1041-US: Allocating expenses proportionally lower to other income (FAQ)

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Question

Why are expenses allocated proportionally lower to other income?

Answer

If the amount in the Other Income column includes a state tax refund amount, the amount is not included in the calculation when allocating indirect expenses. For allocation purposes, this is considered an adjustment to a prior-year expense rather than a current-year income amount.

Related topic: 1041-US: Expense allocations FAQs

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