Instructions For Form 1 - Massachusetts Resident Income Tax - 2013 Page 35
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2013 Form 1 — Schedule Instructions
gains or losses from the sale, exchange or in-
tributions in excess of the Massachusetts accu-
U.S. government or the Commonwealth of Mass-
mulated adjustments account are dividends to the
achusetts or its political subdivisions; or
voluntary conversion of property used in a trade
or business;
extent of the corporation’s Massachusetts accumu -
Any interest on pre-retirement distributions from
net long-term capital gains and losses; or
lated earnings and profits. For more information,
state and municipal contributory pension plans.
excess exemptions.
see Regulation 830 CMR 62.17A.1;
Do not enter in line 6 either of the following:
Collectibles are defined as any capital asset that is a
Interest and dividends from a partnership, S
Dividends from the earnings and profits accu-
collectible within the meaning of Internal Revenue
corporation, grantor-type trust, or non-Massachu-
mulated prior to January 1, 1971 by any corporate
Code section 408(m), as amended and in effect for
setts estate or trust from Massachusetts Schedule
trust which was not taxed directly by Massachu-
the taxable year, including works of art, rugs, an-
E. Generally, portfolio interest and dividend income
setts in prior years, even though such an entity is
tiques, metals, gems, stamps, alcoholic beverages,
from partnerships and S corporations should al-
taxed directly now (obtain from the entity the tax-
certain coins, and any other items treated as col-
ready be included in Schedule B, line 1 and line 2
able status of dividends paid to you); or
lectibles for federal tax purposes.
amounts;
Dividends from any corporate trust which is not
You need not file Massachusetts Schedule B if all
Interest from a trade or business that is reported
taxed directly by Massachusetts. Such entities in-
interest income you had was from Massachusetts
on Massachusetts Schedule C, line 32; or
clude: those not doing business in Massachusetts;
banks (reportable in Form 1, line 5a), and your
Interest or dividends from a mutual fund, if such
regulated investment companies or real estate in-
gross dividend income was $1,500 or less (divi-
distributions are not included in Schedule B, line
vestment trusts (both as defined under the U.S.
dend income of $1,500 or less is reportable on
1 or line 2. See Schedule B, line 6.
Internal Revenue Code, Sections 851 and 856); or
Form 1, line 20 and, if applicable, Schedule C, line
holding companies (as defined in Massachusetts
Lines 5 and 6
32), and you have no short-term capital gains or
General Laws, Chapter 62, section 8).
Enter only amounts related to income that you
losses, long-term gains on collectibles and pre-
have already included in lines 1, 2, and 3.
1996 installment sales, gains or losses from the
Line 8. Allowable Deductions
sale, exchange or involuntary conversion of prop-
Line 5. Total Interest from
from Your Trade or Business
erty used in a trade or business, allowable deduc-
Massachusetts Banks
Enter the appropriate amount from Massachu-
tions from your trade or business, carryover
setts Schedule C-2 if you qualify for an excess
short-term losses from prior years, net long-term
Enter the total interest included in Form 1, line 5a
trade or business deduction. Generally, taxpayers
capital gains or losses, or excess exemptions.
(prior to the exemption amount being subtracted)
may not use excess 5.25% deductions to offset
only if it has been included in lines 1 or 3 of this
You must complete Massachusetts Schedule B
other income. However, where the taxpayer files a
schedule.
if your interest or dividend income includes: divi-
Massachusetts Schedule C or Schedule E, Mass-
dends taxed directly to trusts or estates on a
Line 6. Other Interest and
achusetts law allows such offsets if the following
Mass achusetts Fiduciary Return, Form 2; or dis-
requirements are met: the excess 5.25% deduc-
Dividends to Be Excluded
tributions that are returns of capital.
tions must be adjusted gross income deductions
Enter the total interest and dividends from the fol-
allowed under MGL Ch. 62, sec. 2(d); and these
Part 1. Interest and Dividend Income
lowing sources (enclose an additional statement,
excess deductions may only be used to offset
if necessary) only if it has been included in lines 1
Line 1. Total Interest Income
other income which is effectively connected with
or 3 of this schedule:
Enter your total interest income from your U.S.
the active conduct of a trade or business or any
Interest on U.S. debt obligations. Enter interest
Form 1040 or 1040A, lines 8a and 8b, or U.S.
other income allowed under IRC, sec. 469(d)(1)(B)
received on U.S. Treasury bills, notes and bonds,
Form 1040EZ, line 2.
to offset losses from passive activities.
savings bonds or other obligations of the United
States, including its territories or dependencies.
Line 2. Total Ordinary Dividends
Line 9. Subtotal Interest and
Such interest is tax-exempt in Massachusetts. For
Enter your total ordinary dividends from your U.S.
Dividend Income
further information concerning exempt obliga-
Schedule B, Part II, line 6. If you did not file U.S.
Subtract line 8 from line 7. If you have no short-
tions of the United States, see TIR 89-8;
Schedule B, enter the amount from U.S. Form
term capital gains or losses, net long-term capital
1040 or 1040A, line 9a.
Interest and dividends taxed directly to Mass-
gains or losses, carryover short-term losses from
achusetts estates and trusts. Enter the interest and
prior years, long-term gains on collectibles and
Line 3. Other Interest and
dividends that are taxed directly to a Massachu-
pre-1996 installment sales classified as capital gain
Dividends
setts estate or trust (reportable on a Massachu-
income for Massachusetts purposes, gains or
Enter the following amounts and their sources
setts Fiduciary Return, Form 2);
losses from the sale, exchange or involuntary con -
(enclose additional statement if more space is
version of property used in a trade or business
Any distribution which is a return of capital in-
necessary):
and held for one year or less, allowable deductions
cluded in total gross dividends, line 2;
from your trade or business, or excess exemp-
Interest from obligations of other states and
Any interest or dividends from obligations of the
tions, omit lines 10 through 37. Enter the amount
their political subdivisions (including your share,
Commonwealth of Massachusetts or its political
from line 9 in line 38 of Schedule B and on Form
if any, from a partnership, an S corporation and a
subdivisions held by you;
1, line 20, and omit lines 39 and 40 of Sched-
grantor-type trust or non-Massachusetts trust).
ule B. Otherwise, complete Parts 2, 3 and 4.
Any exempt portion of interest or dividends
Do not include exempt interest already included in
from a mutual fund included in lines 1, 2 or 3 of
Schedule B, line 1;
this schedule. Enter only the exempt portion of in-
Taxable distributions from Massachusetts S cor -
terest or dividends derived from obligations of the
porations not reported in Schedule B, line 2. Dis-
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