Investment Partnerships & Investment S-Corporations

In cases where a partnership or an S-corporation does not conduct an active trade or business, but makes investments in stocks, bonds, securities and real estate, the nonresident partners can reflect a different business activity ratio for different types of income. 

EXAMPLE:  If an investment partnership receives interest, dividend and capital gain income from stocks, bonds and securities, the business activity ratio for the nonresident partner would be 0% for interest, dividend and capital gain income on the Iowa Schedule K-1 form.  This holds true even if the commercial domicile of the partnership is in Iowa.  However, if the investment partnership received rental income from Iowa property, the business activity ratio for the nonresident partner would be 100% for net rental income on the Iowa Schedule K-1 form.