Virginia Tax Commissioner Determines Pass-Through Entity’s Withholding Requirements Towards Nonresident IRA Owners

The Virginia Tax Commissioner July 21 determined a pass-through entity’s (PTE) withholding tax requirements regarding nonresidents whose ownership interests were held in Individual Retirement Accounts (IRAs), for corporate income and individual income tax purposes. The PTE had income allocable to Virginia after selling rental real estate. Some of the PTE owners resided outside of Virginia. The PTE sought a ruling as to whether tax must be withheld from the nonresident owners whose interests were held by an IRA. The commissioner found that because the determination as to whether an IRA was considered to have unrelated business taxable income was a ...