Interpretation of rules

[Pacun]

This is the rule for filing a form in DC

Who must file a Form D-30?

Generally, an unincorporated business, with gross income over $12,000,

must file a D-30 (whether or not it has net income). This includes any

business carrying on or engaging in any trade, business, or commercial

activity in DC and receiving income from DC sources.

• T o determine if you need to file, please note that gross income

includes revenue from all DC sources after deducting the cost of

goods sold, but before taking expenses and other deductions allowed

when calculating net income.

• T he act of carrying on or engaging in a trade or business in DC is

determined by the nature and extent of the unincorporated business’

activities in DC conducted by: its owners; members; or through

employees, consultants, agents or other representatives.

An unincorporated business with gross income in DC of over $12,000

from any of the activities listed below, must also file a D-30 return.

• Rental of real or tangible personal property; or

• Leasing of real or tangible personal property; or

• A ny other similar arrangement.

It also reads...

When do you not have to file Form D-30?

• It is a trade, business or professional organization where:

- 80 percent of its gross income comes from personal

services actually rendered by owners or members of the

business; and

- Capital is not a material income-producing factor.

T he 80 percent requirement is met if the activities of your

employees, consultants and agents have or are presumed

to have produced gross income for the business in an

amount at least equal to the gross amount paid them.

The 80 percent test is not satisfied if the amount paid

these persons exceeded 20 percent of the business’ gross

income. If this test is not met, the business is not exempt

from DC taxes and must file a return.

Now, I have a couple of questions:

I am a preparer and make $20K yearly, do I have to file? (Sole Proprietorship, Fed Sch C filer)

How about a lawyer who makes $250K? (Sole proprietorship, Fed Sch C filer)

How about someone that rents out a room for $1100 monthly? (rent collected in 2007 is $13,200)

[zeke]

1. You say you "make $20K." If this is "gross" by definition stated, then as long as your payroll is less than $4K, you should not need to file.

2. Atty needs payroll to be less that $50K to avoid filing reqirement.

3. It appears to me that DC intends that "rent" be considered "business" income for this purpose, thus requiring a report.

Byt, hey - I am just an old farm boy in Illinois - surely someone in DC is familiar with this report.

Zeke