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Screen CTPAL - Connecticut Instate and Passive Amounts (1040)
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Overview
Use this screen to suppress or freeze basis calculations and /or adjust the in-state amounts calculated as if the federal return was calculated using Connecticut source income, expenses and adjustments. If information transferred from UltraTax/1040 does not require additional data or coding, UltraTax/1040-CT shows it on the form only, not in the screen.
Nonresident and Part-Year Passive Activity Losses
UltraTax CS uses the information entered in this section to complete basis calculations for Form CT-1040NR/PY.
Suppress basis worksheet calculations
UltraTax CS calculates basis when federal Form 8582 would have been required had only Connecticut source income, expense, and adjustments been used to calculate the federal return for Connecticut part-year and nonresident taxpayers. The federal return calculates using allocation data entered for Connecticut basis and passive activity carryover information entered for Connecticut and MAGI purposes, and income amounts, regardless of basis or passive activity loss limitation impact. Selected amounts transferred to this screen result from that process. Enter
X
to suppress the calculation. Also, enter X
in the Suppress instate or PAL results below from appearing on Connecticut Post Allocation (AGI) Worksheet
field, if necessary.Freeze basis worksheet calculation results
UltraTax CS calculates basis amounts each time data transfers from the federal version of UltraTax CS. Enter
X
to suspend future calculation. Amounts on the Post Allocation Worksheet, Instate
orPAL Calculated Amounts
fields also freeze despite federal data change.Suppress instate or PAL results below from appearing on Connecticut Post Allocation (AGI) Worksheet
Enter
X
to use allocation amounts entered on Connecticut screens. If X
is entered, UltraTax CS updates the basis calculations with changed federal data. However, the amounts generated from the calculation are not used to complete the Connecticut Post Allocation Worksheet. UltraTax CS assumes that allocation data is entered in federal screens and calculates with federally entered allocation data.Post Allocation Worksheet - Instate Calculated Amounts
UltraTax CS uses the information entered in this section to complete portions of the Connecticut Post Allocation Worksheet. This screen is available to Connecticut part-year and nonresidents.
Business
Connecticut part-year and nonresident business income is a component of income that falls within passive activity loss limitation / instate calculations. Non-Connecticut business activities are removed and remaining units are used in a federal recalculation (unless a portion of the business activity is allocated to Connecticut via the state allocation spreadsheet available in federal Screen C). If a business unit is further designated as passive in federal Screen C-2, enter Connecticut passive carryover amounts, if applicable, within the state allocation spreadsheet or on the related Screen StCO. If passive activity carryover amounts calculate this year, the amounts will proforma to next year’s Screen StCO (passive carryovers) for the applicable business unit. If the taxpayer becomes a resident of Connecticut in the future, resident returns do not make provisions for passive activity carryovers that differ from federal carryover amounts.
Specific information for columns follows:
- Considering Only CT Sourced Activities:The amount that appears in this column is what the federal return would have calculated had all non-Connecticut activities been removed from the return. This is a calculating field, therefore data entry is not permitted.
- Adjustment: Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer/Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. Income and adjustments denoted with an asterisk are force fields for the spouse. Income and adjustments not denoted with an asterisk never have an amount assigned to the spouse.
Capital gain (loss)
Connecticut part-year and nonresident capital gain (loss) is a component of income that falls within the passive activity loss limitation / instate calculation. Non-Connecticut capital gains and losses are removed; remaining gains and losses are used in a federal recalculation. Short and long-term capital loss carryover amounts in federal Screen CO are disregarded. Enter an adjustment in this field to include these amounts. If passive activity carryover amounts calculate this year, the amounts will proforma to next year’s Screens StCO and/or K1-St for the applicable federal unit. If for partnership and S Corporation activities, basis carryover amounts calculate this year, the amounts will proforma to next year’s Screen K1-5 or K1-7. If the taxpayer becomes a resident of Connecticut in the future, resident returns do not make provisions for basis or passive activity carryovers that differ from federal carryover amounts.
Specific information for columns follows:
- Considering Only CT Sourced Activities: The amount that appears in this column is what the federal return would have calculated had all non-Connecticut activities been removed from the return. This is a calculating field. Data entry is not permitted.
- Adjustment: Enter an amount to adjust the calculated amount, if necessary. An adjustment may be needed if a short or long-term capital loss carryover is sourced to Connecticut.
- Portion of Total Sourced to Taxpayer / Spouse: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer/Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. Income and adjustments denoted with an asterisk are force fields for the spouse. Income and adjustments not denoted with an asterisk never have an amount assigned to the spouse.
Other gain (loss)
Connecticut part-year and nonresident other gain (loss) is a component of income that falls within the at-risk, basis, and passive activity loss limitation / instate calculation. Non-Connecticut other gains and losses are removed and remaining gains and losses are used in a federal recalculation. If passive activity carryover amounts calculate this year, the amounts will proforma to next year’s Screens StCO and/or K1-St for the applicable federal unit. If at-risk carryover amounts calculate this year, the amounts will proforma to next year’s Screen 6198. If for partnership and S Corporation activities, basis carryover amounts calculate this year, the amounts will proforma to next year’s Screen K1-5 or K1-7. If the taxpayer becomes a resident of Connecticut in the future, resident returns do not make provisions for basis, at-risk, or passive activity carryovers that differ from federal carryover amounts.
Specific information for columns follows:
- Considering Only CT Sourced Activities: The amount that appears in this column is what the federal return would have calculated had all non-Connecticut activities been removed from the return. This is a calculating field. Data entry is not permitted.
- Adjustment: Enter an amount to adjust the calculated amount, if necessary. An adjustment may be needed if a Section 1231 Nonrecaptured Loss carryover is sourced to Connecticut, for example.
- Portion of Total Sourced to Taxpayer / Spouse: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer/Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. Income and adjustments denoted with an asterisk are force fields for the spouse. Income and adjustments, not denoted with an asterisk, never have an amount assigned to the spouse.
Rents
Connecticut part-year and nonresident rent income (all federal Schedule E related income) is a component of income that falls within the at-risk, basis and passive activity loss limitation / instate calculation. Non-Connecticut rent, farm rent, K1 and K1-T activities are removed and remaining units are used in a federal recalculation (unless a portion of the rental activity is allocated to Connecticut via the state allocation spreadsheet available in federal Screens Rent, 4835, K1, and/or K1-T). If a rental unit is further designated (or defaults to) as passive at the federal level, enter Connecticut passive carryover amounts, if applicable, within the state allocation spreadsheet or on the related Screen StCO or Screen K1-St. If passive activity carryover amounts calculate this year, the amounts will proforma to next year’s Screens StCO and/or K1-St for the applicable federal unit. If at-risk carryover amounts calculate this year, the amounts will proforma to next year’s Screen 6198. If for partnership and S Corporation activities, basis carryover amounts calculate this year, the amounts will proforma to next year’s Screen K1-5 or K1-7. If the taxpayer becomes a resident of Connecticut in the future, resident returns do not make provisions for basis, at-risk, or passive activity carryovers that differ from federal carryover amounts.
Specific information for columns follows:
- Considering Only CT Sourced Activities: The amount that appears in this column is what the federal return would have calculated had all non-Connecticut activities been removed from the return. This is a calculating field, therefore data entry is not permitted.
- Adjustment: Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer/Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. Income and adjustments denoted with an asterisk are force fields for the spouse. Income and adjustments, not denoted with an asterisk never have an amount assigned to the spouse.
Example:
Rental loss federal carryover due to MAGI, partially allowed for Connecticut part-year resident- Federal wages = 238,000 (138,000 CT W-2; 100,000 NJ W-2)
- Rental #1 = Loss 25,000 (sourced to Connecticut)
- Rental #2 = Income 10,000 (sourced to Connecticut)
- Federal rental income / loss = 0; suspended loss 15,000, unit 1
Recalculated rental income / loss Connecticut = -6000; suspended loss 9000, unit 1.
Example:
Rental loss permitted federal return, partially suspended for Connecticut nonresident- Federal wages = 100,000 (sourced to Connecticut)
- Rental #1 = Loss 30,000 (sourced to Connecticut)
- Rental #2 = Income 40,000 (sourced to New Jersey)
- Federal rental income/loss = 10,000; suspended loss 0; exception met.
Recalculated rental income/loss Connecticut = -25,000; suspended loss 5000, unit 1.
Farm
Connecticut part-year and nonresident farm income is a component of income that falls within the at-risk and passive activity loss limitation / instate calculation. Non-Connecticut farm activities are removed and remaining units are used in a federal recalculation (unless a portion of the farm activity is allocated to Connecticut via the state allocation spreadsheet available in federal Screen F). If a farm unit is subject to at-risk limitations, enter Connecticut specific amounts in federal Screen 6198 or in the allocation spreadsheet related to Screen 6198. If a farm unit is further designated as passive in federal Screen F-2, enter Connecticut passive carryover amounts, if applicable, within the state allocation spreadsheet or on the related Screen StCO. If at-risk or passive activity carryover amounts calculate this year, the amounts will proforma to next year’s Screen StCO (passive carryovers) or Screen 6198 (at-risk carryovers) for the applicable farm unit. If the taxpayer becomes a resident of Connecticut in the future, resident returns do not make provisions for passive activity carryovers that differ from federal carryover amounts.
Specific information for columns follows:
- Considering Only CT Sourced Activities: The amount that appears in this column is what the federal return would have calculated had all non-Connecticut activities been removed from the return. This is a calculating field, therefore data entry is not permitted.
- Adjustment: Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust taxpayer or spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. Income and adjustments denoted with an asterisk are force fields for the spouse. Income and adjustments, not denoted with an asterisk, never have an amount assigned to the spouse.
Other income
Connecticut part-year and nonresident other income is a component of income that falls within the basis, at-risk and passive activity loss limitation / instate calculation. Non-Connecticut other income amounts are removed and remaining other income amounts are used in a federal recalculation. If passive activity carryover amounts calculate this year, the amounts will proforma to next year’s Screen K1-St for the applicable federal unit. If at-risk carryover amounts calculate this year, the amounts will proforma to next year’s Screen 6198. If for partnership and S Corporation activities, basis carryover amounts calculate this year, the amounts will proforma to next year’s Screen K1-5 or K1-7. If the taxpayer becomes a resident of Connecticut in the future, resident returns do not make provisions for basis, at-risk, or passive activity carryovers that differ from federal carryover amounts.
Specific information for columns follows:
- Considering Only CT Sourced Activities: The amount that appears in this column is what the federal return would have calculated had all non-Connecticut activities been removed from the return. This is a calculating field, therefore data entry is not permitted.
- Adjustment: Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer/Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. Income and adjustments denoted with an asterisk are force fields for the spouse. Income and adjustments, not denoted with an asterisk, never have an amount assigned to the spouse.
Self-employment tax
The self-employed tax adjustment to income is recalculated based in part on the income amounts that appear in the
Income
fields in this screen.Specific information for columns follows:
- Considering Only CT Sourced Activities: The amount that appears in this column is what the federal return would have calculated had all non-Connecticut activities been removed from the return. This is a calculating field, therefore data entry is not permitted.
- Adjustment: Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer / Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required), enter an amount in the field provided in theSpousecolumn. This amount is a force field for the spouse.
SEP or qualified plan / Self-employed health / IRA deduction
SEP (or other qualified plan), self-employed health and IRA deductions are recalculated based in part on the income amounts included in income classified as self-employed net profit. The allocation for IRA deduction takes into consideration instate wages as they relate to worldwide wages combined with SE net profit.
Specific information for columns follows:
- Considering Only CT Sourced Activities: The amount that appears in this column is what the federal return would have calculated as SE net profit had all non-Connecticut activities been removed from the return. This is a calculating field; therefore data entry is not permitted.
- Adjustment: Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer / Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required, enter an amount in the field provided in theSpousecolumn. All adjustment to income amounts are force fields for the spouse.
Penalty on early withdrawal
Penalty on early withdrawal can be limited or allowed by at-risk and basis calculations.
Specific information for columns follows:
- Considering Only CT Sourced Activities: The amount that appears in this column is what the federal return would have calculated had all non-Connecticut activities been removed from the return. This is a calculating field; therefore data entry is not permitted.
- Adjustment: Enter an amount to adjust the calculated amount, if necessary.
- Portion of Total Sourced to Taxpayer / Spouse: The calculated taxpayer amount appears in theTaxpayercolumn. To adjust Taxpayer / Spouse amounts for joint returns (when taxpayer and spouse separate amounts are required, enter an amount in the field provided in theSpousecolumn. All adjustment to income amounts are force fields for the spouse.