Instructions For 2003 Vermont Fiduciary Return Of Income (Page 2 of 3) in pdf

and Vermont, other than those allowed by state law, are

dividend income for Federal income tax is not available for

identified and may result in an audit.

Vermont income tax.

NET OPERATING LOSSES - The VT carryback or

Line 4b: Capital Gains Deduction from VT Fiduciary

carryforward election for a net operating loss must be the

Taxable Income available only for capital gains. If Federal

same as elected for Federal purposes. NOTE: There is no

Schedule D, Part V or the Federal Tax Worksheet is used to

VT refund available for a carryback.

calculate the federal tax liability AND if you did not file

Federal Form 4952, refer to the following line numbers for

LINE BY LINE INSTRUCTIONS

the amount to enter on Line 4b:

Line 1: Enter the taxable income amount from Federal Form

Schedule D, Part V: Line 19

1041, Line 22. For Qualified Settlement Funds, enter the

amount from Federal Form 1120-SF, Line 14.

Schedule D, Tax Worksheet: Line 7

Line 2: Enter income from non-Vermont state and local

If you used Federal Schedule D Tax Worksheet for

obligations. If interest income was received from a mutual

unrecaptured section 1250 gain (25%) or 28% gain, OR if

fund that has a portion of its assets invested in Vermont

you filed Federal Form 4952, you must complete this

municipal bonds, go to Schedule A to determine the portion

worksheet.

of income subject to Vermont tax.

CAPITAL GAINS WORKSHEET

Line 4a: Interest income from U.S. government obligations

Lines A-C, enter amounts from Federal Schedule D.

such as U.S. Treasury Bonds, Bills and Notes, is exempt

A. Smaller of Line 15a or 16a. . . . . . . . . . . . . . . . . . A. ____________

from Vermont tax under the laws of the United States.

B. Line 15d __________________

Interest income is exempt when received directly from the

C. Line 15e __________________

U.S. Treasury or from a trust, partnership or mutual fund

D. Add Lines B and C. If negative, enter zero . . . . D. ____________

that invests in direct obligations of the U.S. government.

E. Subtract Line D from Line A . . . . . . . . . . . . . . . . . E. ____________

However, income from the sale of U.S. government

obligations is taxable in Vermont. Income from repurchase

Lines F, G, I, and J, enter amounts from Federal Form 4952. If you did not file

agreements, securities of FNMA or GNMA or other

Form 4952, enter amount from Line E on Line M.

investments that are not direct obligations of the U.S.

F. Line 4g ___________________

government are also taxable.

G. Line 4e ___________________

Supporting Documentation Required For $2,000.00 or less

H. Multiply Line F by Line G . . . . . . . . . . . . . . . . . . . H. ____________

in U.S. government interest, no attachment is required.

I. Line 4b ___________________

However, acceptable statements should be obtained for the

J. Line 4e ___________________

taxpayer’s records in the event the Department requests such

K. Add Lines I and J . . . . . . . . . . . . . . . . . . . . . . . . . . K. ____________

documentation.

L. Divide Line H by Line K. . . . . . . . . . . . . . . . . . . . . L. ____________

For over $2,000.00 in U.S. government interest income,

M. Subtract Line L from Line E.

attach a listing/statement showing the source of U.S.

Also enter on Form FI-161, Line 4b . . . . . . . . . . M. ____________

government interest income and the percentage from each

Line 5: Subtract Line 4c from Line 3. This is the amount

source. Summary information from a K-1, or just a statement

of Vermont taxable income.

“U.S. government securities” without further identification

is not acceptable.

Line 6: Go to Schedule B to compute the tax on Vermont

taxable income. Enter the total tax amount from Line 23 or

NOTE: If U.S. interest is distributed on Line 18 of the

Line 25.

Federal 1041, the deduction is lost.

Line 7: Most taxpayers should enter 100% on this line.

Dividends - Dividends are considered ordinary income for

However, a nonresident or part-year resident estate or trust

Vermont tax purposes. The capital gains treatment of

should first complete Schedule E and then Schedule C to

determine the income adjustment.

Vermont 2003 Tax Rate Schedule

Line 9: Vermont resident or qualified part-year resident

estates and trusts that incurred and paid an income tax to

If Taxable

of the

Income

But

the Vermont

amount

another state(s) or province(s) of Canada during Vermont

is Over

Not Over

Tax is

over

residency and had that same income taxed as resident

$1,900

3.6%

Vermont income, are entitled to a credit against the Vermont

$1,900

$4,500

$68.00 + 7.2%

$1,900

tax. The income tax paid to another state or Canadian

$4,500

$6,850

$256.00 + 8.5%

$4,500

province is the amount of tax, not the amount of income tax

$6,850

$9,350

$455.00 + 9.0%

$6,850

withheld from payments. Complete Schedule D. Attach a

$9,350

---

$680.00 + 9.5%

$9,350

copy of the other state or provincial nonresident return(s) to

Instructions For 2003 Vermont Fiduciary Return Of Income Page 2

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