 the obligations must:
1) be in
				  writing;
2) bear specific
				  interest;
3) bind the U.S. to pay
				  specific sums at specific dates, and;
4) have congressional authority to pledge the
				  full faith and credit of the United States in support of the promise to pay.
For example, interest received from the Federal National
					 Mortgage, Government National Mortgage and Federal Home Loan Mortgage
					 Corporation do not meet all four of the above stated requirements and therefore
					 is not tax exempt. This is not intended to be an all inclusive
					 list.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 2.26-51-404(b)(6) - Interest on State of Arkansas Obligations

Current through Register Vol. 49, No. 6, June, 2024
Interest earned on obligations of the State of Arkansas or
					 any political subdivision thereof is not included in gross income.
"Obligations of the State of Arkansas" means any obligation
					 backed by credit of the State of Arkansas.
"Any political subdivision" means a county, city or town,
					 including special assessment districts such as road, water, sewer, reclamation,
					 drainage, levee, school or similar districts.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-404 - GROSS INCOME GENERALLY › Rule 1.26-51-404(b)(11) - Cancellation or Forgiveness of Indebtedness

Current through Register Vol. 49, No. 6, June, 2024
The cancellation and forgiveness of indebtedness may amount
					 to a payment of income, a gift or a capital transaction, depending upon the
					 circumstances. If, for example, an individual performs services for a creditor
					 in exchange for cancellation of a debt, income equal to the debt is realized by
					 the debtor as compensation for his services. If, however, a creditor merely
					 desires to benefit a debtor, and, without any consideration therefore, cancels
					 the debt, the amount of the debt is a gift from the creditor to the debtor and
					 need not be included in the debtor's gross income. If a shareholder in a
					 corporation which is indebted to him gratuitously forgives the debt, the
					 transaction amounts to a contribution to the capital of the
					 corporation.