Section 22 Classification of Particular Items of Income
Library | Tax Law 2009 |
The regulations provide the following guidelines for the classification of particular items of income:
- Rents from real and tangible personal property are business income if the property is used directly or incidentally in the taxpayer’s business. 12 C.S.R. § 10-2.075(5)(A). For example, the car rental income of a car rental business is business income, as is rental income from short-term leases of equipment generally used in the taxpayer’s business but temporarily not needed. 12 C.S.R. § 10-2.075(5)(A)1 and 2. Other examples in the regulations imply a very mechanical approach
( If a clothing store chain owns a 5-story
office building and uses the street floor as a retail store and 2 additional floors as its corporate headquarters, the rental income
of the remaining 2 floors is incidental to
the taxpayer’s trade or business, and the rental income is business income. 12 C.S.R. § 10-2.075(5)(A)3.
( But if the chain owns a 20-story office building and uses the street floor as a retail store
and the second floor as a corporate headquarters, the rental of the remaining 18 floors is considered as separate from the operation of the taxpayer’s business, and the rental income is nonbusiness income. 12 C.S.R. § 10-2.075(5)(A)5.
- The gain or loss from the disposition of an asset is nonbusiness income or loss if the asset was used for the production of nonbusiness income, but is business income if the property was used in the taxpayer’s business. 12 C.S.R. § 10-2.075(5)(B). Although the AHC applied 12 C.S.R. § 10-2.075(5)(B) literally in L.A.F. Delaware...
To continue reading
Request your trial- Books and Journals
- Section 1 Domestic Corporations
- Section 2 Jurisdiction to Tax Foreign Corporations
- Section 3 Eligibility for Allocation and Apportionment of Income
- Section 4 Introduction
- Section 5 Consolidated Returns
- Section 6 Use of a Nonstandard Apportionment Formula
- Section 7 Single-Factor Formula
- Section 8 Transactions Occurring Before January 1, 1980, and Transactions After December 31, 1979, Not Involving Sales of Tangible Personal Property
- Section 9 Summary: Circumstances Requiring or Permitting Apportionment
- Section 15 Entitlement to Apportionment of Income vs. Application of the Apportionment Formula
- Section 16 Double Taxation
- Section 17 Transactions Occurring After December 31, 1979, Involving Sales of Tangible Personal Property
- Section 18 Transactions Occurring in Taxable Years Beginning After December 31, 1988, Involving Sales of Tangible Personal Property
- Section 19 Allocation of Income
- Section 20 Eligibility for Allocation and Apportionment of Income
- Section 21 Business/Nonbusiness Income Distinction
- Section 22 Classification of Particular Items of Income
- Section 23 Introduction
- Section 24 Property Factor
- Section 25 Numerator of the Property Factor
- Section 26 Valuation
- Section 27 Payroll Factor
- Section 28 Sales Factor
- Section 29 Multiple Businesses of a Single Taxpayer
- Section 30 Consistency and Uniformity in Reporting
- Section 31 Other Methods of Allocation and Apportionment
- Section 32 Affiliated Groups of Corporations Doing an Interstate Business
- Section 33 Division of Deductions
Subscribers can access the reported version of this case.
You can sign up for a trial and make the most of our service including these benefits.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.
Subscribers are able to see a list of all the cited cases and legislation of a document.
You can sign up for a trial and make the most of our service including these benefits.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.
Subscribers are able to see a list of all the documents that have cited the case.
You can sign up for a trial and make the most of our service including these benefits.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.
Subscribers are able to see the revised versions of legislation with amendments.
You can sign up for a trial and make the most of our service including these benefits.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.
Subscribers are able to see any amendments made to the case.
You can sign up for a trial and make the most of our service including these benefits.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.
Subscribers are able to see a visualisation of a case and its relationships to other cases. An alternative to lists of cases, the Precedent Map makes it easier to establish which ones may be of most relevance to your research and prioritise further reading. You also get a useful overview of how the case was received.

Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.
Subscribers are able to see the list of results connected to your document through the topics and citations Vincent found.
You can sign up for a trial and make the most of our service including these benefits.
Why Sign-up to vLex?
-
Over 100 Countries
Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more.
-
Thousands of Data Sources
Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the world’s leading publishers.
-
Find What You Need, Quickly
Advanced A.I. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research.
-
Over 2 million registered users
Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world.