(1) Any corporation described in IRC 1361(b) (3) , for which an election to treat the corporation as a qualified subchapter S subsidiary was made on or before December 31, 2002, and that on or after January 1, 2003, is either engaged in a trade, business, or occupation in the state, or owns real or tangible personal property located in the state, must file a Montana Disregarded Entity Information Return, Form DER-1, on or before August 31, 2003.

(2) Any corporation described in IRC 1361(b) (3) whose parent elects to treat as a qualified subchapter S subsidiary on or after January 1, 2003, and that has Montana source income, must file a Montana Form DER-1, on or before 90 days after the election is made.

(3) A corporation required to file the information returns provided in (1) and (2) is subject to a late-filing penalty if:

(a) the Montana disregarded entity information return is not filed by the due date (including extensions) ; or

(b) a return is filed that does not include all of the following information:

(i) name, address, and federal identification number of its S corporation parent;

(ii) the date of the election and the internal revenue district (or service center serving the district) where the election was filed;

(iii) any assumed business name(s) the qualified subchapter S subsidiary has registered with the Montana secretary of state, under which it conducts any trade, business, or occupation in the state, or under which it holds title to any real or tangible personal property in the state; and

(iv) the state, country, and date of its incorporation.

(4) Any corporation required in (1) or (2) to file an information return must file a Montana Form DER-1, within 90 days of the date:

(a) its qualified subchapter S subsidiary status is changed or revoked for federal tax purposes;

(b) its stock is transferred or redeemed;

(c) it is dissolved, liquidated, merged, or consolidated with another entity;

(d) it sells substantially all its assets; and

(e) it files an application for a certificate of withdrawal with the Montana secretary of state.