Instructions For The Special Partnership Informative Income Tax Return Form 480.10(E) (Page 5 of 9) in pdf

Instructions Form 480.10(E)

To claim this credit, a certification from the

To determine the built - in gain tax, use Schedule U.

Educational Foundation or copy of the

cancelled check must be submitted as evidence

PART V - GROSS PROFIT ON SALES,

of the contribution made.

MANUFACTURE OR OTHER INCOME

Line 6 - Credit for the purchase of tax credits

Enter manufacturing and sales costs, and gross

profit from sales. Check the applicable box to indicate

The partners of a special partnership will have the

your inventory appraisal method at the beginning

right to claim their distributable share on tax credits

and end of the year.

acquired by the special partnership through the

purchase, exchange or transfer from investors that

Itemize in Part VII of the return the other direct

generate credits under any of the acts that allow

costs shown on line 5. Note that the flexible

tax credits. The special partnership, as the buyer

depreciation of assets used in manufacture will

of the credits and the partners, are subject to the

be included as Other Direct Costs in Part VII,

limitations imposed to the investor from whom the

line 11. The flexible depreciation of assets, other

credit was acquired with respect to the taxable years

than manufacturing, must be entered in Part VI,

on which those credits were considered, and the

line 35.

maximum amount of the credits to be claimed on

each taxable year.

Enter on line 13 the gains or losses from the

distributable share of the partnership in other

To claim this credit, the conveyor and the cessionary

special partnerships.

will submit with the return in the year of the cession,

a sworn statement notifying the same to the

PART VI - DEDUCTIONS AND NET OPERATING

Secretary.

INCOME

Line 7 – Other credits not included on the

The income and expenses to be included in Parts V,

preceding lines

VI and VII of the return are related with the activities

of the special partnership not covered under acts that

Enter the total amount of other credits not included

provide for partially exempt income. The detail of

on the preceding lines. If on this line you included

partially exempt income will be detailed on Schedule

credits from different concepts, you must submit a

L (SP, IC, ESC).

schedule showing a breakdown of such credits. You

must also submit documents or evidences to

Enter the deductions related to your operations on

support such credits.

lines 16 through 41. Information is provided regarding

some of those deductions.

PART IV - TAX COMPUTATION ON BUILT - IN

Line 16 - Compensation to partners or officers

GAIN

Enter the total compensation paid or accrued to all

The tax on built - in gains applies to every special

partners of the special partnership. Payments for

partnership that previously was a partnership or a

services rendered or as interest from the use of

regular corporation. The tax is imposed when the

capital, will be considered as paid to one that is

sale or disposition of the assets acquired through

not a partner of the special partnership, as long as

the conversion, is realized in the period of 10 years

said interest are determined without considering

from the first day of the first taxable year of the

the special partnership income. On the other hand,

special partnership.

the partner will recognized said payments as

taxable income according to the accounting

The increase of the value accumulated during the

method used to recognize income. Detail the

period after the conversion, that the special

corresponding information in Part VIII.

partnership realize as gain when disposing the

asset, is not subject to this tax.

Line 27 - Other taxes, patents and licenses

The built - in gain is taxable under the maximum

Submit a schedule of the excise taxes or licenses

applicable tax rate (39% to corporations), except

paid by the special partnership.

those corporations under the Tourism Development

Act of 1993 and Act 78 of 1993, which maximum

Line 30 - Meal and entertainment expenses

tax rate is 42%. See Section 1342(c) of the Code.

You may deduct 50% of the expenses actually paid

or incurred, up to 25% of the gross income of the

taxable year, for meal and entertainment expenses

directly related with the industry or for the production

of income.

Instructions For The Special Partnership Informative Income Tax Return Form 480.10(E) Page 5

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