General Instructions For All Business Entities Including Estates And Trusts - City Of Loveland Ohio Business Income Tax Return - 2003
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2CITY OF LOVELAND OHIO BUSINESS INCOME TAX RETURN
2003 GENERAL INSTRUCTIONS
FOR ALL BUSINESS ENTITIES INCLUDING ESTATES AND TRUSTS
BUSINESSES REQUIRED TO FILE
Each C-corporation, S-corporation, partnership, LLC, trust, estate or other business entity, other than non-profit organizations (as
determined by the I.R.S.), that have gross receipts from sales made, work done, services performed or rendered and business or other
activities (including rental activities and property, plant or equipment) in the Cit y of Loveland, whether or not such organization has
an office or place of business inside the City, is subject to Loveland income tax. If appropriate, entities may allocate their
profits/losses within and outside of the City by using the business allocation formula (Schedule Y) on page 2 of the tax form.
Schedule Y must be used if the books and records of the business entity do not accurately reflect the specific items of revenue and
expense attributable to business conducted in Loveland.
Sole propriet ors who are residents of the City of Loveland should file an Individual Income Tax return and report Schedule C or C-EZ
profits/losses on that form.
If an entity filed a return, or was required to file a tax return in previous years, but did not do any business within Loveland in calendar
or fiscal year 2003, please indicate so on a 2003 form and submit to the City of Loveland tax office on or before the regular filing
deadline.
For tax years 2003 and after, any flow-through entity domiciled or having a place of business within Loveland will be taxed at the
entity level only. This rule basically affects Loveland residents who report their flow-through income (loss) on Schedule E of their
individual returns. Any loss carry forward remaining after the 2002 tax year that is attributable to a specific entity will transfer and be
recognized under the new account. Please contact the Tax Administrator for further information.
TAXABLE INCOME
Taxable income should be computed using the starting point indicated below and inserting that amount on line 1, completing Schedule
X on page 2 of the form and inserting those amounts on lines 2A and 2B, and adding and/or subtracting as indicated to arrive at
Adjusted Net Income on line 3. Certain items of income are exempted from municipal tax by the Ohio Revised Code. These are as
follows: Capital Gains (excluding ordinary gains), Dividend income, Interest income, and other income derived from intangible
property/sources. These are reported on lines I – M of Schedule X. Certain items expensed on the federal return are disallowed as
deductions for municipal tax purposes as they are not considered ordinary, reasonable and necessary. These are as follows: Capital
Losses (excluding ordinary losses), Charitable contributions, Expenses applicable to the production of nontaxable income (at least 5%
of the amounts reported on lines J & K), and Guaranteed payments. All city and state taxes based on income are then added back in to
taxable income. All of these items are reported on lines A – F of Schedule X. Lines G and M of this schedule are for the reporting of
miscellaneous items that have been deemed taxable or deductible by Loveland city ordinance, rule, or regulation. These may include
½ of self-employment tax as reported on a sole proprietor’s federal return or certain Federal tax credits. Please contact the Tax
Administrator if you require information specific to your return. The objective of these additions and subtractions is to arrive at an
income or loss figure that is reflective of true business-related operations for the fiscal period.
Depending on type of entity and federal tax form being filed, enter the following amount from the federal tax return on line 1:
Entity
Form
Page
Section
Line #
Description
C Corporation
1120
1
28
Taxable income before net operating loss deduction
C Corporation
1120A
1
24
Taxable income before net operating loss deduction
S Corporation
1120S
3
Schedule K
23
Income(Loss)
Partnership
1065
4
Analysis of Net Income/Loss
1
Net Income (Loss)
Sole Proprietor
Sch C
1
31
Net Profit or (Loss)
Estates/Trusts
1041
Amount on line 1 = 0, see instructions for these
Types of entities
PAPERWORK REQUIRED
Attach a copy of the complete federal income tax return, including copies of supporting statements and schedules. By submitting a
complete copy, additional correspondence and questions from the tax auditor may be avoided. Please attach an itemized statement of
types of taxes and licenses deducted on the federal return. If the business takes any deductions from, or makes any additions to, their
federal taxable income on their city return that is not clearly identifiable on the federal ret urn, explanation must be attached. If you
must allocate the income (loss) and Schedule Y is not used, documentation of how the allocated figure was arrived at must be
included. ANY RETURN RECEIVED WITHOUT THE APPROPRIATE PAPERWORK CANNOT BE CONSIDERED AS
LEGALLY AND PROPERLY FILED. LATE FILING PENALTIES AND/OR DELINQUENT NOTICES MAY RESULT.
ALLOCATION FORMULA (SCHEDULE Y)
Complete this Schedule only if the business has a justifiable reason to allocate. Schedule Y may be used by entities moving into, or
out of, Loveland during the tax year. Entities that attribute 100% of each formula factor to Loveland do not need to complete
Schedule Y. Resident entities that complete Schedule Y and file income tax returns with other Ohio municipalities must attach a list
of those cities.
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