1040-US: Allocating income to states in the state allocation spreadsheet (for Screens C, E, F, and 4835)

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Question

How do I allocate federal net income to the applicable states displayed in the State allocation spreadsheet? (Screens C, E, F, and 4835)

Answer

Two methods (percentage or amount) of allocation can be used to allocate federal net income to the applicable state(s) displayed in the State allocation spreadsheet.

Note: Amount fields applicable to one state may not be applicable to another state. Those amount fields that do not apply to a particular state have been disabled (shaded). Amount fields that are not shaded are considered enabled for the applicable state.

Build-up states that report or otherwise calculate income from these Schedules C, E, and F and Form 4835 activities on an amount by amount basis may be allocated using a percentage only, while passive carryover amounts may be allocated by entering the state specific carryover amounts within the State allocation spreadsheet.

Other states, which are typically AGI states that require net activity amounts only, may be allocated by percentage or by entering the net amount of activity income / allowable loss attributable to the specific state.

Note: Passive activity carryover amounts are disabled for AGI states except Kentucky, Montana, New York, and Oregon.

New York Note: Amounts entered for part-year resident and nonresident New York taxpayers are used to complete Form IT-182, Passive Activity Loss Limitations, basis and at-risk worksheets. Only New York source amounts are used to complete Form IT-182. Therefore, the calculation may differ from federal Form 8582.

Montana Note: Montana-sourced passive activity losses should be entered in the State allocation spreadsheet.

Kentucky Note: Kentucky-sourced passive activity losses, basis, and at-risk amounts should be entered in the State allocation spreadsheet.

Connecticut Note: Connecticut-sourced passive activity losses and basis amounts should be entered in the State allocation spreadsheet.

The State allocation spreadsheet may be printed in a report format for future reference. Click the Print or Preview button on the lower portion of the spreadsheet. If licensed, you can also print to FileCabinet CS.

Related topic: State allocation spreadsheet FAQs (1040)

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