Adjustment for an Amount on Minnesota Schedule M1NC Line 11

Transcription

1 Adjustment for an Amount on Minnesota Schedule M1NC Line 11 When you have an amount on Schedule M1NC Line 11 (Depreciation of certain improvement property placed in service in 2013) and you are required to recalculate your federal AGI, you should increase your business income (or reduce your business loss) on your recalculated federal return to reflect depreciation allowed by Minnesota law. If the amount on Schedule M1NC Line 11 was reported by businesses on a Schedule C, Sole Proprietorship or Single Member LLC Property, or Schedule E, Real Estate Rental or Royalty Property you must change the asset category the business used for qualified leasehold improvement, restaurant or retail improvement property placed in service in If the amount on Schedule M1NC Line 11 was reported to you by a pass-through entity on a Schedule K-1, from a Partnership/LLC, an S corporation, or a trust or estate) you must adjust the income or loss reported to you on the partnership/llc, S corporation, or estate or trust Schedule K-1. Use the appropriate section(s) below for the type of business you need to adjust on your federal return. Adjust Business Depreciation Reported on Schedule C 1. Select Federal Taxes (Business in Home & Business edition), then select Wages & Income. 2. In a following screen, click I ll choose what I work on. 3. If the modified depreciation for qualified leasehold improvement, restaurant or retail improvement property placed in service in 2013 was reported on Schedule C, scroll down to the Business Items group and click Update next to Business Income and Expenses. 4. Click Edit for the business with modified depreciation for qualified leasehold improvement, restaurant or retail improvement property placed in service during M1NC Line 11 - Page 1

2 5. Click Continue until you arrive at the Business Expenses screen. Then click Update next to Assets and depreciation. 6. Click Edit for the asset with modified depreciation for qualified leasehold improvement, restaurant or retail improvement property placed in service during On the Describe This Asset screen, click Continue. On the Tell Us a Little More About Your Rental Asset screen, change the asset s category to Nonresidential real estate, then click Continue. If you have other amounts on Minnesota Schedule M1NC Line 11, return to the top and use the instructions for any additional business entities on your federal return. If you have no other Line 11 entries, return to the How to Recalculate Federal AGI to Comply with Minnesota Tax Law article to continue adjusting Line number amounts. Then click the link to adjust the next M1NC Line containing an amount. M1NC Line 11 - Page 2

3 Adjust Business Depreciation Reported on Schedule E 1. Select Federal Taxes (Business in Home & Business edition), then select Wages & Income. 2. In a following screen, click I ll choose what I work on. 3. If the modified depreciation for qualified leasehold improvement, restaurant or retail improvement property placed in service in 2013 is reported by a real estate rental or a royalty property on Schedule E, scroll down to the Rentals and Royalties group and click Update next to Rentals and Royalties. 4. Click Edit for the property with modified depreciation for qualified leasehold improvement, restaurant or retail improvement property placed in service in Click Continue until you arrive at the Review Your Rental/Royalty Summary screen, then click Update next to Assets/Depreciation. M1NC Line 11 - Page 3

4 6. Click Edit for the asset with modified depreciation for qualified leasehold improvement, restaurant or retail improvement property placed in service during On the Describe This Asset screen, click Continue. Then on the Tell Us a Little More About Your Rental Asset screen, change the asset s category to Nonresidential real estate. 8. When finished, click Continue. If you have other amounts on Minnesota Schedule M1NC Line 9, return to the top and use the instructions for any additional business entities on your federal return. If you have no other Line 9 entries, return to the How to Recalculate Federal AGI to Comply with Minnesota Tax Law article to continue adjusting Line number amounts. Then click the link to adjust the next M1NC Line containing an amount. Adjust Business Depreciation Reported on Schedule K-1 If the modified depreciation for qualified leasehold improvement, restaurant or retail improvement property placed in service in 2013 is reported by a partnership/llc, an S corporation, or a trust or estate you have an interest in 1. Select Federal Taxes (Business in Home & Business edition), then select Wages & Income. M1NC Line 11 - Page 4

5 2. In a following screen, click I ll choose what I work on. 3. Scroll down to the Business Items section and click Update for Schedules K-1, Q. 4. Click Update for the type of pass-through entity Sch K-1 you want to adjust: If it s a Partnership/LLC, continue with the next step. If it s an S corporation, go to Adjust an S Corporation below. If it s a trust or estate, go to Adjust a Trust or Estate below. Continue with the steps for the business type issuing your K-1. Adjust a Partnership/LLC K-1 5. Click Edit for the partnership/llc you want to adjust. 6. Click Continue until you reach the Box 1, Box 2 or Box 3 entry screen, depending on which of those boxes was used to report the partnership/llc s income/(loss). If the partnership/llc reported INCOME (you see a positive amount), INCREASE the amount in Box 1, Box 2 or Box 3 by the amount on Line 11 of Schedule M1NC. If the partnership/llc reported a LOSS (you see a negative amount), REDUCE the amount in Box 1, Box 2 or Box 3 by the amount on Line 11 of Schedule M1NC. The EXAMPLE below shows increasing income reported in Box 1. M1NC Line 11 - Page 5

6 7. When finished, click Continue. Adjust an S Corporation 5. Click Edit for the S corporation K-1 you want to adjust. 6. Click Continue until you reach the Box 1, Box 2 or Box 3 entry screen, depending on which of those boxes was used to report the S corporation s income/(loss). If the S corporation reported INCOME (you see a positive amount), INCREASE the amount in Box 1, Box 2 or Box 3 by the amount on Line 11 of Schedule M1NC. If the S corporation reported a LOSS (you see a negative amount), REDUCE the amount in Box 1, Box 2 or Box 3 by the amount on Line 11 of Schedule M1NC. The EXAMPLE below shows increasing income reported in Box When finished, click Continue. M1NC Line 11 - Page 6

7 Adjust a Trust or Estate 5. Click Edit for the trust or estate K-1 you want to adjust. 6. Click Continue through the screens until you reach the Box 6, Box 7 or Box 8 entry screen. If the trust or estate reported INCOME (you see a positive amount), INCREASE the amount in Box 6, Box 7 or Box 8 by the amount on Line 11 of Schedule M1NC. If the trust or estate reported a LOSS (you see a negative amount), REDUCE the amount in Box 6, Box 7 or Box 8 by the amount on Line 11 of Schedule M1NC. The EXAMPLE below shows increasing income reported in Box When finished, click Continue. If you have other amounts on Minnesota Schedule M1NC Line 11, return to the top and use the instructions for any additional business entities on your federal return. If you have no other Line 11 entries, return to the How to Recalculate Federal AGI to Comply with Minnesota Tax Law article to continue adjusting Line number amounts. Then click the link to adjust the next M1NC Line containing an amount. M1NC Line 11 - Page 7