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processing of the return and a delay in a refund. Additionally, the The term “compensation” means wages, salaries, commissions
DOR may deny interest on a refund claimed on a return that was and any other form of remuneration paid directly to employees for
not processible. personal services. Payments made to an independent contractor,
or to any person not properly classified as an employee, are
The numerator values on lines 1, 5, and 9 must be listed by excluded.
corporation, net of intercompany eliminations. Do not list an
“elimination company.” If lines 1, 5, and 9 are improperly completed Sales Factor: See 15 AAC 19.251 – 302.
regarding eliminations, this may result in a tax adjustment. The sales factor is a fraction, the numerator of which is the gross
receipts derived during the tax year from transactions and activities
If the taxpayer does business only in Alaska, enter “1.000000” on attributable to Alaska in the regular course of the taxpayer’s trade
line 14. If the taxpayer has business activity both within and outside or business. The denominator is the total gross receipts derived
of Alaska, then Schedule I must be fully completed. Note that the during the tax year from transactions and activities in the regular
list of taxpayers listed on lines 1, 5, or 9 must match the list of course of the corporation’s trade or business.
taxpayers listed on Schedule B, plus the taxpayer named on page
1 of the tax return. The only exceptions are corporations claiming Schedule J – Alaska Capital and Section 1231 Gains
exemption under P.L. 86-272, or Alaska insurance companies. and Losses
If the taxpayer is a “disregarded entity” under federal law, then that Schedule J is used to calculate the taxpayer’s Alaska net capital
entity is disregarded for Alaska purposes. On Schedule I, list the gain. Gains and losses are measured after allocation and
name and EIN of the owner of that disregarded entity. apportionment. Enter the taxpayer’s current gains and losses,
before any federal limitations, according to their character.
If a corporation owns an interest in a partnership that conducts Corporations that conduct business both within and without Alaska
business in Alaska, then the partnership’s apportionment factors enter total gains and losses on lines 1, 5, and 11 and enter non-
(property, sales, and payroll) are attributed to that corporate business capital gain or loss on lines 6 and 12 as appropriate.
partner. On Schedule I, report the corporation’s property, payroll, Enter the portion of non-business gain or loss that is allocable to
and sales, including its share of partnership factors. Do not list the Alaska on lines 8 and 14, as appropriate. Taxpayers using the
name or EIN of the partnership on lines 1, 5, or 9. combined method of reporting should report the gains and losses
of the entire combined group.
Taxpayers using the combined method of reporting are required to
include a schedule of the calculation of the apportionment formula Note: If you are filing an amended return, Schedule J must be fully
in columnar format disclosing for each corporation the total completed, based on information from federal Schedule D (without
property, payroll, and sales and the amount of Alaska property, regard to federal capital loss carryovers or carrybacks) and Form
payroll, and sales. 4797. Do not report amounts net of federal capital loss carryovers
or carrybacks.
All factor calculations (lines 4, 8, 12, and 14) must be rounded to
the sixth decimal place. If both the numerator and denominator (for Line 1: Enter in column A the current Section 1231 gains and
a particular factor) are zero, disregard that factor and divide line 13 (losses) from federal Form 4797, line 7 attributable to the combined
by the remaining number of factors and enter the result on line 14. group. Do not use the amount from Form 4797, line 17, which
includes ordinary gains and losses.
Property Factor: See 15 AAC 19.141 – 202.
The property factor is a fraction, the numerator of which is the value Line 2: The taxpayer’s Alaska non-recaptured net Section 1231
of real and tangible personal property owned or rented and used losses are based on the apportioned Section 1231 gains and
within Alaska during the tax year to produce business income. The losses in prior years and may not correspond to the taxpayer’s
denominator is the value of all real and tangible personal property federal non-recaptured net Section 1231 losses.
owned or rented and used to generate business income. Rents do
not include royalties or amounts paid for services or supplies in Line 5: Enter the amount from federal Schedule D, the sum of
connection with rented property. lines 1–5 attributable to the combined group. Do not use line 7
which includes federal unused capital loss carryover. (See line 9
Property used in the production of non-business income is not instructions below to report Alaska unused capital losses.)
included in the factor. Construction in progress is not included in
the factor. Line 9: Enter on line 9 the Alaska excess capital loss to be utilized
in the current year. The Alaska excess capital loss is the taxpayer’s
Owned property is valued at its original cost averaged over the allocated and apportioned net capital losses from prior years.
tax year. In general, original cost is the unadjusted basis for Enter in the first space on line 9 the amount from Form 6385 Tax
federal income tax purposes at the time of acquisition adjusted by Attribute Carryovers, line 12. Do not enter the taxpayer’s federal
subsequent additions, improvements, or partial dispositions. The capital loss carryover from federal Schedule D.
average value of owned property is computed by averaging the
property values at the beginning and end of the tax year. Rented Special capital loss carryback notes: If this is an amended
property is valued at eight times the annual rents paid. return filed to claim a capital loss carryback, enter the amount of
carryback to be utilized in the current year, in the space provided
Payroll Factor: See 15 AAC 19.211 – 241. on line 9. This generally comes from Form 6385, line 16. Note that
The payroll factor is a fraction, the numerator of which is the a capital loss carryback cannot create or increase a current net
compensation paid within Alaska during the tax year to produce operating loss. This may require an iterative process to calculate
business income. The denominator is the total compensation paid the allowable capital loss carryback. In this situation, you would
during the tax year to produce business income. prepare the return with the following steps:
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