MA Bank Interest

  1. You have chosen to ignore posts from hankduv. Show hankduv's posts

    MA Bank Interest

    Can you exclude MA bank interest on Form 1, line 5 and put it on Schedule B? I have  over $1,700 MA bank interest so if I put it on Line 5 I can only deduct $100 for an exemption.  Because I have a large short-term loss against interest and dividends if I put it on Schedule B  I get to exempt all $1,700. It makes sense but I don't see any information in the instructions that I can do it.  Can I?
     
  2. You have chosen to ignore posts from MASocietyofCPAs. Show MASocietyofCPAs's posts

    Re: MA Bank Interest

    In Response to MA Bank Interest:
    [QUOTE]Can you exclude MA bank interest on Form 1, line 5 and put it on Schedule B? I have  over $1,700 MA bank interest so if I put it on Line 5 I can only deduct $100 for an exemption.  Because I have a large short-term loss against interest and dividends if I put it on Schedule B  I get to exempt all $1,700. It makes sense but I don't see any information in the instructions that I can do it.  Can I?
    Posted by hankduv[/QUOTE]

    Dear hankduv:

    Sorry, but MA categorizes income into three "buckets" and, with two exceptions, they do not mix or cross over.  You've ferreted out the first - the ability to apply capital losses against Non-MA bank interest and dividends, limited to no more than $ 2,000/year (similar to the federal $ 3,000/year capital loss rule) - as with federal rules, MA permits capital losses of one type to fully offset capital gains of another type (short vs. long).  It does not permit rehcaracterization of MA Bank interest as Non-MA bank interest to be able to utilize the capital losses.

    The other "mixiing" relates to business operating losses, which may offset any of MA bank and/or Non-MA bank interest, dividends, short term capital gains or long term capital gains generated by businesses or the sales of business assets (those operating losses, if not used in the year generated, are lost, forever, under MA tax rules, where federal permits a limited carryback, followed by a 20 year carryover).

    Realize, you're talking about $106 of tax savings on $ 2,000 of deductions, using the 5.3% tax rate.

    Hope this helps in preparing your returns!

    Mark H. Misselbeck, C.P.A., M.S.T., Tax Principal
    Katz, Nannis + Solomon, P.C.
     

Share