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What is the difference between Gross Receipts and other incomes explicity on the state schedule( income from passive activity, section 1231 gains, div income, interest income, investment income) ?

When I file for state taxes, what role does Gross Receipt column make?

Thanks much!

Anurag
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What is the difference between Gross Receipts and other incomes explicity on the state schedule( income from passive activity, section 1231 gains, div income, interest income, investment income) ?

When I file for state taxes, what role does Gross Receipt column make?


Gross receipts are all of the positive income items before any deductions. For instance, sales before subtracting cost of goods or other expenses, the sales price of assets (stock or tangible) before subtracting the cost basis, etc.

Whether gross receipts are important for your state income tax depends on the state involved. Some states define their filing threshold on the basis of gross receipts, some on gross (or taxable) income.

In the case of an MLP, you are considered to be operating a business in every state where the MLP operates. Therefore you could have state income tax filing requirements in each of those states, regardless of whether you are a resident or not. It's your responsibility to determine where you have to file and where you don't.

In the past, many investors just ignored any potential filing requirement in non-resident states figuring that it would be difficult for the state to track them down. With the greatly increased level of data sharing among the tax authorities, it's only a matter of time before some of the more aggressive tax departments begin to look to non-resident MLP unitholders to lessen the tax burden on resident taxpayers.

Ira
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Thanks much, IRA!
Is there any website that you might know with links to all states for their filing requirements with respect to such kind of income as MLPs? Or is there an MLP guide or book that I can buy for my taxes?
Anurag
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Is there any website that you might know with links to all states for their filing requirements with respect to such kind of income as MLPs? Or is there an MLP guide or book that I can buy for my taxes?

The National Association of Publicly Traded Partnerships (naptp.org) has a lot of resources. Here's the link to their compilation of state filing requirements. I can't vouch for its accuracy, but there are links to the various state tax departments.

Ira
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Here's the link to their compilation of state filing requirements. I can't vouch for its accuracy, but there are links to the various state tax departments.

Oops! I forgot to include the link. http://naptp.org/Links/State_Tax_Chart.html

Ira
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Thanks IRA!!!

I just found it on my own and reported it on a new thread below. I am really determined to do it myself and have lots of MLPs in my taxable accounts. :) I am building a database and a list of all questions I face that I will share with the Foolish community here.

Another question: What is the difference between Gross taxable income and Gross Receipts? Based on your earlier description of Gross Receipts, I think income = receipts - deductions. Am I right?


Thanks

Anurag
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Another question: What is the difference between Gross taxable income and Gross Receipts? Based on your earlier description of Gross Receipts, I think income = receipts - deductions. Am I right?

In a very loose sense, but not as far as figuring taxes is concerned. Gross receipts are all of the inflows of money to a business. Gross taxable income is defined by the laws of the taxing entity. It is typically the gross receipts less certain directly connected expenses such as cost of goods, cost basis of assets, etc. but before considering other allowable deductions. The analogue to gross taxable income would probably be line 22 on Form 1040 (perhaps line 37). This is not the final number used to calculate the tax liability.

Ira
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