Illinois Statutes Chapter 35. Revenue § 5/308. Allocation of Subchapter S Corporation Income by Subchapter S Corporations and Shareholders Other Than Residents

§ 308. Allocation of Subchapter S Corporation Income by Subchapter S Corporations and Shareholders Other Than Residents. (a) Allocation of Subchapter S corporation business income by shareholders other than residents. The respective shares of shareholders other than residents in so much of the business income of the Subchapter S corporation as is allocated or apportioned to this State in the hands of the Subchapter S corporation shall be taken into account by such shareholder pro rata in accordance with the requirements of Section 1366 of the Internal Revenue Code 1 for the Subchapter S corporation's taxable year and allocated to this State.

(b) Allocation of Subchapter S corporation nonbusiness income by shareholders other than residents. The respective share of shareholders other than residents in the items of Subchapter S corporation income and deduction not taken into account in computing the business income of the Subchapter S corporation shall be taken into account by such shareholders pro rata in accordance with the requirements of Section 1366 of the Internal Revenue Code for the corporation's taxable year, and allocated as if such items had been paid, incurred or accrued directly to such shareholders in their separate capacities.

(c) Allocation or apportionment of base income by the Subchapter S corporation. Base income of a Subchapter S corporation shall be allocated or apportioned to this State pursuant to this Article 3 in the same manner as it is allocated or apportioned for any other nonresident.

(d) This Section shall not apply to any corporation for which there is in effect a federal election to opt out of the provisions of the Subchapter S Revision Act of 1982  2 and have applied instead the prior federal Subchapter S rules as in effect on July 1, 1982.