Section 9-119. TAX COMPUTATIONS FOR UNINCORPORATED BUSINESSES

 

119.1As in the case of corporations, the phrase "taxable income" of unincorporated business means the amount of net income derived from sources within the District within the meaning of Title 10 of the Act, and shall be determined in accordance with Title 10 of the Act and § 122 of this chapter; except as otherwise provided in § 119.6.

 

119.2Under the Act, the net income of an unincorporated business is computed in practically the same manner as the net income of a corporation. Accordingly, an unincorporated business is generally entitled to allowable deductions from gross income to the same extent that would be allowable if the business were incorporated.

 

119.3The Act is drawn so that only income taxed against an unincorporated business is not again taxed to the owner or owners of the business as individuals.

 

119.4No deduction which is allowed or allowable from the gross income of an unincorporated business subject to the tax imposed by Title 8 of the Act shall be allowed as a deduction in the individual return of any person entitled to share in the net income of the business.

 

119.5Taxes, contributions, and other deductions of the individual owners of a business which are not applicable to the income of the business are not deductible in the unincorporated business tax return, but may be deducted in the individual returns of the proprietors, partners, or other persons entitled to share in the net income.

 

119.6Any amount exempted from the tax imposed by Title 8 shall be reported and included in the gross income of the person(s) entitled to share in the exemption. If there is more than one (1) taxpayer entitled to share the amount excluded, the amount excluded by each shall be the same proportion as the amount of net income apportioned to that taxpayer for federal income tax purposes. That amount shall be reported in the return of each District resident individual for his or her taxable year in which the taxable year of the business ended.

 

119.7The full amount of the exemption allowed by law shall be deductible from the net income from District sources of an unincorporated business (reporting for a full year) whether the entire income of the business is wholly or partly derived from sources within the District.

 

source

Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 307.9 through 307.12; as amended by the Third Amendment to the Revenue Act of 1975 Act. D.C. Law 1-61. 22 DCR 4383 (February 12, 1976).