Georgia Form 501 - Fiduciary Income Tax Return Page 5
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501
Page 5
Georgia Form
NEW INFORMATION
Fiduciary Income Tax Return
Federal Tax Changes
•5 year carryback of NOLs incurred in the Kansas disaster area after
The Governor signed House Bill 729 into law.Consequently, for
May 3, 2007, I.R.C. Section 1400N(k).
taxable years beginning on or after January 1, 2011, with exceptions
•5 year carryback of certain disaster losses, I.R.C. Sections
discussed below, Georgia has adopted the provisions of all federal
172(b)(1)(J) and 172(j).
acts (as they relate to the computation of federal adjusted gross
•The election to deduct public utility property losses attributable to
income (AGI) or federal taxable income for non-individuals) that
May 4, 2007 Kansas storms and tornadoes in the fifth tax year before
were enacted on or before January 1, 2012. For 2011,
the I.R.C.
the year of the loss, I.R.C. Section 1400N(o).
Section 179 deduction is $250,000 and the related phase out is
•Special rules relating to a financial institution being able to use
$800,000. Georgia has not adopted the Section 179 deduction
ordinary gain or loss treatment for the sale or exchange of certain
forcertain real property.
preferred stock after Dec. 31, 2007, I.R.C. Section 1221.
•Temporary tax relief provisions relating to the Midwestern disaster
Exceptions
Georgia has Not adopted I.R.C. Section 168(k) (the 30%, 50% and
area, I.R.C. Sections 1400N(f) and 1400N(k).
100% bonus depreciation rules) except for I.R.C. Section
168(k)(2)(A)(i) (the definition of qualified property), I.R.C. Section
Depreciation Differences. Depreciation differences due to the Fed-
168(k)(2)(D)(i) (exceptions to the definition of qualified property), and
eral acts mentioned above should be treated as follows (If the tax-
I.R.C. Section 168(k)(2)(E) (special rules for qualified property) and
payer has depreciation differences from more than one Federal act,
Georgia has not adopted I.R.C. Section 199 (federal deduction for
it is not necessary to make a separate adjustment for each act):
income attributable to domestic production activities).
A. Depreciation must be computed one way for Federal purposes
Georgia has also not adopted the following:
and another way for Georgia purposes. To compute depreciation for
•The exclusion of $2,400 of unemployment income for 2009, I.R.C.
Federal purposes, taxpayers should use the current year IRS Form
Section 85(c).
4562 and attach it to the Georgia return. This should be entered on
•Additional itemized deduction for the sales tax on the purchase of a
the other addition line of the return.
new vehicle in 2009, I.R.C. Sections 164(a)(6) and 164(b)(6). Please
B. Depreciation must also be computed for Georgia purposes.
note: Georgia also does not allow the increased standard deduction
Taxpayers should use Georgia Form 4562 to compute depreciation
for sales tax on the purchase of a new vehicle in 2009 because
for Georgia purposes and attach it to the Georgia return. This should
Georgia has its own standard deduction.
be entered on the other subtraction line of the return.
•The election to increase the normal two year net operating loss
Federal deduction for income attributable to domestic production
carryback to 3, 4, or 5 years for tax years 2008 and 2009, I.R.C.
Sections 172(b)(1)(H) and 810(b)(4).
activities (IRC Section 199). This adjustment should be entered on
•The transition rule that would allow a taxpayer to revoke a prior
the addition line of the applicable return. An adjustment to the Geor-
election to forego the net operating loss carryback period.
gia partnership or S Corporation return is not required if the partner-
•Deferral of debt income from reacquisitions of business debt at a
ship or S Corporation is not allowed the Section 199 deduction di-
discount in 2009 and 2010; federally deferred for up to five years,
rectly, but instead passes through the information, needed to com-
then included ratably over five years, I.R.C. Section 108(i).
pute the deduction, to the partners or shareholders.
•Modified rules for high yield original issue discount obligations,
I.R.C. Sections 163(e)(5)(F) and 163(i)(1).
Other Differences. Other differences should be placed on the other
•New York Liberty Zone Benefits, I.R.C. Section 1400L.
addition or subtraction line of the applicable return. Attach a state-
•50% first year depreciation for post 8/28/2006 Gulf Opportunity Zone
ment to the return explaining these differences.
property, I.R.C. Section 1400N(d)(1).
Additionally, the provisions listed above may have an indirect effect
•50% bonus depreciation for most tangible property and computer
on the calculation of Georgia taxable income.
software bought after May 4, 2007 and placed in service in the Kan-
Adjustments for the items listed below should be added or sub-
sas Disaster Area, I.R.C. Section 1400N(d)(1).
tracted on your Georgia income tax form.
•50% bonus depreciation for “qualified reuse and recycling prop-
1. When property is sold for which the bonus depreciation was
erty”, I.R.C. Section 168(m).
claimed, there will be a difference in the gain or loss on the sale of
•50% bonus depreciation in connection with disasters federally de-
the property.
clared after 2007, I.R.C. Section 168(n).
2. The depreciation adjustment may be different if the taxpayer is
•Increased ($8,000) first-year depreciation limit for passenger auto-
subject to the passive loss rules and is not able to claim the addi-
mobiles if the passenger automobile is “qualified property,” I.R.C.
tional depreciation on the Federal return.
Section 168(k).
3. Other Federal items that are computed based on federal adjusted
•15 year straight-line cost recovery period for certain improvements
gross income or federal taxable income will have to be recomputed
to retail space, I.R.C. Sections 168(e)(3)(E)(ix), 168(e)(8), and
if the provisions of the Federal Acts are claimed.
168(b)(3)(I).
•Modified rules relating to the 15 year straight-line cost recovery for
Furthermore, in 2003 the IRS started requiring separate reporting, to
qualified restaurant property (allowing buildings to now be included),
shareholders of S Corporations and partners of partnerships, for
I.R.C. Section 168(e)(7).
the gain from asset sales for which an I.R.C. Section 179 deduction
•5 year depreciation life for most new farming machinery and equip-
was claimed. Georgia follows the separate reporting treatment of
ment, I.R.C. Section 168(e)(3)(B)(vii).
the gain and the Section 179 deduction. Accordingly, the gain should
•Special rules relating to Gulf Opportunity Zone public utility casualty
not be reported directly on the S Corporation or partnership return,
losses, I.R.C. Section 1400N(j).
but the gain, along with any Georgia adjustment to the gain (due to
•5 year carryback of NOLs attributable to Gulf Opportunity Zone losses,
the Federal acts), should be reported separately to the sharehold-
I.R.C. Section 1400N(k).
ers or partners.
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