2009
              Schedule C-2                                                                                                                                                                Massachusetts
              Excess Deductions Department of
                                                                                                                                                                                          Revenue
              Against Trade or Business Income

Generally, taxpayers may not use excess 5.3% deductions to      • these excess deductions may only be used to offset income
offset interest (other than from Massachusetts banks), dividendswhich is effectively connected with the active conduct of a
and capital gains income. However, where the taxpayer files a   trade or business or any income allowed under IRC, Section
Massachusetts Schedule C or a Massachusetts Schedule E,         469(d)(1)(B) to offset (losses) from passive activities.
Massachusetts law allows such offsets if the following require-
                                                                To determine if you have excess deductions, complete lines 1
ments are met:
                                                                through 6. If line 6 is “0” or greater, you have no excess deduc-
• the excess 5.3% deductions must be adjusted gross income      tions. If line 6 is less than “0,” you have excess deductions and
 deductions allowed under MGL Ch. 62, section 2(d); and         should complete the remainder of Schedule C-2.

11Total 5.3% income or (loss) (from Form 1, line 10 or 1-NR/PY, line 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
125.3% interest exemption (total Massachusetts bank interest or the interest exemption amount, whichever is smaller, 
  from Form 1, line 5a or line 5b or Form 1-NR/PY, line 7a or line 7b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
13Abandoned Building Renovation Deduction (from Schedule C, line 30; Schedule E, line 56). . . . . . . . . . . . . . . . . . . . . . . . 3
14Combine lines 1, 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
15Additional adjusted gross income deductions (from Form 1 or 1-NR/PY, Schedule Y, total of lines 1 through 10) . . . . . . . . 5
16Subtract line 5 from line 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
17If line 6 is “0” or greater, you have no excess deductions. Omit remainder of schedule. If line 6 is less than “0,” 
  enter in lines 7a and 7b any of the following amounts included in Schedule B, lines 10 through 12:
  a12% capital gains effectively connected with the active conduct of your trade or business (attach statement 
   substantiating such claim) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7a
  b12% capital gains from passive activities allowed to offset (losses) from passive activities in the current 
   taxable year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7b
  Add lines 7a and 7b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
18Allowable deduction. Enter the smaller of line 6 (considered as a positive amount) or line 7 here and on 
  Schedule B, line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
19Combine lines 6 and 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10If line 9 is “0” or greater, you have no excess deductions. Omit remainder of schedule. If line 9 is less than “0,” 
  enter in lines 10a and 10b any of the following amounts included in Schedule B, line 4:
  aInterest (other than from Massachusetts banks) and dividends effectively connected with the active conduct of 
   your trade or business (attach statement substantiating such claim) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10a
  bInterest (other than from Massachusetts banks) and dividends from passive activities allowed to offset (losses) 
   from passive activities in the current taxable year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10b
  Add lines 10a and 10b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11Allowable deduction. Enter the smaller of line 9 (considered as a positive amount) or line 10 here and on
  Schedule B, line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12Combine lines 9 and 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13If line 12 is “0” or greater, you have no excess deductions. Omit remainder of schedule. If line 12 is less than “0,” 
  enter in lines 13a and 13b any of the following amounts included in Schedule D:
  aLong-term capital gains effectively connected with the active conduct of your trade or business (attach 
   statement substantiating such claim) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13a
  bLong-term capital gains from passive activities allowed to offset (losses) from passive activities in the current 
   taxable year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13b
  Add lines 13a and 13b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14Allowable deduction. Enter the smaller of line 12 (considered as a positive amount) or line 13 here and on 
  Schedule D, line 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14