(1) Any entity that elected under IRC 761, on or before December 31, 2002, to be excluded from application of some or all of the partnership tax rules 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 entity that has Montana source income, that elects under IRC 761 to be excluded from application of some or all of the partnership tax rules on or after January 1, 2003, must file a Montana Form DER-1 on or before 90 days after the date it makes the election.

(3) A disregarded entity 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 social security or federal identification number of each partner, member, or other owner;

(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 disregarded entity 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) if the disregarded entity is a limited liability company, limited liability partnership, limited partnership, or any other unincorporated entity formed under the laws of Montana or any other state or country, the state, county, and date of formation.

(4) Any entity 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 761 election is changed or revoked for federal tax purposes;

(b) any capital or profit interest of any partner, member, or other owner is transferred, liquidated, 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.