User talk:Ajeshvnair

On OPI/Local server •        Fill out Absan02/Ausan01 timesheet up to date -  IES specific •        Submit te.opiglobal.com timesheet- Balance days blank •        Clean up the Abnas02/Ausan01/Outlook Personal folder. •        Update the seating plan in ISO folder •        Update the Organization Chart in Absan02 folder. – Manager. Will take care. •        All the books borrowed have been returned to the library.

       On KRemote/Citrix •        Update the TIMEnX tracker in Orion •        Submit TIMEnX - Remember this has to be done before 11.30 AM or after 5.30 PM. In between the website is not available. •        Check in the documents in Orion. •        Clean up the server desktop – All the servers on which the employee has worked •	Clean up C:\and D:\ drives - TEQ files, KAT files etc •        Clean up the Orion Exported folder – On all the servers on which the employee has worked. •        Update EStars – Corp Tax specific •        Collect the list of all the hold returns/FL done by the employee. – IES specific

Risk management Team.

We are having a surprise visit from KPMG Risk management team. Please be conscious of the fact that these are important people who decide whether Q center can be given work or no. Nothing comes to Q without the approval of Risk Management team. If they think that anything is risky or data they are sending us is not with the right people we are all in trouble.

•	It is important that you have locked your system if you are not in your workstation. •	Not be using mobile anywhere close to the production area. •	Always display your ID card with lanyard. Do not leave it on your desktop or keep it in your pockets. •	Don’t be seen sitting in near the landline and relaxing. •	Do not open any files from Absan02/Ausan01. Especially trackers and timesheets. Do not open them at all tomorrow. •	Do not disclose passwords even if they ask you. •	No papers or pens on the workstations or in your pockets.

Sec. 7216 Regulations The AICPA Tax Division has formed a task force to review the impact of final regulations released by Treasury and the IRS in January 2008, involving the disclosure and use of tax return information by tax return preparers under Sec. 7216 (TD 9375). According to Treasury and the IRS, the regulations are designed to “strengthen taxpayers’ ability to control their tax return by requiring that tax return preparers give specific information. . . to allow taxpayers to make knowing, informed, and voluntary decisions over the disclosure or use of their tax information by their preparer” (TD 9375 Preamble). The new (final) regulations have been issued as a follow-up to proposed regulations the Service released about two years ago. In public comments dated March 8, 2006, the AICPA raised three primary concerns about the proposed regulations’ scope. First, it considered the extent to which the regulations fashioned an entirely new consent regime for any return preparation activities involving parties located outside the borders of the United States. Second, the AICPA’s 2006 comments suggested that a civil penalty is a more practical mechanism for regulating a practitioner’s everyday disclosure and use of taxpayer information, as opposed to reliance on a criminal statute such as Sec. 7216. The third concern, as expressed in the 2006 comments, involves tax preparation for U.S multinationals, non-U.S. multinationals, and U.S. citizens (expatriates) located overseas. Typically, a tax professional located in the United States will consult with a tax professional located overseas in order to complete a business’s tax return or an expatriate’s Form 1040, U.S. Individual Income Tax Return. A tax preparer should generally not be required to obtain consent from the taxpayer because the taxpayer in this situation anticipates that his or her tax information will be disclosed outside the United States. In this context, the AICPA stated that it believed adopting the current AICPA professional ethics rules regarding a member’s responsibilities when outsourcing services to third-party service providers is a far more preferable way of dealing with professional services offered by accountants and attorneys across borders. In a March 2006 public hearing on the then-proposed Sec. 7216 regulations, the IRS and Treasury received a large outpouring of concerns from consumer groups—input that was in addition to the testimony presented by the AICPA and other tax professional organizations. The final regulations, as released earlier this year, appear to have taken a middle course by considering many of the privacy concerns raised by the consumer groups while preserving the general notion that taxpayers should retain the right to permit a preparer to disclose tax return information to a third party (or to use tax return information in a certain way) as long as the taxpayer’s consent is knowing, informed, and voluntary. The final regulations contain the following major provisions: •	Within appropriate limits and safeguards, the regulations confirm that the taxpayer continues to maintain the ability and the right to direct a preparer to disclose tax return information as the taxpayer sees fit. •	The regulations clarify that return preparers may disclose return information to the IRS for any purpose. •	The outsourcing of tax return information to a location outside the United States is a permissible disclosure if the taxpayer consents to such disclosure. However, in general, the preparer located inside the United States is not permitted to obtain consent to disclose a taxpayer’s Social Security number to a foreign preparer and a U.S.-based preparer must redact or otherwise mask the number before the return information can be disclosed to an overseas preparer. •	With respect to large corporations and other “large taxpayers,” tax return preparers are permitted to obtain the taxpayer’s consent for the disclosure or use of return information through the use of an engagement letter. •	The Service has released Rev. Proc. 2008-12, which generally complements the final regulations by providing guidance on the content of certain consents to disclose and use tax return information. Anticipating that the regulations could dramatically affect the office operations and procedures of tax return preparers, Treasury and the IRS have established a January 1, 2009, effective date for the regulations, providing preparers one year to make any necessary changes in their professional practices. The AICPA is currently reviewing the final regulations to assess the impact on CPAs’ tax return preparation practices and expects to meet with Treasury and the IRS to obtain clarification on the scope of some of the regulations’ provisions. The AICPA will also assess the impact of the Sec. 7216 regulations on its current professional ethics rules, particularly with respect to the outsourcing of tax return information to a location outside the United States. The current AICPA rules, including Code of Professional Conduct rules 102, 201, 202, and 301, generally provide that before sharing confidential client information (such as a tax return) with a third-party service provider, an AICPA member must inform the client, preferably in writing, that he or she may be using a third-party service provider when providing professional services to the client. In contrast to the AICPA professional ethics rules, Rev. Proc. 2008-12 provides for a specific written consent (wh ich must be signed by the client) before tax return information can be transmitted to the third-party service provider.

Biz Tax – TL & AM Test – July 08 Max Marks 15 Max Time 45 min

Attempt all questions. Write your name and employee no on top of the paper.

1)	A Corporation reports taxable income of $ 200,000 and owes regular income tax on this amount of $61,250. Included in taxable income are tax preference items totaling $100,000, negative AMT adjustments totaling $20,000, and $40,000 positive ACE adjustments. Computes Corporation’s AMT.                     (2 marks)

Corporate Taxable Income	$200,000 Add	Tax Preferences	$100,000 Add	Positive AMT Adjustments	$40,000 Less	Negative AMT Adjustments	($20,000) AMTI	$320,000 Less	AMTI Exemption	$0 AMT Base	$320,000 20% Corporate AMT Rate	$64,000 Regular Income Tax	($61,250) AMT	$2,750

2) A corporation subject to AMT has an AMT base of $60,000. The minimum amount of income tax it will owe for the year is $12000.                   (1 mark)

3)	Mention True or False:                                                             (3 marks) a) If the regular income tax of the corporation exceeds the AMT amount, the corporation will not owe any AMT. - True b) Foreign Corporations need not file consolidated returns. – False c) Controlled groups of corporations are subject to the related parties; transaction rules of Code Sec 267                                 True d) When a subsidiary files a separate return, the short period is taken as a separate taxable year.                                               TRUE e) Income need not be annualized on a short period return resulting from a change of accounting period attributable to a member entering or leaving a consolidated return. TRUE f) In case of fiscal year Corporation, the due dates are 15th day of 3th, 6th, 9th and 12th month for paying estimated tax payments. FALSE

4) Mention any 3 advantages of filing consolidated return.              (3 marks) a) Offsetting operating losses of one company against the profits of another b) Offsetting the capital losses of one company against the capital gains of another c) Avoidance of tax on intercompany distributions d) Deferral of income on intercompany transactions e) Use by the corporate group of the excess of one member’s foreign tax credit over its limitation f) designation of the parent company as agent of the group for all tax purposes.

5) Which of the following items reduces pre-ACE AMTI in arriving at adjusted current earnings?                                                                                         (1 mark) a. The 70% dividends received deduction     b. Expenses related to the production of tax-exempt income     c. 50 percent of meals and entertainment     d. Officers' life insurance premiums on a term insurance policy e. All of the above.

6) Which of the following are not accounted for on a consolidated basis in computing consolidated taxable income?                                                             (1 mark)

a.	The dividends-received deduction b.	Capital gains and losses c.	Section 1231 gains and losses d.	Net operating losses e.	All of the above must be accounted for on a consolidated basis

7) For the current year, P and S file a consolidated return. P has income of $100,000 and S has a loss of $10,000. (Both of these figures are prior to any deduction for charitable contributions.) P and S make contributions of $10,000 and $2,000, respectively. What is the P-S group's allowable charitable contributions deduction?            (1 mark)

a. $12,000                            b. $10,000                             c. $9,000               d. None of the above. The allowable charitable contributions deduction equals ($100,000 - $10,000) x 10% = $9,000.

8) P owns 80 percent of D and 60 percent of E. D owns 40 percent of E. E owns 100 percent of F. All of the corporations constitute includible corporations. Which of the following constitutes an affiliated group?                                                     (1 mark)

a. P and D only b. P, D, and E                      c. P, E, and F                        d. P, D, E and F e. None of the above. 9) P, S1, and S2 file a consolidated return for 2007 on a calendar-year basis. On February 28, 2006, P sells all of the stock of S2 to a group of individuals. On August 31, 2007, P purchases all of the stock of T, which has historically filed its tax return on a calendar-year basis. For 2007, how will the P’s consolidated return look like or in other words what income P will include in its return?                                              (2 marks) P – January 1 through December 31                    TRUE S1 – January 1 through December 31                  TRUE S2 – January 1 through February 28                    TRUE T – September 1 through December 31                TRUE In addition, S2 and T will be required to file separate returns as follows: S2 – March 1 through December 31                     TRUE T – January 1 through August 31             TRUE

Biz Tax – Feb’08 Max Marks 15 Max Time 60 min Attempt all questions. Write your name and employee id on top of the paper. 1)     What would be tax treatment for the following taxes?                 (1.5 marks) a)                  Property Tax Payment - Deductible b)                 Income Tax (State & Local) Payment - Deductible c)                  Federal Income Tax Payment – Non Deductible 2)     Are the amounts paid for the political parties, lobbyists, etc are deductible?                   Non-deductible                                                (1 mark) 3)   Mention True or False for the following                                     (2 marks) a)                 Disallowed portion of meals and entertainment is a negative adjustment due to permanent difference. - False b)                  State municipal bond interest earned is a negative adjustment due to permanent difference. - True c)                 Life Insurance premiums paid for a policy benefiting the partnership is a positive adjustment due to permanent difference. - True d)                  Fines & penalties are deductible under tax return - False 4) In year 2004, XYZ Partnership sold $2000 worth goods to Bankrupt Inc. XYZ Partnership decided to create 10% of the total sales amount as reserve for bad debts. In year 2005, XYZ Partnership has sold another $1000 worth goods to Bankrupt Inc. and created additional provision of another 10% for bad debts on the sale amount. In the year 2006, XYZ Partnership unexpectedly collected $2850 from Bankrupt Inc. Please compute the M-1 adjustment for the year 2004, 2005 & 2006 assuming that for 2006 there was no additional bad debt reserve is created. (Mark will be given only if it is mentioned as positive or Negative)                                                                                           (1.5 Marks) Year 1	M-1	 	  	Reserve at end of year	200 	reserve at beginning of the year	0 	unfavorable M-1	200 Year 2	reserve at the end of the year	300 	Reserve at beginning of the year	200 unfavorable M-1	100 Year 3	Reserve at end of the year	0 Reserve at beginning of the year	300 Favorable M-1	-300 5) ABC Partnership which follows a calendar year. On 3rd Feb 2007 ABC placed an asset worth $555000. It would like to take a sec 179 depreciation deduction of $ 70000 which it is eligible for. Its tax depreciation for current year is as follows: on previous year assets is $87000, on automobile which is used 100% in business is $14000.00 (It is not included in $87000) & $119000 on current year additions. The book of ABC Partnership shows depreciation of $342750.00. What would be the M-1 adjustment for depreciation in the year 2007? (Please show basis of calculation)                                           (1 Mark) Depreciation Calculations	 Sec 179 deduction	70000 Depreciation on PY assets 	87000 Depreciation on Automobile 	14000 Depreciation on CY Additions	119000 Total tax depreciation	290000 Book deprecation	342750 Unfavorable M-1 adjustment	52750 6) ABC Partnership is a calendar year partnership whose TB is given below. Compute Book to Tax for the year 2007 using additional information provided (compute all the relevant M-1’s). (8 Marks) Trial Balance of ABC Partnership for the year end 12/31/2007 Particulars	2006 	2007 Cash	   15,000.00 	     35,000.00 Debtors	   20,000.00 	     25,000.00 Reserve for bad debts	    (5,000.00)	    (12,000.00) Other current assets	   15,000.00 	     20,000.00 Fixed assets	   75,000.00 	    100,000.00 Accumulated Dep. 10,000.00)	   (12,000.00)	  	Other assets (prepaid Rent)	               -   	       5,000.00 	  	Intangible Assets	    15,000.00 	     20,000.00 	  	Accumulated Amort	    (3,000.00)	      (6,000.00)	  	 TOTAL	  122,000.00 	    175,000.00 	  	Accounts Payable	   10,000.00)	    (20,000.00) Other Current Liabilities	  20,000.00)	    (35,000.00)	  	Other Liabilities	   30,000.00)	    (40,000.00) Partners Capital Account	  (62,000.00)	    (62,000.00) Sales	              -   	   (120,000.00) Sales return	              -   	       3,000.00 Freight	              -   	       4,000.00 Materials & Supplies	              -   	     12,000.00 Salaries and wages	              -   	     15,000.00 Repairs and maintenance	              -   	       5,000.00 Bad Debt expenses	              -   	       9,000.00 Rent exp	              -   	       4,000.00 Depreciation Exp	              -   	     15,000.00 Other deductions	              -   	     30,000.00 Taxes Paid	              -   	       5,000.00 TOTAL	 (122,000.00)	  (175,000.00) Additional Information Subsequent Payments Other current liabilities includes as under(For CY)	 	01/1/2008-03/15/2008	03/16/2008-09/15/2008 Utilities	          5,000.00 	 	 	         4,000.00 	         1,000.00 Accrued Comp	          5,000.00 	 	 	         4,000.00 	         1,000.00 Accrued Bonus	          3,000.00 	 	 	         2,000.00 	         1,000.00 Accrued Pension	          2,000.00 	 	 	         1,000.00 	         1,000.00 Other expenses includes below details : Dues and subscriptions: Legacy Golf club membership	4,000.00 Professional Magazine	          1,000.00 American Express	          2,000.00 Fines & Penalties	          1,500.00 Meals and Entertainment	          2,000.00 Political Contribution 	          2,000.00 Insurance premium paid (Partnership beneficiary)	4,000.00 Depreciation as per FAS report for tax	25,000.00 Taxes Paid includes $ 2,000 towards Federal income tax and $ 3,000 towards Sales Tax. Computation of Taxable Income Book	Tax Sales	 (120,000.00)	 (120,000.00) Less	Sales Return	     3,000.00 	      3,000.00 Direct Expenses Material	   12,000.00 	    12,000.00 Freight	     4,000.00 	      4,000.00 Deductions Salary Computation Salary as per TB	   15,000.00 	    15,000.00 Less	Accruals(Comp+Bonus)	 	     2,000.00 Salary & Wages	   15,000.00 	    13,000.00 Taxes Paid as per TB	     5,000.00 	      5,000.00 Less	Federal Inc Tax	 	     2,000.00 Taxes Paid	     5,000.00 	      3,000.00 Rent Paid As per TB	     4,000.00 	      4,000.00 Add Prepaid as per TB	 	     5,000.00 Rent Paid 	     4,000.00 	      9,000.00 Fines & Penalties	     1,500.00 	               - Political Contrbn	     2,000.00 	               - Meals & Entertainment	     2,000.00 	      1,000.00 Insurance Premium	     4,000.00 	               - Depreciation	   15,000.00 	    25,000.00 Bad Debts	     9,000.00 	      2,000.00 Repairs & Mntc	     5,000.00 	      5,000.00 Other Deductions	   13,500.00 	    13,500.00 Legacy golf Membership	     4,000.00 	               - Professional magazine	     1,000.00 	      1,000.00 American Express	     2,000.00 	               - Taxable Income	  (18,000.00)	   (28,500.00) Reconciliation of Income - Book Vs Tax Amount in $ Taxable Income as per Books	   18,000.00 Add	Accruals(Comp+Bonus)	     2,000.00 Add	Federal Income Tax paid	     2,000.00 Add	Meals & Entertainment (50%)	     1,000.00 Add	Bad Debts	     7,000.00 Add	Fines & Penalties	     1,500.00 Add	Political Contrbn	     2,000.00 Add	Insurance Premium	     4,000.00 Add	Legacy Golf Membership	     4,000.00 Add	American Express	     2,000.00 Less	Depreciation	  (10,000.00) Less	Rent Paid	    (5,000.00) Income as per Tax Return	   28,500.00

Dividends-Received Deduction A corporation can deduct a percentage of certain dividends received during its tax year. This section discusses the general rules that apply. For more information, see the instructions for Forms 1120 and 1120-A. Dividends from domestic corporations. A corporation can deduct, within certain limits, 70% of the dividends received if the corporation receiving the dividend owns less than 20% of the corporation distributing the dividend. If the corporation owns 20% or more of the distributing corporation's stock, it can, subject to certain limits, deduct 80% of the dividends received. Ownership. Determine ownership, for these rules, by the amount of voting power and value of the paying corporation's stock (other than certain preferred stock) the receiving corporation owns. Small business investment companies. Small business investment companies can deduct 100% of the dividends received from taxable domestic corporations. Dividends from regulated investment companies. Regulated investment company dividends received are subject to certain limits. Capital gain dividends received from a regulated investment company do not qualify for the deduction. For more information, see section 854 of the Internal Revenue Code. Dividends from a controlled foreign corporation. A corporation can make a one-time election to deduct 85% of the dividends received from a controlled foreign corporation. The corporation may make the election for either its last tax year that begins before October 22, 2004, or its first tax year that begins during the one-year period beginning on October 22, 2004. The corporation makes the election by completing and attaching Form 8895, One-Time Dividends Received Deduction for Certain Cash Dividends from Controlled Foreign Corporations, to its return by the due date (including extensions). This deduction only applies to dividends included in gross income. Form more information on making this election and figuring the deduction, see Form 8895. No deduction allowed for certain dividends. Corporations cannot take a deduction for dividends received from the following entities. 1.	A real estate investment trust (REIT). 2.	A corporation exempt from tax under section 501 or 521 of the Internal Revenue Code either for the tax year of the distribution or the preceding tax year. 3.	A corporation whose stock was held less than 46 days during the 91-day period beginning 45 days before the stock became ex-dividend with respect to the dividend. Ex-dividend means the holder has no rights to the dividend. 4.	A corporation whose preferred stock was held less than 91 days during the 181-day period beginning 90 days before the stock became ex-dividend with respect to the dividend if the dividends received are for a period or periods totaling more than 360 days. 5.	Any corporation, if your corporation is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. Dividends on deposits. Dividends on deposits or withdrawable accounts in domestic building and loan associations, mutual savings banks, cooperative banks, and similar organizations are interest, not dividends. They do not qualify for this deduction. Limit on deduction for dividends. The total deduction for dividends received or accrued is generally limited (in the following order) to: 1.	80% of the difference between taxable income and the 100% deduction allowed for dividends received from affiliated corporations, or by a small business investment company, for dividends received or accrued from 20%-owned corporations, then 2.	70% of the difference between taxable income and the 100% deduction allowed for dividends received from affiliated corporations, or by a small business investment company, for dividends received or accrued from less-than-20%-owned corporations (reducing taxable income by the total dividends received from 20%-owned corporations). For exceptions, see Schedule C on Form 1120 and the Instructions for Forms 1120 and 1120-A. Figuring the limit. In figuring the limit, determine taxable income without the following items. 1.	The net operating loss deduction. 2.	The domestic production activities deduction. 3.	The deduction for dividends received. 4.	Any adjustment due to the nontaxable part of an extraordinary dividend (see Extraordinary Dividends, below). 5.	Any capital loss carryback to the tax year. Effect of net operating loss. If a corporation has a net operating loss (NOL) for a tax year, the limit of 80% (or 70%) of taxable income does not apply. To determine whether a corporation has an NOL, figure the dividends-received deduction without the 80% (or 70%) of taxable income limit. Example 1. A corporation loses $25,000 from operations. It receives $100,000 in dividends from a 20%-owned corporation. Its taxable income is $75,000 ($100,000 - $25,000) before the deduction for dividends received. If it claims the full dividends-received deduction of $80,000 ($100,000 × 80%) and combines it with an operations loss of $25,000, it will have an NOL of ($5,000). Therefore, the 80% of taxable income limit does not apply. The corporation can deduct the full $80,000. Example 2. Assume the same facts as in Example 1, except that the corporation only loses $15,000 from operations. Its taxable income is $85,000 before the deduction for dividends received. After claiming the dividends-received deduction of $80,000 ($100,000 × 80%), its taxable income is $5,000. Because the corporation will not have an NOL after applying a full dividends-received deduction, its allowable dividends-received deduction is limited to 80% of its taxable income, or $68,000 ($85,000 × 80%).

Guaranteed Payments Guaranteed payments are those made by a partnership to a partner that are determined without regard to the partnership's income. A partnership treats guaranteed payments for services, or for the use of capital, as if they were made to a person who is not a partner. This treatment is for purposes of determining gross income and deductible business expenses only. For other tax purposes, guaranteed payments are treated as a partner's distributive share of ordinary income. Guaranteed payments are not subject to income tax withholding. The partnership generally deducts guaranteed payments on line 10 of Form 1065 as a business expense. They are also listed on Schedules K and K-1 of the partnership return. The individual partner reports guaranteed payments on Schedule E (Form 1040) as ordinary income, along with his or her distributive share of the partnership's other ordinary income. Guaranteed payments made to partners for organizing the partnership or syndicating interests in the partnership are capital expenses. Generally, organizational and syndication expenses are not deductible by the partnership. However, a partnership can elect to deduct a portion of its organizational expenses and amortize the remaining expenses (see Business start-up and organizational costs in the instructions for Form 1065). Organizational expenses (if the election is not made) and syndication expenses paid to partners must be reported on the partners' Schedule K-1 as guaranteed payments. Minimum payment. If a partner is to receive a minimum payment from the partnership, the guaranteed payment is the amount by which the minimum payment is more than the partner's distributive share of the partnership income before taking into account the guaranteed payment. Example. Under a partnership agreement, Divya is to receive 30% of the partnership income, but not less than $8,000. The partnership has net income of $20,000. Divya's share, without regard to the minimum guarantee, is $6,000 (30% × $20,000). The guaranteed payment that can be deducted by the partnership is $2,000 ($8,000 − $6,000). Divya's income from the partnership is $8,000, and the remaining $12,000 of partnership income will be reported by the other partners in proportion to their shares under the partnership agreement. If the partnership net income had been $30,000, there would have been no guaranteed payment since her share, without regard to the guarantee, would have been greater than the guarantee. Self-employed health insurance premiums. Premiums for health insurance paid by a partnership on behalf of a partner, for services as a partner, are treated as guaranteed payments. The partnership can deduct the payments as a business expense, and the partner must include them in gross income. However, if the partnership accounts for insurance paid for a partner as a reduction in distributions to the partner, the partnership cannot deduct the premiums. A partner who qualifies can deduct 100% of the health insurance premiums paid by the partnership on his or her behalf as an adjustment to income. The partner cannot deduct the premiums for any calendar month, or part of a month, in which the partner is eligible to participate in any subsidized health plan maintained by any employer of the partner or the partner's spouse. For more information on the self-employed health insurance deduction, see chapter 6 in Publication 535. Including payments in partner's income. Guaranteed payments are included in income in the partner's tax year in which the partnership's tax year ends. Example 1. Under the terms of a partnership agreement, Erica is entitled to a fixed annual payment of $10,000 without regard to the income of the partnership. Her distributive share of the partnership income is 10%. The partnership has $50,000 of ordinary income after deducting the guaranteed payment. She must include ordinary income of $15,000 ($10,000 guaranteed payment + $5,000 ($50,000 × 10%) distributive share) on her individual income tax return for her tax year in which the partnership's tax year ends. Example 2. Lamont is a calendar year taxpayer who is a partner in a partnership. The partnership uses a fiscal year that ended January 31, 2007. Lamont received guaranteed payments from the partnership from February 1, 2006, until December 31, 2006. He must include these guaranteed payments in income for 2007 and report them on his 2007 income tax return. Payments resulting in loss. If guaranteed payments to a partner result in a partnership loss in which the partner shares, the partner must report the full amount of the guaranteed payments as ordinary income. The partner separately takes into account his or her distributive share of the partnership loss, to the extent of the adjusted basis of the partner's partnership interest.

I      II             III                IV Business Income  Line 3	   50	 	-40	 	-10	 	-10000 Dividend 4	          100	 70     100	70	100	70	 50000	35000

Taxable Income ( Line 28) 150	105	60	42	 90	63	 40000	28000

Lesser of 70% on Div or TI	 70		42 		63 		28000 If 70% of Dividend is     +80          -10              +20             5000 deducted from TI DRD Line 29 b	           70	 	 60	 	 70	 	28000 Income After DRD 30	   80	 	0	 	20	 	15000

Lesser of 70% on Div or TI whichever is less we can claim as divident. —Preceding unsigned comment added by 220.225.192.210 (talk) 09:12, 7 December 2009 (UTC)