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d. Line 30a reflects the net income from nonopera- or disposed of in the normal or ordinary course of
tional activities. It is the total of line 28 plus line 29a business, or that did not generate business expenses
minus line 29b. or income during their holding period. In determining
the operational versus nonoperational asset status,
e. Line 31 – If nonoperational capital gains are used and hence the income and gains, and expenses and
to offset operational capital losses in determining losses associated therewith, the corporation shall not
Federal Taxable Income, the amount of the oper- recognize as nonoperational any asset that does not
ational capital loss offset must be subtracted from meet either the transactional, functional, or opera-
the total nonoperational income to effect the elimi- tional tests.
nation of the nonoperational activity from entire net
income. 2. Line 1 – Prior Years’ Net Nonoperational Assets
Enter the total original federal basis for all nonopera-
f. Line 32 – Enter the adjustments required to reflect tional assets acquired prior to the current period that
the elimination of New Jersey adjustments to the corporation still owns and claims to be nonopera-
Federal Taxable Income on nonoperational ac- tional assets to New Jersey.
tivity reported originally on the applicable lines of
Schedule A (Part II of Forms CBT-100, CBT-100U, 3. Line 2 – Current Year’s Nonoperational Assets
or BFC-1, or Part I of CBT-100S). a. Description – Enter the quantity purchased and
the general nature of the asset purchased (e.g., 1
Example 3 each – machinery, 1 each – building, 100 shares –
Corporation D reported dividend income of $1,000 XYZ, $2,000 – Bonds, etc.).
from various nonsubsidiary companies, of which
the corporation claimed that $300 in dividends from b. Date Acquired – Indicate the date the asset was
Corporation E is nonoperational income. Since first acquired. If the asset was acquired in a prior
50% of the $300 is excluded on line 27, an adjust- year and its status changed from operational to
ment subtracting $150 from nonoperational income nonoperational in the current reporting period,
is required to eliminate the double exclusion. then enter as a second date the date such status
changed in this reporting period.
g. Line 33 – Enter any other adjustments required
to properly reflect the elimination of the nonoper- c. Federal Basis – Indicate the original federal tax
ational income. Submit a separate rider detailing basis used to carry the asset for federal income tax
this amount. Report the federal 250(a) deductions purposes.
attributed to GILTI and FDII amounts here and on
Part III, line 29c. d. New Jersey Nexus – Indicate whether the nonop-
erational asset has a New Jersey nexus. Answer
h. Line 34 is the sum of lines 30a, 31, 32, and 33 and “YES” where the asset was physically located in
represents the net adjustments required to elimi- New Jersey or where any of the activity related to
nate the effect of nonoperational income from en- its purpose, or its management, or its use, or its
tire net income for current period activity. Enter the disposition, took place in whole or in part within this
total on Form CBT-100S, Schedule K or Schedule State during any portion of its holding period.
K Liquidated, Part III, line 1a.
4. Line 3 – Current Year’s Disposition of Nonoper-
i. Line 35 reflects the recapture of prior period ational Assets. Enter the original federal tax basis
deductions when in prior periods property had of any assets purchased in the current period and
been classified as operational property and is later disposed of during the current period and included on
demonstrated to have been nonoperational prop- line 2 of the Schedule O, Part II.
erty and is subsequently disposed of, all expenses,
without limitation, deducted in prior periods related 5. Line 5 – Current Year’s Disposition of Prior Year
to the nonoperational property must be added back Purchases. Enter the original federal tax basis of any
and recaptured as income in the period of disposi- prior year purchases disposed of during the current
tion of such property. period.
j. Line 36 is the sum of lines 34 and 35 and is the 6. Additional Questions – All questions must be
total adjustment required to eliminate the effect of answered. Provide the appropriate responses and,
nonoperational activity from entire net income. The where necessary, provide the additional information
total on this line is carried to Schedule A, Part II, requested. If additional space is required, provide
line 17a of Form CBT-100, CBT-100U, or BFC-1 or supplementary riders.
Schedule A, Part I, line 37b of Form CBT-100S.
Part III
Part II 1. Part III details and computes the applicable amounts
1. Nonoperational assets defined. Nonoperational of New Jersey Corporation Business Tax due on
assets are assets not acquired, managed, used,
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