- 3 -
|
IT BUS
Rev. 12/15
Ohio Schedule IT BUS is solely for use in determining taxable business income and
business income tax liability for purposes of completing the Ohio IT 1040 individual income
tax return. See Ohio Revised Code sections (R.C.) 5747.01(A)(31), 5747.01(B) and 5747.01(HH).
This schedule and instructions apply to all individual taxpayers Line 2 – Schedule C, Profi t or Loss from Business
who have business income. This schedule is used for recording all Enter on this line the amount on your federal 1040, line 12. If the
business income that is reported on IRS schedules B, C, D, E and amount entered is negative, place a negative sign (“-“) in the box
F as well as any other items of business income and gain sepa- provided.
rately stated on federal Schedule K-1 and miscellaneous federal
income tax adjustments, if any. Line 3 – Schedule D, Capital Gains and Losses
Enter on this line only capital gains or losses reported on federal
Enter on this schedule the combined business income amounts Schedule D that qualify as business income. Gains or losses re-
from all sources. List the separate business entities on Part 4 on ported on this line must be those that are generated in the ordinary
the back of the schedule. course of business, from assets integral to the taxpayer’s business
operation, or from working capital and reinvested into the busi-
Submit the IT BUS with the paper-fi led Ohio IT 1040. If you are ness. Gains or losses, from a partial or complete liquidation of a
fi ling electronically, the IT BUS will be included in your software business, including, but not limited to, gain or loss from the sale or
package. other disposition of goodwill should also be included on this line.
If the amount entered is negative, place a negative sign (“-“) in the
This schedule is only used for individual taxpayers fi ling the Ohio IT
box provided.
1040. Pass-through entities and trusts should not use this schedule.
Example: A farmer sells a tractor used in his wheat farming operation
Defi nitions
that generates a capital gain. The wheat cannot be harvested without
Business Income and Nonbusiness Income use of the tractor. Since the tractor was integral to the taxpayer’s busi-
“Business income” means income, including gain or loss, arising ness operations, the capital gain can be reported on this line.
from transactions, activities and sources in the regular course
Line 4 – Schedule E, Supplemental Income and Loss
of a trade or business and includes income from real, tangible
Enter on this line your net business income or loss reported on
and intangible property if the acquisition, rental, management
federal Schedule E. Also include guaranteed payments and/or
and disposition of the property constitute integral parts of the
compensation paid to you by a pass-through entity (S corporation,
regular course of a trade or business operation. Also, “business
partnership, limited liability company treated as a partnership for
income” consists of income, including gain or loss, from a partial
income tax purposes, etc.) in which you have at least a 20% direct
or complete liquidation of a business, including, but not limited to,
or indirect ownership interest. I.R.C. section 318 attribution rules
gain or loss from the sale or other disposition of goodwill (R.C.
do not apply. Reciprocity agreements do not apply. If the amount
5747.01(B)).
entered is negative, place a negative sign (“-“) in the box provided.
In general, income, deductions, gains and losses recognized by a
If your net amount from federal Schedule E includes guaranteed
sole proprietorship or a pass-through entity are items of business
payments from a pass-through entity in which you have less than
income.
a 20% direct or indirect ownership interest, those payments must
“Nonbusiness income” means all income other than business income be deducted from the amount entered on this line.
and may include, but is not limited to, compensation, rents and roy-
Line 5 – Schedule F, Profi t or Loss From Farming
alties from real or tangible personal property, capital gains, interest,
Enter on this line the amount on your federal 1040, line 18. If the
dividends, distributions, patent or copyright royalties, and lottery win-
amount entered is negative, place a negative sign (“-“) in the box
nings, prizes and awards (R.C. 5747.01(C)). Nonbusiness income
provided.
should be excluded from the fi gures reported on this schedule.
Line 6 – Other Business Income
See Kemppel v. Zaino, 91 Ohio St.3d 420 (2001).
Enter on this line any items of business income or loss included in
Business Income From IRS Schedules (Part 1) your federal adjusted gross income that were not entered on lines
1 through 5. Include on this line any amounts reported on federal
Important: Include on all lines only those items of business in- 4797 that constitute business income. If the amount entered is
come that are included in the calculation of federal adjusted gross negative, place a negative sign (“-”) in the box provided.
income. For example, losses that must be carried forward to future
years due to federal rules should not be included on this schedule For information about miscellaneous federal tax adjustments, see
for the current year. A taxpayer cannot simply list the amounts on our Web site at www.tax.ohio.gov/other/Update.aspx.
these federal schedules on Ohio IT BUS.
Business Income Deduction (Part 2)
Line 1 – Schedule B, Interest and Ordinary Dividends
Line 8 – All Business Income
Enter on this line only taxable interest and ordinary dividends
Enter on this line the lesser of line 7 from this schedule or your
reported on federal Schedule B that qualify as business in-
federal adjusted gross income (Ohio IT 1040, line 1).
come. Generally, interest and dividend income can only qualify
as business income if it is generated from the regular course of If the amount entered on line 8 of this schedule is -0- or nega-
trade or business (i.e., the primary business purpose is invest- tive, stop here and do not complete the rest of the schedule.
ing) or if it is generated from working capital and reinvested into You do not have a business income deduction or any taxable
the business. business income.
- 1 -
|