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Line instructions for Form CT-3-ATT

CT-3/4-I (2006) Page 23 of 29

that case, allocate this interest by the business allocation percentage and

Lines 17 and 18

include as part of business income.

Complete lines 17 and 18 if you have investment capital includable on line 7,

column C. Otherwise, enter 0 on lines 17 and 18. Use the worksheets below

Line 10 — Enter interest income from debt instruments deemed cash,

and on page 28 before completing these lines.

including certificates of deposit, if included on line 6.

Line 17 — Enter the amount of interest deductions that are indirectly

Line 11 — Enter dividend income received from investment capital listed

attributable to investment capital, or to income, gains, or losses from

in Schedule B, Part 1, Section 2, column A, or dividend income received

investment capital, from Line 17 worksheet, line N, below.

from money market mutual funds included as cash on line 6, to the extent

included in ENI. Include the following:

If you completed the Line 5a worksheet on page 12, skip lines A through I

— 50% of dividends received from money market mutual funds included

on the Line 17 worksheet, and enter on line J the amount from the Line 5a

as cash on line 6. (Fifty percent of these dividends were deducted on

worksheet, line J.

Form CT-3, line 11).

— 50% of dividends received from nonsubsidiary stock which meets the

holding requirements of IRC section 246(c). (Fifty percent of these

dividends were deducted on Form CT-3, line 11).

Line 17 worksheet

— 50% of subpart F income constituting dividends received from a

Interest deductions indirectly attributable

controlled foreign corporation in which you own 50% or less of the

to investment capital

voting stock (see federal Form 1120, Schedule C, line 14). For more

information, see TSB-A-87(23.1)C, American International Group, Inc.

A. Enter federal interest deductions included on

— 100% of dividends received from nonsubsidiary stock that did not meet

federal Form 1120, line 18 ...................................... A.

the holding requirements of IRC section 246(c).

B. Enter amounts of interest deductions included on

Line 12 — Enter any net capital gains or losses from the sale and exchange

line A that must be added back to FTI in

of securities constituting investment capital that were used in computing FTI.

computing ENI (other than the amounts on

Form CT-3, lines 4a and 5a); for example,

Line 13 — Other items of investment income include but are not limited to,

interest deductions taken in computing an

premium income from an unexercised covered call option, if the item that

amount included on Form CT-3, line 15.

covers the call is an asset constituting investment capital.

Enter the Form CT-3 line numbers and amounts

Lines 15 through 18

below:

Refer to TSB-M-95(2)C, Attribution of Noninterest Deductions, for

Line #

Amount

information about lines 15 through 18.

Line #

Amount

Complete lines 15 and 16 if you have investment capital includable on

Line #

Amount

Total B.

Form CT-3-ATT, line 7, column C (otherwise, enter 0 on lines 15 and 16).

C. Balance

............................ C.

(subtract line B from line A)

Line 15 — Enter the amount of interest deductions allowable in the

computation of ENI (that is, includable in the amount on Line 17 worksheet,

D. Enter amounts of interest deductions that must

line E, below) that are directly attributable to investment capital (or to

be subtracted from FTI in computing ENI: for

income, losses, or gains from investment capital).

example, the interest deductions taken

in computing the amount on Form CT-3, line 2, or

Line 16 — Enter the amount of noninterest deductions allowed in the

amounts related to foreign source income not

computation of ENI (that is, includable in the amount on Line 18 worksheet,

included on federal Form 1120.

line E, on page 28) that are directly attributable to investment capital (or to

income, losses, or gains from investment capital).

Enter the Form CT-3 line number and amounts

below:

The direct attribution of deductions is based on an analysis of the facts

Line #

Amount

and circumstances. Deductions directly attributable to investment capital or

income include but are not limited to the following:

Line #

Amount

— interest on debt incurred to buy investment capital

Line #

Amount

Total D.

— safe deposit box rentals

E. Total New York State interest deductions included

— financial news subscriptions

in ENI (

.......................................... E.

add lines C and D)

— salaries of employees engaged in the management and conservation of

F. Enter any interest deductions directly attributable

stocks, bonds, and other securities included in investment capital

to subsidiary capital included on Form CT-3,

— investment counsel fees

line 4a ...................................................................... F.

— custodian fees

G. Enter any interest deductions directly attributable

— the cost of insurance and fidelity bonds covering investment capital

to investment capital included on Form CT-3-ATT,

— expenses for legal advice relating to the acquisition of investment capital

line 15 ..................................................................... G.

Do not include on lines 15 or 16 interest deductions or noninterest

H. Enter any interest deductions directly attributable

deductions that are directly attributable to:

to business capital .................................................. H.

— Subsidiary capital (or income, losses, or gains from subsidiary capital);

see Form CT-3, lines 4a and 4b.

I. Subtotal

.................................. I.

(add lines F, G, and H)

— Business capital (or income, losses, or gains from business capital).

J. Interest deductions subject to indirect attribution

Note: For tax years beginning in 1995 or after, certain expenses may,

........................................... J.

(subtract line I from line E)

at the taxpayer’s election, be deemed to be directly attributable to

K. Enter the amount from Form CT-3-ATT, line 7,

business capital (or income, losses, or gains from business capital).

column C ................................................................. K.

These expenses include, among others: depletion; advertising;

research and development expenses; compensation packages of chief

L. Enter the amount from Form CT-3, line 30,

executive officer, chief financial officer, and chief operating officer;

column C ................................................................. L.

charitable contributions; and internal auditing expenses. For a complete

listing of deductions so deemed attributable to business capital, see

M. Percentage

............................. M.

(divide line K by line L)

section III(A)(1) of TSB-M-95(2)C.

N. Amount of interest deductions indirectly

If at least 95% of the noninterest deductions of an operating division or

attributable to investment capital

(multiply line J by

corporation are directly attributable to a particular class of capital or income,

....... N.

line M; enter this amount on Form CT-3-ATT, line 17)

100% of the noninterest deductions of that division or corporation may

be directly attributed to that class of capital or income. For details, see

TSB-M-95(2)C, section IV.

Form Ct-3/4-I - Instructions For Forms Ct-4, Ct-3, And Ct-3-Att - General Business Corporation Franchise Tax Returns - 2006 Page 9

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