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14. OTHER INCOME.
Enter taxable income not reported on lines 1-13. Attach an explanation of the type of income. Examples of income to be reported on line 14 include:
a. Baby-sitting income not reported on Federal Schedule C or C-EZ.
b. Bonus Depreciation adjustment from the IA 4562A; attach the IA 4562A to your return.
c. Capital gains from installment sales in 2003: Accrual-method taxpayers may now use the installment method for reporting capital gains on their Iowa returns.
d. Cow-Calf refunds received in 2003 (unless reported on Federal Schedule F).
e. Director’s fees
f. Drilling: Intangible drilling costs that were reported on Federal form 6251 less any amounts amortized in the tax year.
g. Executor’s fees
h. Gambling winnings: You must report the full amount of gambling winnings. Report any tax withheld on line 61 of the IA1040. Gambling losses may be reported as an itemized deduction on Schedule A, but you cannot deduct more than the winnings you report.
i. Iowa Educational Savings Plan Trust: Income received from the cancellation of a participation agreement to the extent the amount was previously deducted on line 24 of the IA 1040.
j. Partnership income and/or S Corporation income: Modifications that increased the income.
k. Refunds: State income tax refunds other than Iowa to the extent that the tax refunded in 2003 was deducted on a prior Iowa return.
l. Wells: Percentage depletion from an oil, gas or geothermal well that was reported on Federal form 6251.
m. Other income as reported on line 21 of the Federal 1040.
Distribution from a Coverdell education savings account is reported on line 14 to the extent of the taxable amount reported on line 21 of the Federal 1040.
MARRIED SEPARATE FILERS: The spouse to whom the income was paid must report that income. Modifications to partnership and/or S Corporation income are allocated between spouses in the same manner as that income was divided on line 10, IA1040.
Iowa
did not couple with the following provisions of the
Federal Job Creation and Worker Assistance Act:
a. Bonus Depreciation (updated 09/08/04)
Iowa did not adopt the 30% “bonus depreciation” provisions for assets placed in service after September 10, 2001 but before May 6, 2003. An adjustment will have to be made on form IA 4562A to account for the difference between the Federal depreciation and the Iowa depreciation. The total adjustment for decoupling as calculated on line 5 of Part III of the IA 4562A should be entered on line 14 of the IA 1040 as other income. This amount may need to be added back on several lines or schedules. Attach the IA 4562A to your income tax return.
When figuring your gross income on the IA 1040, you will enter the same figures as on the equivalent lines from the Federal 1040. However, the bonus deprecation adjustment will then be entered on line 14 of the IA 1040 to reflect the effect of decoupling on this issue. Lines 5, 6, 7, 10, and 11 of the IA 1040, which may be impacted by the bonus depreciation issue, will still be the same as the equivalent Federal 1040 entries.
Finally, the bonus depreciation adjustment on line 14 of the IA 1040 may need to be added back on several other schedules or line entries.
b. Net Operating Losses
Iowa did not adopt the provisions for the 5-year carryback for net operating losses incurred in 2001, 2002 and 2003. Therefore, Iowa net operating losses will still be carried back two years, except for losses incurred in presidentially declared disaster areas (3-year carryback) and losses incurred by farm corporations (5-year carryback).
c. Bonus Depreciation and IRC Section 179 (updated 09/08/04)
In a special session held in September 2004, the Iowa legislature passed legislation to couple with the additional 50% first-year depreciation allowance (bonus depreciation) for assets placed in service after May 5, 2003, but before January 1, 2005. In addition, this law also coupled with the increase in Section 179 expensing allowance from $25,000 to $100,000 for tax years beginning on or after January 1, 2003. These provisions were provided in the federal Jobs and Growth Tax Relief Reconciliation Act of 2003.
Previously, the Iowa legislature had decided not to adopt these provisions in Iowa law. For taxpayers who have filed a tax return which reflected either the disallowance of 50% bonus depreciation or the disallowance of the increased Section 179 expensing, amended returns must be filed to reflect this change.
Iowa continues to decouple with the 30% bonus depreciation provision set forth in the federal Job Creation and Worker Assistance Act of 2002. Form IA4562A will still need to be filed for any assets placed in service after September 10, 2001 but before May 6, 2003 to account for the difference in depreciation.
Form 2003 IA4562A has been updated to reflect this change.
In 2003, the Iowa Legislature did adopt provisions allowing deductions up to $1,500 for overnight travel expenses of National Guard and Reserve members, as well as the exclusion from Iowa taxable income of military death gratuity payments and military student loan repayments. These provisions were similar to those set forth in the Military Family Tax Relief Act of 2003. However, other provisions of the Military Family Tax Relief Act of 2003 were not adopted for Iowa tax purposes.