Instructions For Form Sc1040 - 2011 (Page 3 of 9) in pdf

Instructions - South Carolina Form SC1040

A change in the accounting method to conform in the same

Line i - NET CAPITAL GAIN DEDUCTION

manner and the same amount to the federal. This may be an

Net capital gains which have been held for a period of more than

addition or a subtraction. At the end of the federal

one year and have been included in the SC taxable income are

adjustment, any balance will continue until fully adjusted.

reduced by 44% for SC income tax purposes.

The installment method of reporting is to be adjusted if the

entire sale has been reported for state purposes or to continue

The term "net capital gain" means the excess of the net

on an installment basis if the entire sale has been reported for

long-term capital gain for the taxable year over the net

federal purposes. This may be an addition or a subtraction.

short-term capital loss for such year. Income received from

installment sales as well as capital gain distribution qualifies for

Adjust the federal gain or loss to reflect any difference in the

this deduction provided the more than one year holding period

South Carolina basis and federal basis. This may be an

has been met. (SC Capital Gains holding period is the same as

addition or a subtraction.

the federal.) Multiply the net gain which meets the above

Line 2 - TOTAL ADDITIONS

guidelines by 44% (.44) and enter the results on this line.

Add lines a through e and enter total. These are your total

Example: Taxpayer's gain on stock (held more than one year) is

additions.

$10,000. Also reported is a short term (ST) loss on stock held for

six months of $5,000 and a long term (LT) loss on stock held

since 1985 which amounts to $3,000.

SUBTRACTIONS FROM FEDERAL TAXABLE INCOME

SC Net LT Capital Gain

7,000

Enter all numbers on lines f through u as positive numbers even

(more than one year)

(10,000 gain - 3,000 loss)

if they are negative numbers on the federal return.

5,000 (one year or less)

SC Net ST Capital Loss

Lines f through u are adjustments which should be subtracted

SC Net Capital Gain

2,000

from your federal taxable income to determine your South

Net LT Capital

Carolina taxable income.

Gain Deduction

44%

Line f - STATE TAX REFUND

Amount to be deducted

880

If your state tax refund was included on your federal Form 1040,

Line j - VOLUNTEER DEDUCTION

that amount should be entered on this line.

Volunteer firefighters, rescue squad workers, volunteer hazardous

Line g - TOTAL AND PERMANENT DISABILITY

material HAZMAT team members, reserve police officers,

RETIREMENT INCOME TAXED ON YOUR

Department of Natural Resource (DNR) deputy enforcement

FEDERAL RETURN

officers, and members of the State Guard are allowed to deduct

$3,000. Volunteer firefighters, rescue squad workers and

If disability retirement income was taxed on your federal

HAZMAT members qualify only if their employer provides them

income tax return and you are totally and permanently

with a form stating that they have earned the minimum number of

disabled, you may be able to deduct this income from your South

points established by the State Fire Marshal during the year.

Carolina taxable income.

Reserve police officers, DNR deputy enforcement officers, and

the State Guard members qualify only if the appropriate authority

You must be totally and permanently disabled, unable to be

provides them with an I-332 certification form certifying their

gainfully employed in any capacity, receiving income from a

eligibility for this deduction. An individual is limited to one

disability retirement plan, and eligible for the homestead

deduction of $3,000. If a taxpayer and spouse both qualify, enter

exemption under Section 12-37-250 to qualify. You do not

$6,000. Enter the amount on line j and check the type of

qualify if you are receiving disability income from one job while

deduction.

able to perform another job. You must attach a copy of the

physician's statement establishing that you are permanently and

Line k - CONTRIBUTIONS TO THE SC COLLEGE

totally disabled.

INVESTMENT PROGRAM (“FUTURE SCHOLAR”) OR

TO THE SC TUITION PREPAYMENT PROGRAM

NOTE: The deduction is limited to payments received from

You may deduct 100% of any contributions to the SC College

retirement plans. Payments from disability plans which are

Investment Program (“Future Scholar”) made between January 1,

not retirement plans are not eligible for the deduction. Third

2011 and through April 15, 2012. You may deduct 100% of any

party sick pay reported on a W-2 does not qualify for the total

contribution to the SC Tuition Prepayment Program made

and permanent disability retirement deduction.

between January 1, 2011 and December 31, 2011.

A surviving spouse may take a disability retirement deduction for

Line l - ACTIVE TRADE OR BUSINESS INCOME

amounts received in the year the disabled spouse died. For

DEDUCTION

subsequent years, a surviving spouse is only eligible for the

retirement deduction on line p and not the disability deduction.

Enter the amount from I-335, line 5.

Line h - OUT-OF-STATE RENTAL/BUSINESS OR

Line m - INTEREST FROM U.S. OBLIGATIONS

REAL ESTATE INCOME NOT TAXABLE

TO SOUTH CAROLINA

If you included your interest income from U.S. obligations (such

as U.S. savings bonds, treasury notes and bills, etc.) as income

If you have income from out-of-state rental property; a business

on your federal income tax return, enter the amount on this line.

located outside South Carolina; or gain from real property located

Deduct the interest income from South Carolina and/or federal

out of state, as reported on your federal return, enter this amount

obligations.

on this line and check the appropriate box. However, personal

service income (W-2 or business wages) is taxable to South

Carolina no matter where it is earned.

Instructions For Form Sc1040 - 2011 Page 3

Related Articles

Related forms

Related Categories