200807215L



AWM 08144529

July 31, 2008

Dear **************:

Thank you for your May 18 email and your follow-up message today about the 
revised Texas franchise tax with the margin calculation.

You ask in your message how to handle revenue received by partnerships and 
trusts from an estate of a natural person.  The partnerships/trusts receive an 
IRS form 1041 K-1 from the estate.

Texas Tax Code (TTC) Section 171.1011(c) allows a subtraction from total 
revenue for net distributive income (to the extent included in total revenue) 
received from a taxable entity treated as a partnership or as an S corporation 
for federal income tax purposes.  There is no similar subtraction for revenue 
received from an estate.  This means that the partnership/trust receiving the 
income from the estate will include revenue amounts from the K-1 in the 
computation of their total revenue.

This response is based on current law and the facts and information presented.  
If there are different or additional facts, the response may change.  

If you have any additional questions, please email us at 
tax.help@cpa.state.tx.us.

Sincerely,


Janet Spies
Franchise Tax Policy
Texas Comptroller of Public Accounts




ACCESSION NUMBER: 200807215L
SUPERSEDED: L
DOCUMENT TYPE: L
DATE: 07/31/2008
TAX TYPE: FRANCHISE