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California source income in S Corp and C Corp

Suppose there is an S corp in California, and the corp has a shareholder in TX. Does the TX shareholder have to file a CA-540NR tax return to report their profits from the S Corp's K1?

What if the corp is a C corp? Does the shareholder have to pay CA tax on the distributions reported on the 1099-DIV?

I'm guessing the answers are yes and no, but it doesn't quite make sense why S corp income is CA source.

We had a recent post about a CA LLC that has rental income, but I know that rental income from houses in CA is CA source income.

Reply to
removeps-groups
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wrote

"S" profits, yes.

Dividends, no.

The business activity is what sources the income. Profits on that activity are passed through, so is the nexus to file and pay CA tax.

Dividends are not activity. I have no clue where GE makes it's money, and it's already been taxed to GE by that jurisdiction.

Reply to
paulthomascpa

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