Tax Type
Corporation Income Tax
Description
Permission to allocate capital gains is denied
Topic
Allocation and Apportionment
Date Issued
05-19-1988
May 19, 1988
Re: Request for Ruling; Corporation Income Tax
§58.1-421 Alternative Method of Allocation and Apportionment
Dear****************
This is in response to your amended return filed on May 5, 1987, in which you requested a refund based on use of an alternative method of allocation and apportionment.
Facts
The taxpayer received insurance proceeds which resulted in recognition of a substantial amount of capital gains. The taxpayer properly included the capital gains in apportionable income on the Virginia return. The taxpayer has filed an amended Virginia return in which the capital gains are included in allocable income because North Carolina required the capital gains to be allocated 100% to North Carolina.
Discussion
The policies which apply to requests for an alternative method under §58.1-421 are well established. See Virginia Regulation VR 630-3-421 and Ruling Letters dated October 13, 1983, and February 25, 1987, P.D. No. 87-41 (copies enclosed). After considering the facts set forth, you have not demonstrated by clear and cogent evidence that the statutory method is unconstitutional or inapplicable as applied to your situation. Accordingly, permission to include capital gains in allocable income is denied.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner