DATA-ENTRY EXAMPLES FOR STATE ALLOCATION INFORMATION UltraTax/1040

Size: px

Start display at page:

Download "DATA-ENTRY EXAMPLES FOR STATE ALLOCATION INFORMATION UltraTax/1040"

Nicholas Stanley
6 years ago
Views:

1 DATA-ENTRY EXAMPLES FOR STATE ALLOCATION INFORMATION UltraTax/1040 Introduction... 1 Using the State allocation spreadsheet... 1 Spreadsheet for Screens C, F, 4835, and Rent... 1 Spreadsheet for Screens K1, K1T, and Entering allocation data for AGI states... 5 Entering K1 data for build-up states... 6 Entering interest and dividends... 8 Processing single states Processing tips Introduction This document presents an overview of the State allocation spreadsheet and the data-entry requirements for state processing in UltraTax CS. Use the examples in this document to process state allocations. Using the State allocation spreadsheet UltraTax/1040 provides a State allocation spreadsheet for Screens C, F, 4835, Rent, K1, K1T, and If you are processing a California, Hawaii, or Wisconsin part-year resident or nonresident return, statespecific Total Sources and Sources columns will be present for state source amounts. To open the State allocation spreadsheet from tax data entry or Organizer data entry, choose View > Allocation or click the Allocation button in the input screen. You may also right-click and choose Allocation from the context menu. If allocation data has been entered in the spreadsheet, the blue Allocation button text will change to red. Spreadsheet for Screens C, F, 4835, and Rent The following State allocation spreadsheet is typical of the spreadsheet available from Screen C, F, 4835, or Rent for a return with multiple states attached. Copyright by Thomson Reuters. All rights reserved. Page 1

Figure 1: State allocation spreadsheet Income and PAL carryovers for Screens C, F, and 4835 Notice that: Although New York is not the first state alphabetically, its column appears first.

2 Figure 1: State allocation spreadsheet Income and PAL carryovers for Screens C, F, and 4835 Notice that: Although New York is not the first state alphabetically, its column appears first. This is an example of primary state behavior. UltraTax CS considers New York to be the primary state for this business unit because the postal code entered for this unit is NY. UltraTax CS determined that the client is not a resident of any other attached states. Because these states are not considered primary, UltraTax CS automatically assigns zero income to these states for this business unit. Non-primary states are listed in alphabetical order. For your reference, the last column displays the business unit s related federal amounts. Note: If more than one resident state is processed, the first, alphabetically, is considered primary. If you are processing several state returns for a client, a column for each state appears in the allocation spreadsheet. If you are processing more states than those that appear on screen, use the horizontal scrollbar at the bottom of the spreadsheet to access the additional state columns. The allocation spreadsheet can accommodate as many states as can be processed in UltraTax CS. TL Page 2 Data-Entry Examples for State Allocation Information: UltraTax/1040 Copyright by Thomson Reuters. All rights reserved.

3 The state columns contain disabled (gray) fields and enabled (white) fields. Some states have more enabled fields than do other states. If a state is classified as an AGI state other than Kentucky and New York, fewer amount fields are used to calculate in-state income. If a state is classified as a partial build-up state (New Jersey, for example), more fields may be available for data entry, or allocation may be restricted to percent of federal only. If a state is classified as a full build-up state (California, for example), all fields are generally available, including passive and at-risk carryover fields. For full build-up states, federal income may only be allocated by percent. However, passive carryover amounts specific to California, Hawaii, Kentucky, Massachusetts, Montana, and Wisconsin may be entered. New York resident returns follow AGI rules, but due to Form IT-182, part-year and nonresident returns follow build-up rules. Passive carryover amounts are only available to full build-up states and Kentucky, Montana (all residencies), and New York part-year and nonresident returns. If you processed the client s state return last year and if that state had state-specific carryover amounts last year, those state-specific amounts proforma to this year s allocation spreadsheet. In general, allocation pertains only to part-year and nonresident returns. The exceptions to this rule are Kentucky and New Jersey (for reporting all differences regardless of residency) and Oklahoma, South Carolina, and Michigan (for reporting out-of-state income). For these five states, the allocations you enter affect resident calculations as well as part-year and resident nonresident calculations. Click the Print or Preview button in the State allocation spreadsheet dialog to print or preview allocation information for future reference. If licensed, you can print reports to FileCabinet CS. Click Cancel in the State Allocation dialog if, upon initial entry in the spreadsheet, you do not want to preserve the initial default calculations. After allocation amounts have been saved to the spreadsheet, the button text will change from Cancel to Clear Allocation. Click the Clear Allocation button to delete all amounts, all carryover amounts, or all non-carryover amounts in the State allocation spreadsheet. Spreadsheet for Screens K1, K1T, and 6198 The State allocation spreadsheet available for Screens K1, K1T, and 6198 includes additional features that are not available in the allocation spreadsheet for Screens C, F, 4835, and Rent. Copyright by Thomson Reuters. All rights reserved. Page 3

Figure 2: State allocation spreadsheet PAL carryovers and depreciation for Screens K1, K1T, and 6198 Notice that: The spreadsheet contains a separate tab for each input screen section.

4 Figure 2: State allocation spreadsheet PAL carryovers and depreciation for Screens K1, K1T, and 6198 Notice that: The spreadsheet contains a separate tab for each input screen section. When you click one of the Allocation buttons in Screen K1, K1-2, K1-3, K1-4, K1-5, K1-6, K1-7, K1-8, or 6198, UltraTax CS opens the spreadsheet with the appropriate tab displayed. If federal data is present in an input screen section and if you applied a percentage for allocation, UltraTax CS places a black dot in the upper-left corner of the related spreadsheet tab to indicate that allocated data exists. Unlike business, farm, farm rent, and rental income, you can allocate partnership, S Corporation, trust, and estate income by individual component income, loss, expense, and deduction amounts. You can apply a percentage and then adjust one or two amounts (if needed) without having to manually enter each amount. If the state you are processing is not compliant with the federal depreciation, use the Depreciation addition and subtraction and Disposition addition and subtraction fields to enter state-specific adjustments. Screens K1-5, K1-6, K1-7, and K1-8 are available to some states (Alabama, California, Hawaii, Kentucky, Massachusetts, New York part-year residents and nonresidents, and Wisconsin) for allocating partner and shareholder basis with state-specific amounts. TL Page 4 Data-Entry Examples for State Allocation Information: UltraTax/1040 Copyright by Thomson Reuters. All rights reserved.

5 Figure 3: State allocation spreadsheet Partner and shareholder basis for Screens K1-5, K1-6, K1-7, and K1-8 Entering allocation data for AGI states UltraTax CS AGI states have limited use of the fields in the State, if different column on federal Screens K1, K1-2, K1-3, K1-4, K1-5, K1-6, K1-7, K1-8, K1T, K1T-2, and Shaded fields (which are not enabled for user input) indicate amounts that are not used to calculate the in-state portion of a particular unit s income or loss. In the following example, the Section 1256 contracts and straddles field in the Arizona column is shaded because this income amount is not included in the calculation of the income attributable to Arizona. If an amount is entered in the Section 1256 contracts and straddles field for this unit and the amount is partly or entirely attributable to Arizona, it may be necessary to manually adjust an amount in an enabled field (which is a field that is not shaded) for Arizona. (See the amount in the Net rental real estate income (loss) field in the Arizona column for an example of an adjustment.) Some states that are classified as AGI states may have additional enabled fields for in-state income / loss. Copyright by Thomson Reuters. All rights reserved. Page 5

Figure 4: State allocation spreadsheet Allocation data for AGI states Entering K1 data for build-up states UltraTax CS allows allocating amounts in Screen 6198 when entering K1 data for build-up

6 Figure 4: State allocation spreadsheet Allocation data for AGI states Entering K1 data for build-up states UltraTax CS allows allocating amounts in Screen 6198 when entering K1 data for build-up states. In addition, build-up states have State, if different capabilities for more than one state in a single unit. For more information, choose Help > Help & How-To, enter State allocation in the Search field, and choose a topic from the list. TL Page 6 Data-Entry Examples for State Allocation Information: UltraTax/1040 Copyright by Thomson Reuters. All rights reserved.

Figure 5: Screen 6198 Copyright 1991 2012 by

Figure 6: Screen 6198 Allocation data for build-up states Entering interest and dividends All allocations for interest and dividends should be completed in the statement dialogs attached to the

8 Figure 6: Screen 6198 Allocation data for build-up states Entering interest and dividends All allocations for interest and dividends should be completed in the statement dialogs attached to the Interest and Dividends fields on these screens. Note: UltraTax CS does not automatically assign the business unit s postal code to the interest and dividends data. You should enter the appropriate postal code in the Interest and Dividends statement dialogs. Particular attention should be paid to the In-State Source % column for part-year resident and nonresident state return processing. If you enter the in-state postal code in the State field in the statement dialog, UltraTax CS assumes that the interest or dividend amount is 100 percent in state. This is true even if you used the State allocation spreadsheet to allocate zero percent to the state in which the client is a part-year resident. TL Page 8 Data-Entry Examples for State Allocation Information: UltraTax/1040 Copyright by Thomson Reuters. All rights reserved.

For example, if an activity has been allocated by 79.73 percent to New York (resident from March 16 through the end of the year) and 20.

9 For example, if an activity has been allocated by percent to New York (resident from March 16 through the end of the year) and percent to California (resident from the beginning of the year through March 15) for an activity based in Arizona (where the taxpayer is not a resident), enter the interest item as illustrated in the following figure. Note the use of code S (state) in the first column. Note: Entries for U.S. obligations and in-state municipal interest or dividends may be designated as a percentage or a dollar amount. A symbol, either $ or %, appears after the entry. Entries containing a decimal after or within the numeric value display as a percentage. Figure 7: Interest Income for S-Corporations and Partnerships statement dialog from Screen K1 Copyright by Thomson Reuters. All rights reserved. Page 9

10 Processing single states At least one state return must be attached to the client to access the State allocation spreadsheet. In this example, a Washington business is allocable to the attached nonresident Massachusetts return. Figure 8: Screen C State allocation To allocate business, rental, farm, or farm rent income for a client with a single state return attached, access Screen St CO and enter the allocation information in the State Activity General Information section. You can also access the State allocation spreadsheet and enter the allocation information for a single, attached state return. Note that percent of the current year business activity in the following figure is allocated to Massachusetts. The percentage is not applied to carryover amounts. TL Page 10 Data-Entry Examples for State Allocation Information: UltraTax/1040 Copyright by Thomson Reuters. All rights reserved.

Figure 9: Screen St CO State allocation Copyright

Figure 10: State allocation spreadsheet Single-state return In Screens K1, K1-2, K1-3, K1-4, K1-5, K1-6, K1-7, K1-8, K1T, K1T-2, and 6198, UltraTax CS includes State, if different fields that you can

12 Figure 10: State allocation spreadsheet Single-state return In Screens K1, K1-2, K1-3, K1-4, K1-5, K1-6, K1-7, K1-8, K1T, K1T-2, and 6198, UltraTax CS includes State, if different fields that you can use to enter data for single-state processing. You may also access the State allocation spreadsheet to enter state amounts. When processing a full build-up state, such as Hawaii or a part-year or nonresident New York return, state-specific carryover amounts may be entered in Screen K1-St, as shown in the following illustration. TL Page 12 Data-Entry Examples for State Allocation Information: UltraTax/1040 Copyright by Thomson Reuters. All rights reserved.

Figure 11: Screen K1-St Passive carryovers Copyright

Figure 12: Screen K1 State, if different fields TL 25610 Page 14 Data-Entry Examples for State

Figure 14: State allocation spreadsheet Partner and shareholder basis for Screens K1-5, K1-6, K1-7, and K1-8 Processing tips The following processing tips should be kept in mind when entering

16 Figure 14: State allocation spreadsheet Partner and shareholder basis for Screens K1-5, K1-6, K1-7, and K1-8 Processing tips The following processing tips should be kept in mind when entering multiple-state data. A postal code entry is required in federal Screens C, F, K1, K1T, Rent, and 4835 for all state processing. If you delete a state from a client s return, UltraTax CS also deletes the related allocation amounts within the return for that state, including any of that state s related entries in the State, if different fields on federal Screens C, F, K1, K1T, Rent, 4835, and If you are processing another state return, UltraTax CS automatically assigns another primary state to the State, if different fields. If the deleted state is later re-attached to the client s return, you must re-enter the allocated amounts. If you change the federal income and expense amounts after you enter an allocation, you should review any State allocation spreadsheet amounts that were present and re-allocate the new federal net income for that unit if necessary. TL Page 16 Data-Entry Examples for State Allocation Information: UltraTax/1040 Copyright by Thomson Reuters. All rights reserved.

17 If you delete an allocable federal activity, UltraTax CS also deletes the related state allocation amounts for that unit. If you delete an allocated screen within an activity, both federal and state if different (SID) amounts are deleted. However, data allocated to remaining states is not deleted unless removed from within the allocation spreadsheet. Note: Always view interest and dividend statement data. Viewing the data ensures proper transfer to any state returns processed. Some states calculate with pre-passive / at-risk amounts. Interest and dividend information is not affected by any State allocation spreadsheet entries. If you leave the State field in the Interest or Dividends statement dialog blank, amounts may only transfer to the resident state being processed. If you enter the postal code for the state return being processed, UltraTax CS transfers allocation information to the state being processed regardless of the postal code you entered in Screen K1 or K1T. For part-year and nonresident returns, enter in the Interest or Dividends statement dialog the in-state source percentage to indicate the amount that UltraTax CS should use for that state s return. Copyright by Thomson Reuters. All rights reserved. Page 17

DATA-ENTRY EXAMPLES FOR PARTNER S AND SHAREHOLDER S BASIS WORKSHEETS UltraTax/1040

DATA-ENTRY EXAMPLES FOR PARTNER S AND SHAREHOLDER S BASIS WORKSHEETS UltraTax/1040 Introduction... 2 Forms and schedules... 2 Partner s and Shareholder s Basis Worksheets... 2 Example 1 Current-year loss