North Carolina Administrative Code

17 NCAC 06B .2403 MEMBERS OF THE ARMED FORCES History Note: Authority G.S. 105-141(a)(21); 105-147(8); 105-262; Eff. March 11, 1978; Repealed Eff. June 1, 1990.

17 NCAC 06B .2404 FOREIGN MOVES History Note: Authority G.S. 105-141(a)(21); 105-147(8); 105-262; Eff. May 1, 1984; Repealed Eff. June 1, 1990.

SECTION .2500 - RETIREMENT PLANS 17 NCAC 06B .2501 GENERAL History Note: Authority G.S. 105-147(20); 105-262; Eff. February 1, 1976; Repealed Eff. June 1, 1982.

17 NCAC 06B .2502 FEDERAL PRACTICE TO BE FOLLOWED History Note: Authority G.S. 105-147(20); 105-262; Eff. February 1, 1976; Amended Eff. February 1, 1988; August 1, 1986; May 1, 1984; June 1, 1982; Repealed Eff. June 1, 1990.

17 NCAC 06B .2503 INDIVIDUAL RETIREMENT CONTRIBUTIONS History Note: Authority G.S. 105-147(20); 105-262; Eff. February 1, 1976; Amended Eff. December 17, 1978; Repealed Eff. June 1, 1982.

17 NCAC 06B .2504 FEDERAL PRACTICE TO BE FOLLOWED History Note: Authority G.S. 105-147(20); 105-262; Eff. February 1, 1976; Amended Eff. May 1, 1984; June 1, 1982; Repealed Eff. June 1, 1990.

SECTION .2600 - CARRY-OVER LOSS 17 NCAC 06B .2601 GENERAL History Note: Authority G.S. 105-147(9)d.; 105-262; Eff. February 1, 1976; Amended Eff. June 1, 1982; Repealed Eff. June 1, 1990.

17 NCAC 06B .2602 DEFINITION History Note: Authority G.S. 105-147(9)d.; 105-262; Eff. February 1, 1976; Repealed Eff. June 1, 1982.

SECTION .2900 - CASUALTY AND THEFT LOSSES 17 NCAC 06B .2901 GENERAL History Note: Authority G.S. 105-147(9)a.; 105-147(9)b.; 105-262; Eff. February 1, 1976; Amended Eff. February 1, 1988; May 1, 1984; June 1, 1982; Repealed Eff. June 1, 1990.

17 NCAC 06B .3009 CONTRIBUTIONS BY NONRESIDENTS History Note: Authority G.S. 105-147(15); 105-147(16); 105-147(18)b.; 105-262; Eff. February 1, 1976; Repealed Eff. June 1, 1982.

17 NCAC 06B .3203 PENALTIES FOR FAILURE TO FILE AND PAY (a) General. -- Under the provisions of G.S. 105-236, both the "failure to file return" and "failure to pay tax when due" penalties, if due, can be applied for the same period. If a return is filed late without payment of th…

17 NCAC 06B .3204 NEGLIGENCE PENALTIES When the accuracy-related penalty has been assessed for federal income tax purposes under Section 6662 of the Internal Revenue Code, the 10 percent negligence penalty shall be assessed for state income tax purposes unless the large individua…

17 NCAC 06B .3205 FAILURE TO REPORT FEDERAL CHANGES History Note: Authority G.S. 105-159; 105-236(3); 105-262; Eff. April 1, 1978; Amended Eff. June 1, 1990; Repealed Eff. June 1, 1993.

17 NCAC 06B .3206 FRAUD PENALTY When an audit is based upon a federal audit report and the fraud penalty has been assessed for federal purposes, the 50 percent fraud penalty shall be assessed for State purposes. When the fraud penalty is assessed, no penalty for negligence shall …

17 NCAC 06B .3207 FAILURE TO FILE INFORMATIONAL RETURNS History Note: Authority G.S. 105-236; 105-262; Eff. April 1, 1978; Amended Eff. June 1, 1993; Repealed Eff. January 1, 1999.

SECTION .3400 - STATUTE OF LIMITATIONS AND FEDERAL CHANGES 17 NCAC 06B .3401 GENERAL History Note: Authority G.S. 105-159; 105-163.16; 105-241.1; 105-262; 105-266; 105-266.1; 105-267; Eff. February 1, 1976; Repealed Eff. June 1, 1993.

17 NCAC 06B .3402 LIMITATIONS FOR ASSESSMENTS A return from which material particulars are missing is not a return for the purpose of determining when the statute of limitations will run. The date the final return is filed is the determining date. There is no statutory provision …

17 NCAC 06B .3403 FEDERAL CHANGES History Note: Authority G.S. 105-159; 105-163.16; 105-241.1; 105-262; Eff. February 1, 1976; Amended Eff. February 1, 1991; Repealed Eff. June 1, 1993.

17 NCAC 06B .3404 FEDERAL CHANGES AND FRAUD When there is a federal change and a fraud penalty is assessed by the federal government, the state may open the year on the basis of either fraud or the federal assessment. History Note: Authority G.S. 105-159; 105-236(a)(3); 105-236(a…

17 NCAC 06B .3405 FAILURE TO PAY TAX History Note: Authority G.S. 105-242(c); 105-262; Eff. February 1, 1976; Repealed Eff. June 1, 1993.

17 NCAC 06B .3406 REFUNDS If the taxpayer has been granted an extension of time for filing the return, the three year period referred to in G.S. 105-241.6 is three years from the extended date. History Note: Authority G.S. 105-262; 105-263; 105-241.6; Eff. February 1, 1976; Amend…

17 NCAC 06B .3407 Service members Civil Relief Act History Note: Authority G.S. 105-262; 50 U.S.C. 501; P.L. 108-189; Eff. February 1, 1976; Amended Eff. February 1, 2005; Repealed Eff. May 1, 2016.

17 NCAC 06B .3408 WAIVER OF TIME LIMITATION History Note: Authority G.S. 105-241.1; 105-262; 105-266; 105-266.1; Eff. December 17, 1978; Amended Eff. June 1, 1993; Repealed Eff. July 1, 2000.

SECTION .3500 - PARTNERSHIPS 17 NCAC 06B .3501 GENERAL The starting point for preparing the North Carolina partnership income tax return (Form D-403) shall be the partnership's total income or loss. If the partnership provides a copy of its federal partnership income tax return (…

17 NCAC 06B .3502 TAXING PARTNERSHIP INCOME History Note: Authority G.S. 105-142(c); 105-262; Eff. February 1, 1976; Amended Eff. June 1, 1982; Repealed Eff. June 1, 1990.

17 NCAC 06B .3503 PARTNERSHIP RETURNS (a) When Required -- A North Carolina partnership return, Form D-403, shall be filed by every partnership doing business in North Carolina if a federal partnership return was required to be filed. The partnership return shall be filed on or b…

17 NCAC 06B .3510 ADDITIONAL FIRST YEAR DEPRECIATION History Note: Authority G.S. 105-147(12); 105-262; Eff. February 1, 1976; Amended Eff. January 21, 1979; Repealed Eff. June 1, 1982.

17 NCAC 06B .3513 NONRESIDENT PARTNERS (a) Although a partnership may treat guaranteed payments to a partner for services or for use of capital as if they were paid to a person who is not a partner, that treatment is only for purposes of determining the partnership's gross income…

17 NCAC 06B .3521 ESTIMATED INCOME TAX No estimated income tax is required of a partnership. A resident individual partner who meets the statutory requirements of G.S. 105-163.15 must pay estimated income tax on Form NC-40. Nonresident individual partners are not required to pay …

17 NCAC 06B .3522 INFORMATION RETURNS History Note: Authority G.S. 105-154(a); 105-262; Eff. February 1, 1976; Repealed Eff. June 1, 1993.

17 NCAC 06B .3526 TAX CREDITS History Note: Authority G.S. 105-151.19; 105-262; Eff. June 1, 1990; Repealed Eff. August 1, 1998.

17 NCAC 06B .3527 DISPOSITION OF PARTNER'S INTEREST (a) An interest in a partnership is intangible personal property. Gain from the sale of a nonresident partner's interest in a partnership is not included in the numerator of the fraction the nonresident uses to determine the amo…

17 NCAC 06B .3528 PART-YEAR RESIDENT PARTNERS A part-year resident receiving partnership income from a partnership doing business in North Carolina and in one or more other states, must prorate his share of the partnership's income attributable and not attributable to North Carol…

17 NCAC 06B .3529 INTEREST INCOME PASSED THROUGH TO PARTNERS (a) Although the interest income passed through to a partner in a partnership retains its same character as when received by the partnership, the expenses incurred in earning interest income shall be either deductible b…

SECTION .3700 - ESTATES AND TRUSTS 17 NCAC 06B .3701 GENERAL History Note: Authority G.S. 105-160 to 105-163; 105-262; Eff. February 1, 1976; Amended Eff. June 1, 1990; Repealed Eff. June 1, 1993.

17 NCAC 06B .3702 GROSS INCOME History Note: Authority G.S. 105-161(a); 105-262; Eff. February 1, 1976; Repealed Eff. June 1, 1982.

17 NCAC 06B .3707 EXEMPT TRUSTS History Note: Authority G.S. 105-161(f); 105-262; Eff. February 1, 1976; Repealed Eff. June 1, 1982.

17 NCAC 06B .3714 TAX CREDITS (a) A fiduciary required to pay an income tax to North Carolina on behalf of a trust or an estate may claim a credit for tax imposed and paid to another state or country on income from sources within the other state or country under the provisions of…

17 NCAC 06B .3715 INCOME TAXABLE TO BENEFICIARIES History Note: Authority G.S. 105-162(a); 105-162(b); 105-262; Eff. February 1, 1976; Amended Eff. May 1, 1984; June 1, 1982; Repealed Eff. June 1, 1990.

17 NCAC 06B .3716 INCOME TAX RETURN FOR ESTATES AND TRUSTS (a) The federal taxable income of the estate or trust shall be the starting point for preparing a North Carolina Income Tax Return for Estates and Trusts, Form D-407. The fiduciary shall determine the estate's or trust's …

17 NCAC 06B .3717 TRUST INSTRUMENTS AND WILLS History Note: Authority G.S. 105-161(e)(1); 105-262; Eff. February 1, 1976; Repealed Eff. June 1, 1990.

17 NCAC 06B .3718 PAYMENT OF TAX History Note: Authority G.S. 105-160.2; 105-160.7; 105-262; Eff. February 1, 1976; Amended Eff. October 1, 1991; June 1, 1990; Repealed Eff. May 1, 2016.

17 NCAC 06B .3719 FAILURE TO FILE PENALTIES History Note: Authority G.S. 105-236; 105-262; Eff. February 1, 1976; Amended Eff. June 1, 1993; Repealed Eff. January 1, 1999.

17 NCAC 06B .3720 LIABILITY OF THE FIDUCIARY History Note: Authority G.S. 105-207; 105-236(10); 105-262; Eff. February 1, 1976; Amended Eff. January 21, 1979; Repealed Eff. June 1, 1993.

17 NCAC 06B .3723 ALLOCATION OF ADJUSTMENTS (a) The additions and deductions to federal taxable income of an estate or trust shall be apportioned between the estate or trust and the beneficiaries based on the distributions of income made during the taxable year. If the trust inst…

17 NCAC 06B .3724 ALLOCATION OF INCOME ATTRIBUTABLE TO NONRESIDENTS (a) If an estate or trust has income from sources outside of North Carolina and if any of the beneficiaries are nonresidents of North Carolina, the portion of federal taxable income of the Fiduciary that is subje…

17 NCAC 06B .3725 ADMINISTRATION EXPENSES History Note: Authority G.S. 105-160.2; 105-262; Eff. June 1, 1990; Repealed Eff. August 1, 1998.

17 NCAC 06B .3804 DEPOSIT OF PAYMENT When a payment is received by the Department of Revenue for less than the correct tax, penalty, and interest due and the payment includes the statement, "paid in full" or other similar statements, the payment will be deposited as required by G…

section .3900 - NONRESIDENTS AND PART-YEAR RESIDENTS 17 NCAC 06B .3901 DEFINITION OF RESIDENT (a) Only One Domicile. -- Domicile means the place where an individual has a true, fixed permanent home and principal establishment, and to which place, whenever absent, the individual h…

17 NCAC 06B .3902 NONRESIDENTS (a) The term "nonresident" includes an individual: (1) Who resides in North Carolina for a temporary or transitory purpose and is, in fact, a domiciliary resident of another state or country; or (2) Who does not reside in North Carolina but has inco…