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M2, Lines 26–36

Line 26

Line 29

Line 32

State Income Tax

Federal Bonus Depreciation Addition

Net Operating Loss (NOL) Carryover

Adjustment

Enter the amount of state income tax de-

If you chose on your federal return the

ducted on the federal return. State income

special depreciation allowance for certain

Th e Minnesota Legislature did not adopt

tax deductions are not allowed on the Min-

qualifi ed property, you must add back 80

the provisions of the Worker, Homeowner-

nesota return. [M.S. 290.01, subd. 19a(2)]

percent of the bonus depreciation to Min-

ship, and Business Assistance Act of 2009

nesota.

(WHBA). Under this Act, taxpayers are

Line 27

allowed to carryback 3, 4, or 5 years an

Expenses Related to Income Not Taxed

Follow the steps below to determine line 29:

NOL generated in 2008 or 2009. For federal

by Minnesota, Other Than From U.S.

1 Add line 14 and line 25 of

purposes, any remaining NOL that was not

Bond Obligations

your federal Form 4562* . . . . .

fully absorbed in the carryback years can be

Expenses deducted on your federal return

2 Total of bonus depreciation

carried forward for up to 20 years, begin-

that relate to income not taxed by Minnesota

passed through to you as a

ning in 2010. If you claimed the deduction

must be added to your taxable net income.

shareholder of an S corporation

in 2014, you must add back the federal NOL

[M.S. 290.01, subd. 19a(5)]

(from line 4 of Schedule KS), or

amount as a positive number on line 32.

as a partner of a partnership

If you had expenses attributable to interest

Line 33

(from line 5 of Schedule KPI) .

or mutual fund dividends from U.S. bonds,

Domestic Production Activities Deduc-

see line 35.

3 Add steps 1 and 2 . . . . . . . . . . .

tion

Line 28

4 Multiply step 3 by 80% (.80) . .

If you are claiming a portion of the domes-

Suspended Loss of Bonus Depreciation

tic production activities deduction on the

5 Total of any 80% federal bonus

If you’re claiming a suspended loss from

estate’s or trust’s federal return, add back

depreciation addition you

2001-2005 or 2008 -2013 on your federal

this amount on line 33.

received as a benefi ciary of

return that was generated by bonus deprecia-

another estate or trust (from

Line 35

tion, and you did not add back 80 percent

line 5 of Schedule KF). . . . . . . .

Net Interest from U.S. Bonds

of the bonus depreciation in those years,

6 Add steps 4 and 5. Enter here

Interest earned on certain direct federal

complete the following steps:

and on line 29 . . . . . . . . . . . . . .

obligations is taxable on the federal return,

1 Bonus depreciation from 2001–

but is not taxable on the state return. You

* If bonus depreciation included in step 1 or

2005 or 2008-2013 not

may reduce your taxable income if you

2 generated a loss in an activity that cannot

added back on Form M2 . . . . .

reported interest on your federal return that

be deducted in 2014 (e.g., a passive activity

2 Total suspended loss from

is exempt from state income tax.

loss or a loss in excess of basis), you may

activity remaining aft er 2014 .

reduce step 1 or 2 by the amount of loss not

Include the interest you received from

3 Subtract step 2 from step 1 (if a

allowed from the activity for 2014, up to the

certain U.S. bonds, bills, notes and other

negative amount, enter zero) .

bonus depreciation claimed by the activity.

debt instruments, reduced by any related

4 Multiply step 3 by 80 percent

investment interest and other expenses you

In a future year when the 2014 suspended

(.80) . . . . . . . . . . . . . . . . . . . . . .

deducted on your federal return that relate

loss is allowed, you must include the bonus

5 Total of the 80 percent bonus

to this income.

depreciation as an addition. Th e bonus

depreciation addition passed

depreciation is treated as the last suspended

You may also include the portion of divi-

through to you as a benefi ciary

loss allowed.

dends from mutual funds that are attribut-

of another estate or trust (from

Line 30

able to such bonds, bill or notes, reduced by

line 4 of Schedule KF) . . . . . . . .

Fines, Fees and Penalties Deducted on

any related expenses you deducted on your

6 Add steps 4 and 5. Enter here

your Federal Return

federal return.

and on line 28 . . . . . . . . . . . . . . .

You must add fi nes, fees and penalties that

Enclose a statement from the fund indicat-

were deducted as business expenses paid

ing the proportionate interest earned on the

to a government entity or nongovernment

above securities. [M.S. 290.01, subd. 19b(1)]

regulatory body as a result of a violation

Line 36

of law, or the investigation of any poten-

State Income Tax Refunds

tial violation of law. Th is does not include

Income tax refunded by Minnesota or any

amounts identifi ed in a court order or

other taxing jurisdiction that was included

settlement agreement as restitution or as an

as income on the federal return is not taxed

amount paid to come into compliance with

by Minnesota. [M.S. 290.01, subd. 19b(2)]

the law.

Continued

2014 Minnesota Income Tax For Estates And Trusts (Fiduciary) Form M2 Instructions - Department Of Revenue Page 7

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