Form Ct-1065 - Connecticut Partnership Income Tax Return And Instructions

Line 9 - Special Depreciation Allowance for Qualified

S U B T R A C T I O N S

Property Placed in Service During the Preceding

Enter the amount of each partner's distributive share as

Year

a positive number.

Enter 25% of the distributive share entered for each

Line 6 - Interest on U.S. Government Obligations

partner on Line 4 of the 2002 Form CT-1065, Schedule D.

The remaining 75% of such distributive share will be

Enter the amount of each partner's distributive share of

entered (in three equal 25% installments) on the

interest income derived from U.S. government

comparable line of the 2004, 2005, and 2006 Form

obligations (to the extent included in income on federal

CT-1065.

Form 1065) that federal law prohibits states from

taxing. For example, U.S. government bond interest

Line 10 - Other

such as Savings Bonds Series EE and Series HH, and

Use Line 10 to report the amount of each partner's

U.S. Treasury bills and notes.

distributive share of modifications to income which are

not listed on Lines 6, 7, or 8. For example, include the

Do not enter the amount of income derived from Federal

amount of each partner's distributive share of:

National Mortgage Association (Fannie Mae) bonds,

Government National Mortgage Association (Ginnie Mae)

•

Any gain recognized on the sale or exchange

bonds, and Federal Home Loan Mortgage Corporation

of bonds or other obligations issued by the

(Freddie Mac) securities. Federal law does not prohibit

State of Connecticut or its municipalities;

states from taxing income derived from these obligations

•

Interest income from federally taxable

and this income is taxed by Connecticut.

Connecticut bonds;

Line 7 - Exempt Dividends From Certain Qualifying

•

The partnership's share of any negative

Mutual Funds Derived From U.S. Government

Connecticut fiduciary adjustment received

Obligations

from a trust or estate of which the partnership

Enter the amount of each partner's distributive share of

is a beneficiary;

exempt dividends that are received from a qualifying

•

Any refund or credit for overpayment of

mutual fund and that are derived from U.S. government

income taxes imposed by any state of the U. S.

obligations. A mutual fund is a qualifying mutual fund

or a political subdivision thereof, or the District

if, at the close of each quarter of its taxable year, at

of Columbia, to the extent such amount was

least 50% of the value of its assets consists of U.S.

included in federal adjusted gross income;

government obligations. The percentage of dividends

•

Business expenses incurred in connection with

that are exempt dividends should be reported to the

the income, or property held to produce

partnership by the mutual fund.

income, that is subject to Connecticut income

Do not enter the amount of income derived from Federal

tax but exempt from federal income tax

National Mortgage Association (Fannie Mae) bonds,

(provided these expenses were not deducted in

Government National Mortgage Association (Ginnie Mae)

determining partnership income); or

bonds, and Federal Home Loan Mortgage Corporation

•

Amortization of bond premium on any bond,

(Freddie Mac) securities. Federal law does not prohibit

the interest from which is subject to

states from taxing income derived from these obligations

Connecticut income tax but exempt from

and this income is taxed by Connecticut.

federal income tax (provided this amortization

was a business expense for the taxable year

For more information including lists of exempt and taxable

and was not deducted in determining

obligations, see Policy Statement 2003(6), Connecticut

partnership income).

Income Tax on Bonds or Obligations Issued by the United

States Government, by State Governments, or

The partnership must provide each partner

Municipalities.

(including a partner other than an individual) with

a schedule of amounts of modifications to include

Line 8 - Certain Expenses Relating to Income

on the appropriate forms.

Exempt From Federal Income Tax

Enter the amount of each partner's distributive share of

interest expense on money borrowed to purchase or

carry bonds or securities whose interest income is

subject to Connecticut income tax, but exempt from

federal income tax, provided this interest was a business

expense for the taxable year and was not deducted in

determining partnership income on federal Form 1065.

Page 13

Form Ct-1065 - Connecticut Partnership Income Tax Return And Instructions - 2003 Page 13

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