Instructions For Form 1 - Massachusetts Resident Income Tax

2006 Form 1 — Schedule Instructions

Schedule E, Part II

Schedule E, Part III

Schedule C

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

“X” in the box to the left.

Income or Loss From Partnerships

Income or Loss From Grantor-Type

Substituting U.S. Schedules C

and S Corporations

Trusts and Non-Massachusetts

or C-EZ

Estates and Trusts

If you are substituting U.S. Schedule C or Schedule

Line 1. Partnership and

C-EZ for Massachusetts Schedule C and there are

S Corporation Income or Loss

Line 1. Estate and Trust Income

no differences between the amounts reported on

Enter your total partnership and S corporation in-

or Loss

U.S. Schedule C or Schedule C-EZ and amounts

come or loss from your U.S. Form 1040, Sched-

Enter your total estate and trust income or loss

that would be reported on Massachusetts Sched-

ule E, Part II, line 32.

from your U.S. Schedule E, Part III, line 37.

ule C, write “No Massachusetts Differences” on

the top of U.S. Schedule C or Schedule C-EZ.

Line 2. Massachusetts Differences

Enter and explain any differences between total

Profit or Loss from Business or

Enter and explain any differences between estate

partnership and S corporation income on the U.S.

and trust income or loss on the U.S. return and the

Profession

return and the same type of income on your Mass-

same type of income on your Massachusetts re-

Massachusetts Schedule C is provided to report in-

achusetts return. Explain the differences in the

turn. Explain the differences in the space provided

come and deductions from each business or pro-

space provided or enclose an additional sheet if

or enclose an additional sheet if necessary. See

fession operated as a sole proprietorship.

necessary. Refer back to Schedule E, Part I, line 2

explanation in Schedule E, Part I, line 2.

If your business deductions, excluding the Aban-

instructions for further guidance. If you use infor-

doned Building Renovation Deduction, exceed

Line 4. Abandoned Building

mation from Massachusetts Schedule 3K-1 and/or

Schedule C income and any other income taxable

SK-1, take care not to duplicate adjustments already

Renovation Deduction

at the 5.3% rate, such excess deductions may be

made for differences in U.S. and Massachusetts

Enter 10% of the costs of renovating a qualifying

subtracted from the other income that is effec-

tax treatments.

abandoned building in an Economic Opportunity

tively connected with the active conduct of your

Area. For further information, refer to the instruc-

Line 4. Abandoned Building

trade or business and any other income allowed

tions for Schedule E, Part I, line 4.

under IRC Section 469(d)(1)(B) to offset losses

Renovation Deduction

from passive activities. To compute the excess

Line 6. Estate or Nongrantor-Type

Enter 10% of the costs of renovating a qualifying

trade or business deductions use Massachusetts

abandoned building in an Economic Opportunity

Trust Income

Schedule C-2. This form is available by visiting

Area. For further information, refer to the instruc-

Enter estate or nongrantor-type trust income taxed

, or you may have one mailed

tions for Schedule E, Part I, line 4.

directly on your Massachusetts Fiduciary Return,

to you by calling (617) 887-MDOR.

Form 2, if included in line 5. If you do not know this

Line 6. Interest

(other than from

amount, check either your U.S. Schedule K-1 or

Registration Information

and Dividends

Massachusetts banks)

contact your trustee or other fiduciary.

In the space provided, describe the business or pro-

Enter interest (other than from Massachusetts

fessional activity that provided your principal source

Line 8. Interest

(other than from

banks) and dividends from trade or business ac-

of income reported on line 1. If you owned more

tivity(ies) if included in line 5 from partnerships

and Dividends

Massachusetts banks)

than one business, you must complete a separate

and S corporations. This income must be reported

Enter interest (other than from Massachusetts

Schedule C for each business. Give the general field

in Massachusetts Schedule B, line 3. This informa-

banks) and dividends if included in line 7 and enter

or activity and the type of product or service.

tion should be provided by the S corporation or

on Massachusetts Schedule B, line 3.

partnership.

Employer Identification Number

Line 9. Adjustment of 5.3% Income

You need an Employer Identification number (EIN)

Line 7. Interest from Massachusetts

Enter the total of interest from Massachusetts

only if you had a Keogh plan, were required to file

Banks

banks if included in line 7. This income must be re-

an employment, excise, estate, trust, or alcohol, to-

Enter interest from Massachusetts banks from

ported on Form 1, line 5a. Enter the total of pen-

bacco and firearms tax return or employ contract

trade or business activity(ies) if included in line 5.

sion and annuity income if included in line 7. This

labor. If you do not have an EIN, leave the line

This income must be reported on Form 1, line 5a.

income must be reported on Form 1, line 4.

blank. Do not enter your Social Security number.

This information should be provided by the S cor-

Line 11. Income or Loss from

poration or partnership.

Small Business Energy Exemption

Grantor-Type and Non-Massachusetts

If you are claiming the small business energy ex-

Line 8. Total Income or Loss from

Estates and Trusts

emption from the sales tax on purchases of tax-

Partnerships and S Corporations

able energy or heating fuel during 2006, you must

Subtract line 10 from line 7. Remember to subtract

Subtract the total of lines 6 and 7 from line 5. Re-

have five or fewer employees. You must enter the

losses when calculating the total. This figure should

member to subtract losses when calculating the

number of your employees in the space provided.

be added to any amount(s) in Schedule E, Part I,

total. This figure should be added to any amount(s)

line 5 and/or Part II, line 8 and the total entered on

in Schedule E, Part I, line 5 and/or Part III, line 11

Form 1, line 7.

and the total entered on Form 1, line 7.

Instructions For Form 1 - Massachusetts Resident Income Tax - 2006 Page 28

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