§ 5747.212 — Apportioning gain recognized by nonresident equity investor selling an investment in a closely-held business

Ohio § 5747.212

• Jurisdiction: Ohio
• Title 57: Taxation
• Ch. 5747: Income Tax

Text

(A) This section applies solely for the purpose of computing the credit allowed under division (A) of section5747.05of the Revised Code and computing income taxable in this state under division (D) of section5747.08of the Revised Code.

(B) A taxpayer, directly or indirectly, owning at any time during the three-year period ending on the last day of the taxpayer's taxable year at least twenty per cent of the equity voting rights of a section5747.212entity shall apportion any income, including gain or loss, realized from each sale, exchange, or other disposition of a debt or equity interest in that entity as prescribed in this section. For such purposes, in lieu of using the method prescribed by sections5747.20and5747.21of the Revised Code, the investor shall apportion the income using the average of the section5747.212entity's apportionment fractions otherwise applicable under section5733.05,5733.056, or5747.21of the Revised Code for the current and two preceding taxable years. If the section5747.212entity was not in business for one or more of those years, each year that the entity was not in business shall be excluded in determining the average.

(C) For the purposes of this section:

(1) A "section5747.212entity" is any qualifying person if, on at least one day of the three-year period ending on the last day of the taxpayer's taxable year, any of the following apply:

(a) The qualifying person is a pass-through entity;

(b) Five or fewer persons directly or indirectly own all the equity interests, with voting rights, of the qualifying person;

(c) One person directly or indirectly owns at least fifty per cent of the qualifying person's equity interests with voting rights.

(2) A "qualifying person" is any person other than an individual, estate, or trust.

(3) "Estate" and "trust" do not include any person classified for federal income tax purposes as an association taxable as a corporation.

Legislative History

Effective: November 15, 2015 | Latest Legislation: Senate Bill 208 - 131st General Assembly