Form Changes Summary - Summary Of Changes & Common Problem Areas

FORM

NEW HAMPSHIRE DEPARTMENT OF REVENUE ADMINISTRATION

NH-1041

FIDUCIARY BUSINESS PROFITS TAX RETURN

Instructions

LINE-BY-LINE INSTRUCTIONS

STEP 1

At the top of the return enter the beginning and ending dates of the taxable period if different than the calendar year.

Name &

Please PRINT the estate or trust name and federal employer identification number in the space provided.

FEIN

IRC RECONCILIATION: Check the box and complete the appropriate Schedule R to reconcile federal taxable income to NH taxable income

STEP 2

based on IRC in effect on December 31, 2000.

Figure

Line 1: INCOME

Your

(a)

Enter the gross receipts or sales from all business activity except rental receipts which should be included on Line 1(f).

Tax

Enter the amount of sales returns and allowances.

(b)

Line 1(a) minus Line 1(b).

(c)

Compute your cost of goods sold and/or operations on a separate schedule showing the beginning inventory, purchases made

(d)

during the period, labor and other costs associated with producing the goods or services and the ending inventory. This

schedule must be attached to your return.

Line 1(c) minus Line 1(d).

(e)

Enter the gross amount received for the rental of property. Rental expenses must be deducted on Lines 2(a) through 2(l) and

(f)

not netted against the gross receipts.

(g)

Enter any other business income received by the estate or trust.

(h)

Combine Lines 1(e) through 1(g).

Line 2: DEDUCTIONS

(a)

Enter the total fees actually paid to the fiduciary for administering the business activities of the estate or trust during the taxable

period.

Enter the total amount of salaries and wages paid or incurred for the taxable period relating to business activities, provided they

(b)

have not been deducted elsewhere in the return.

(c)

Enter the cost of incidental repairs that do not add to the value of business property or prolong its useful life.

(d)

Enter the business debts that have become worthless during the tax year.

(e)

Enter the expense incurred to rent space, equipment or other property used in conducting business activity.

(f)

Enter the taxes paid or accrued by the estate or trust except federal or foreign income tax or taxes paid by the fiduciary on behalf

of other parties. To be deductible, the taxes must be properly assessed against the trust or estate and be for its business activities.

(g)

Enter the interest incurred on borrowed funds which have been used in the business activities reportable under the Business

Profits Tax.

(h)

Enter the business related charitable contributions made during the taxable period in accordance with the IRC as defined by RSA 77-A:1, XX.

(i)

Enter the depreciation for assets used in business activities reportable under the Business Profits Tax. Attach a schedule showing

the description, cost, previous depreciation taken, method and rate of depreciation and the current year amount. Federal Form 4562

may be used for this purpose.

(j)

Enter the business related expenses for travel or entertainment in accordance with the IRC as defined by RSA 77-A:1, XX.

(k)

Enter the expenses incurred for advertising the business activities of the trust or estate.

(l)

Enter the other ordinary and necessary business expenses not included in Line 1(d) or Lines 2(a) through 2(k). A schedule showing

the type and amount of each deduction must be attached to this return.

(m)

Combine Lines 2(a) through 2(l).

Line 3: NET GAIN (LOSS) FROM SALE OF ASSETS.

(a & b) Enter a complete description of the business or rental property sold including the address if the property sold was real estate.

Report the gain (loss) on the sale without the effects of federal passive loss limitation rules. If a loss, show in parenthesis, e.g.

($50). If you need additional space, please attach a schedule.

(c)

Enter the total of Lines 3(a) and 3(b) on Line 3(c).

Line 4: INSTALLMENT GAIN (LOSS).

(a & b) Taxpayers who are reporting the sale of business assets on the installment basis for federal tax purposes must also use the

installment method on the Form NH-1041. Under certain conditions, an election can be made by using Form DP-95 to report the entire

gain in the year of sale. Form DP-95 may be obtained from our web site at or by calling (603) 271-2192.

Taxpayers who have sold business or rental property on the installment basis will be considered a business organization until all the

installments have been reported and the total tax paid. You MUST file a return every year, regardless of the amount of installments,

if the sale price exceeded $50,000 for taxable periods ending July 1, 1993 to the present.

Enter the original date of the sale. Report the installment gain or (loss) received in this taxable period without the effects of federal

passive loss limitation rules. If a loss, show in parenthesis, e.g. ($50). If you need additional space, please attach a schedule.

(c)

Enter the total of Lines 4(a) and 4(b) on Line 4(c).

Line 5: SEPARATE ENTITY ADJUSTMENT.

Enter the amounts which arise from the necessity of adjusting gross business profits to accommodate the New Hampshire

requirement of separate entity treatment for business organizations. This would include the estate or trust share of a partnership's

activity in which it is a partner, as reported on Lines 1(a) through 4(c). Attach a schedule detailing this amount.

Line 6: GROSS BUSINESS PROFITS.

Combine Lines 1(h), 2(m), 3(c), 4(c) and 5. If a loss, show in parenthesis, e.g. ($50). If this total is negative, this amount represents

the estate or trust net operating loss available for future deduction. This amount may be subject to apportionment provisions.

NH-1041

Instructions

Rev. 09/2007

Form Changes Summary - Summary Of Changes & Common Problem Areas - 2007 Page 4

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