Schedule C-2 - Excess Deductions Against Trade Or Business Income - 2013

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2013
Schedule C-2
Massachusetts
Excess Deductions
epartment of
Against Trade or Business Income
Revenue
Generally, taxpayers may not use excess 5.25% deductions to
• these excess deductions may only be used to offset income
off set interest (other than from Massachusetts banks), dividends
which is effectively connected with the active conduct of a
and capital gains income. However, where the taxpayer files a
trade or business or any income allowed under IRC, Section
Massachusetts Schedule C or a Massachusetts Schedule E,
469(d)(1)(B) to offset (losses) from passive activities.
Massachusetts law allows such offsets if the following require-
To determine if you have excess deductions, complete lines 1
ments are met:
through 6. If line 6 is “0” or greater, you have no excess deduc-
• the excess 5.25% deductions must be adjusted gross income
tions. If line 6 is less than “0,” you have excess deductions and
deductions allowed under MGL Ch. 62, section 2(d); and
should complete the remainder of Schedule C-2.
11 Total 5.25% income or (loss) (from Form 1, line 10 or 1-NR/PY, line 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
12 5.25% interest exemption (total Massachusetts bank interest or the interest exemption amount, whichever is smaller,
from Form 1, line 5a or line 5b or Form 1-NR/PY, line 7a or line 7b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
13 Abandoned Building Renovation Deduction (from Schedule C, line 30; Schedule E, line 57) . . . . . . . . . . . . . . . . . . . . . . . . 3
14 Combine lines 1, 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
15 Additional adjusted gross income deductions (from Form 1 or 1-NR/PY, Schedule Y, total of lines 1 through 10) . . . . . . . . 5
16 Subtract line 5 from line 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
17 If line 6 is “0” or greater, you have no excess deductions. Omit remainder of schedule. If line 6 is less than “0,”
enter in lines 7a and 7b any of the following amounts included in Schedule B, lines 10 through 12:
a 12% capital gains effectively connected with the active conduct of your trade or business (attach statement
substantiating such claim) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7a
b 12% capital gains from passive activities allowed to offset (losses) from passive activities in the current
taxable year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7b
Add lines 7a and 7b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
18 Allowable deduction. Enter the smaller of line 6 (considered as a positive amount) or line 7 here and on
Schedule B, line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
19 Combine lines 6 and 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10 If line 9 is “0” or greater, you have no excess deductions. Omit remainder of schedule. If line 9 is less than “0,”
enter in lines 10a and 10b any of the following amounts included in Schedule B, line 4:
a Interest (other than from Massachusetts banks) and dividends effectively connected with the active conduct of
your trade or business (attach statement substantiating such claim) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10a
b Interest (other than from Massachusetts banks) and dividends from passive activities allowed to offset (losses)
from passive activities in the current taxable year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10b
Add lines 10a and 10b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11 Allowable deduction. Enter the smaller of line 9 (considered as a positive amount) or line 10 here and on
Schedule B, line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12 Combine lines 9 and 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13 If line 12 is “0” or greater, you have no excess deductions. Omit remainder of schedule. If line 12 is less than “0,”
enter in lines 13a and 13b any of the following amounts included in Schedule D:
a Long-term capital gains effectively connected with the active conduct of your trade or business (attach
statement substantiating such claim) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13a
b Long-term capital gains from passive activities allowed to offset (losses) from passive activities in the current
taxable year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13b
Add lines 13a and 13b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14 Allowable deduction. Enter the smaller of line 12 (considered as a positive amount) or line 13 here and on
Schedule D, line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

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