15 AAC 19.031. Business and nonbusiness income

15 AAC 19.031. Business and nonbusiness income - application of definitions

(a) The following subsections in this section are rules for determining whether particular income is business or nonbusiness income.

(b) Rents from Real and Tangible Personal Property. Rental income from real and tangible personal property is business income if the property with respect to which the rental income was received is used in the taxpayer's trade or business or is incidental to it and, therefore, is includable in the property factor under 15 AAC 19.141 and 15 AAC 19.151.

(c) Gains or Losses From Sales of Assets. Gains or losses from the sale, exchange, or other disposition of real or tangible or intangible personal property constitutes business income if the property while owned by the taxpayer was used in the taxpayer's trade or business. However, if that property was used for the production of nonbusiness income or otherwise was removed from the property factor before its sale, exchange or other disposition, the gain or loss will constitute nonbusiness income. See 15 AAC 19.141 and 15 AAC 19.151.

(d) Interest. Interest income is business income where the intangible with respect to which the interest was received arises out of or was created in the regular course of the taxpayer's trade or business operations or where the purpose for acquiring and holding the intangible is related to or incidental to those trade or business operations.

(e) Dividends. Dividends are business income where the stock with respect to which the dividends are received arises out of or was acquired in the regular course of the taxpayer's trade or business operations or where the purpose for acquiring and holding the stock is related to or incidental to those trade or business operations.

(f) Patent and Copyright Royalties. Patent and copyright royalties are business income where the patent or copyright with respect to which the royalties were received arises out of or was created in the regular course of the taxpayer's trade or business operations or where the purpose for acquiring and holding the patent or copyright is related to or incidental to those trade or business operations.

History: Eff. 5/24/78, Register 66; am 3/31/82, Register 81

Authority: AS 43.05.080

AS 43.19.010

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