Iowa Corporation Income Tax Instructions - 2014 (Page 7 of 7) in pdf

allocable to Iowa.

Worksheet exceeds line 3 of federal form 4626

(2)

Other interest, net dividends, capital and

by 75% and enter on line 6 of IA 4626.

ordinary

gains,

and

royalties

from

Line 12: The net operating loss entered here

intangibles must be included in the

must be reduced by the amount of the items of

numerator if the commercial domicile is

tax preferences and adjustments arising in the

in Iowa. See Iowa rule 701—54.2(3) for

year of the net operating loss. The deduction

attributing certain income from intangibles.

for a net operating loss applied to the current

(3)

Capital and ordinary gains, rent, and

taxable year must not exceed 90% of the

royalties from tangible and real property

alternative

minimum

taxable

income

must be included in the numerator if the

determined without regard for the net operating

property is located in Iowa.

loss deduction on line 12. In effect, the

For a corporation first doing business in Iowa,

deduction is limited to 90% of line 11.

the inclusion of investment income determined

Line 14: The exemption amount of $40,000

to be business income in the business activity

must be reduced, but not below zero, by 25%

ratio of that year’s initial return is binding on all

of the amount that line 13 exceeds $150,000.

subsequent years’ returns. The election to

Line 18: If line 16 is greater than line 17, enter

include business investment income in the

the difference as the Iowa alternative minimum

business activity ratio can later be changed

tax here and on the IA 1120, line 18. If line 16

only with permission of the Director of the Iowa

is less than line 17, enter zero here and on IA

Department of Revenue.

1120, line 18. Federal form 4626 must be

Service Companies: All gross receipts from

included with this return.

the performance of services are includable in

Schedule

8827

and

AMT

the numerator of the activity ratio if the

worksheet

recipient of the service receives all the benefit

Schedule 8827 and the AMT worksheet must

of the service in Iowa. If the recipient of the

be completed by corporations to compute the

service receives some of the benefit of the

Alternative Minimum Tax Credit, if any, for

service in Iowa, the gross receipts are

alternative minimum tax incurred in prior tax

includable in the numerator of the activity ratio

years and to compute any alternative minimum

in proportion to the extent the recipient

tax credit carryforward that may be used in

receives benefit of the service in Iowa.

future years.

Schedule IA 4626

Line 1: Enter carryforward of Alternative

Line 2: Enter the total amount from line 2a

Minimum Tax Credit in column E of the AMT

through 2o of federal form 4626.

worksheet and also in Part 1, column C of the

Line 3: Enter the applicable amounts from

IA 148 Tax Credits Schedule.

lines 2l and 2m of federal form 4626.

Line 2: Enter the current period regular tax

Line 6: Enter the amount of adjusted current

liability minus allowable nonrefundable credits.

earnings adjustment shown on line 4e of

federal form 4626. If the amount includes any

interest from state and municipal bonds and

regulated investment companies, IRC section

936 Puerto Rican dividends, or FSC dividends,

the amount must be recomputed. Deduct any

interest from state and municipal securities and

regulated investment companies exempt from

federal income tax, net of any amortization of

any discount or premium, IRC section 936

Puerto Rican dividends, or FSC dividends from

the adjusted current earnings of the corporation

from line 10 of the federal Adjusted Current

Earnings Adjustment Worksheet. Multiply the

amount by which adjusted line 10 of the federal

Adjusted

Current

Earnings

Adjustment

42-002 (09/08/14)

Iowa Corporation Income Tax Instructions - 2014 Page 7

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