Instructions For Form 1 - Massachusetts Resident Income Tax

2006 Form 1 — Schedule Instructions

◗ Interest or dividends from a mutual fund, if such

Schedule DI

and pre-1996 installment sales, gains or losses

from the sale, exchange or involuntary conversion

distributions are not included in line 1 or line 2.

of property used in a trade or business, allowable

See line 6.

Dependent Information

deductions from your trade or business, carryover

Lines 5 and 6

Be sure to enclose with Form 1.

short-term losses from prior years, net long-term

Enter only amounts related to income that you

capital gains or losses, or excess exemptions.

You must complete this schedule if you are claim-

have already included in lines 1, 2, and 3.

◗ You must complete Massachusetts Schedule B

ing a dependent exemption(s) on Form 1, line 2b or

if your interest or dividend income includes: divi-

taking a deduction/credit(s) on Form 1, lines 12, 13

Line 5. Total Interest from

dends taxed directly to trusts or estates on a Mass-

or 38 (if applicable). Failure to provide this informa-

Massachusetts Banks

achusetts Fiduciary Return, Form 2; distributions

tion will delay the processing of your return. You

Enter the total interest included in Form 1, line 5a

that are returns of capital; or exempt portions of

must complete the information for each dependent.

(prior to the exemption amount being subtracted)

any interest or dividends from a mutual fund or

In the spaces provided, enter the name, Social Se-

only if it has been included in lines 1 or 3 of this

dividends from current earnings of a corporate

curity number, date of birth and the relationship

schedule.

trust that are taxed directly on a Massachusetts

of the dependent to you (son, daughter, mother,

Corporate Trust Return, Form 3F.

father, etc.). Also, if the dependent is a qualifying

Line 6. Other Interest and

child for the Earned Income credit, fill in the “Yes”

Dividends to Be Excluded

Part 1. Interest and Dividend Income

oval. If you are claiming more than four depen-

Enter the total interest and dividends from the fol-

Line 1. Total Interest Income

dents, attach a statement listing the name, Social

lowing sources (enclose an additional statement,

Security number, date of birth and the relationship

Enter your total interest income from your U.S.

if necessary):

of the dependent to you and if the dependent is a

Form 1040 or 1040A, lines 8a and 8b, or U.S.

◗ Interest on U.S. debt obligations. Enter interest

qualifying child for the Earned Income credit.

Form 1040EZ, line 2.

received on U.S. Treasury bills, notes and bonds,

savings bonds or other obligations of the United

Line 2. Total Ordinary Dividends

Schedule B

States, including its territories or dependencies.

Enter your total ordinary dividends from your U.S.

Such interest is tax-exempt in Massachusetts. For

Schedule B, Part II, line 6 (Form 1040) or U.S.

Note: If showing a loss, be sure to mark over the

further information concerning exempt obliga-

Schedule 1, Part II, line 6 (Form 1040A). If you did

“X” in the box to the left.

tions of the United States, see TIR 89-8;

not file U.S. Schedule B or U.S. Schedule 1, enter

◗ Interest and dividends taxed directly to Mass-

Interest, Dividends and Certain

the amount from U.S. Form 1040 or 1040A, line 9a.

achusetts estates and trusts. Enter the interest and

Capital Gains and Losses

dividends that are taxed directly to a Massachu-

Line 3. Other Interest and

You must file Massachusetts Schedule B if you had:

setts estate or trust (reportable on a Massachu-

Dividends

◗ dividend income in excess of $1,500;

setts Fiduciary Return, Form 2);

◗ any interest income other than from Mass-

Enter the following amounts and their sources

◗ Any distribution which is a return of capital in-

(enclose additional statement if more space is

achusetts banks taxed at 5.3%;

cluded in total gross dividends, line 2;

◗ short-term capital gains or losses;

necessary):

◗ Any interest or dividends from obligations of the

◗ Interest from obligations of other states and their

◗ carryover short-term losses from prior years;

Commonwealth of Massachusetts or its political

◗ long-term gains on collectibles and pre-1996

political subdivisions (including your share, if any,

subdivisions held by you;

from a partnership, an S corporation and a grantor-

installment sales classified as capital gain income

◗ Any exempt portion of interest or dividends

type trust or non-Massachusetts trust). Do not in-

for Massachusetts purposes;

from a mutual fund included in lines 1, 2 or 3 of

◗ gains or losses from the sale, exchange or in-

clude exempt interest already included in line 1;

this schedule. Enter only the exempt portion of in-

◗ Taxable distributions from Massachusetts S cor-

voluntary conversion of property used in a trade

terest or dividends derived from obligations of the

porations not reported in Schedule B, line 2. Dis-

or business;

U.S. government or the Commonwealth of Mass-

◗ net long-term capital gains and losses; or

tributions in excess of the Massachusetts accu-

achusetts or its political subdivisions;

◗ excess exemptions.

mulated adjustments account are dividends to the

◗ Any dividends from current earnings of a corpo-

extent of the corporation’s Massachusetts accumu-

rate trust only if such entity is taxed directly on a

Collectibles are defined as any capital asset that is a

lated earnings and profits. For more information,

Massachusetts Corporate Trust Return, Massachu-

collectible within the meaning of Internal Revenue

see Regulation 830 CMR 62.17A.1;

setts Form 3F; or

Code section 408(m), as amended and in effect for

◗ Interest and dividends from a partnership, S

◗ Any interest on pre-retirement distributions from

the taxable year, including works of art, rugs, an-

corporation, grantor-type trust, or non-Massachu-

state and municipal contributory pension plans.

tiques, metals, gems, stamps, alcoholic beverages,

setts estate or trust from Massachusetts Schedule

certain coins, and any other items treated as col-

Do not enter in line 6 either of the following:

E. Generally, portfolio interest and dividend income

◗ Dividends from the earnings and profits accu-

lectibles for federal tax purposes.

from partnerships and S corporations should al-

mulated prior to January 1, 1971 by any corporate

◗ You need not file Massachusetts Schedule B if all

ready be included in the Schedule B, line 1 and line

trust which was not taxed directly by Massachu-

interest income you had was from Massachusetts

2 amounts;

setts in prior years, even though such an entity is

◗ Interest from a trade or business that is reported

banks (reportable in Form 1, line 5a), and your

taxed directly now (obtain from the entity the tax-

gross dividend income was $1,500 or less (divi-

on Massachusetts Schedule C, line 32; or

able status of dividends paid to you); or

dend income of $1,500 or less is reportable on

Form 1, line 20), and you have no short-term cap-

ital gains or losses, long-term gains on collectibles

Instructions For Form 1 - Massachusetts Resident Income Tax - 2006 Page 23

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