Tennessee Franchise and Excise Financial Institution Captive Real Estate Investment Trust Tax Return

Franchise and Excise Financial Institution Captive Real Estate Investment Trust Tax Return
FAE174 - Franchise and Excise Financial Institution and Captive Real Estate Investment Trust Tax Return
TENNESSEE DEPARTMENT OF REVENUE

RV-R0012001 (10/19)

Franchise and Excise Financial Institution and
Captive Real Estate Investment Trust Tax Return

FAE
174

Tax Year Beginning

Account Number

Tax Year Ending

FEIN

NAICS

SOS Control Number

Check all that apply:
a)	 Amended return
b)	 Final return

Legal Name

Mailing Address

f)	 Annualized income installment method
for quarterly estimates election
g)	 Taxpayer has filed for federal extension

City

State

c)	 Captive REIT not owned by a bank, bank
holding company or public REIT
d)	 Taxpayer has made an election to
calculate net worth per the provisions of
Tenn. Code Ann. § 67-4-2103(g)-(i)
e)	 Taxpayer has filed the prescribed form
to revoke its election made per Tenn.
Code Ann. § 67-4-2103(g)-(i)

ZIP Code

Date Tennessee operations began (see instructions)

Schedule A ‑ Computation of Franchise Tax
	
	
	
	
	
	
	
	

Round to the nearest dollar
1. 	Total net worth from Schedule F1, Line 3 or Schedule F2, Line 3 and Schedule F................................................... (1)	 _______________________________________
2.	 Total real and tangible personal property from Schedule G, Line 15......................................................................... (2)	 _______________________________________
3.	 Franchise tax (25¢ per $100 or major fraction thereof on the greater of Lines 1 or 2; minimum $100) .............. (3)	 _______________________________________

Schedule B ‑ Computation of Excise Tax
4.	 Income subject to excise tax from Schedule J, Line 37................................................................................................. (4)	
5. 	Excise tax (6.5% of Line 4) ............................................................................................................................................... (5)	
6.	 Recapture of tax credit (from Schedule T, Line 13)....................................................................................................... (6)	
7.	 Total excise tax due (add Lines 5 and 6) ........................................................................................................................ (7)	

_______________________________________
_______________________________________
_______________________________________
_______________________________________

Schedule C ‑ Computation of Total Tax Due or Overpayment
	

	 8.	 Total franchise and excise taxes (add Lines 3 and 7).............................................................. 	(8)	
_______________________________________
	 9.	 Total credit from Schedule D, Line 9 (cannot exceed Line 8)................................................. 	(9)	
_______________________________________
	 10.	 Net tax (subtract Line 9 from Line 8; if Line 9 exceeds Line 8, enter zero here)................. 	(10)	
_______________________________________
	 11.	 Total payments from Schedule E, Line 7.................................................................................. 	(11)	
_______________________________________
	 12.	 Penalty (see instructions) .......................................................................................................... 	(12)	
_______________________________________
	 13.	 Interest (see instructions) .............................................................................................................................................. (13)	 _______________________________________
	 14.	 Penalty on estimated franchise and excise tax payments ........................................................................................ (14)	 _______________________________________
	 15.	 Interest on estimated franchise and excise tax payments ....................................................................................... (15)	 _______________________________________
	 16.	 Total amount due (overpaid) (add Lines 10, 12, 13, 14, and 15, subtract Line 11) ................................................. (16)	 _______________________________________
		 If overpayment reported on Line 16, complete A and/or B below:
	 A. Credit to next year’s tax $_______________________________________	 B. Refund $________________________________
Under penalties of perjury, I declare that I have examined this report, and to the best of my knowledge
Power of Attorney - Check YES if this taxpayer's and belief, it is true, correct, and complete.
signature certifies that this tax preparer has
Date
Title
the authority to execute this form on behalf Taxpayer's Signature
of the taxpayer and is authorized to receive
and inspect confidential tax information and Tax Preparer's Signature
Date
Telephone
Preparer's PTIN
to perform any and all acts relating to respective tax matters.	 	
Preparer's Address
ZIP Code
State
City
YES
Preparer's Email Address

FOR OFFICE USE ONLY

page 2

Taxable Year

Account No./FEIN

Taxpayer Name

Schedule D - Schedule of Credits
	
	
	
	
	
	
	
	
	

1.	
2.	
3.	
4.	
5.	
6.	
7.	
8.	
9.	

Gross Premiums Tax Credit (cannot exceed Schedule C, Line 8)................................................................. (1)	 ______________________________
Tennessee income tax (cannot exceed Schedule B, Line 5).......................................................................... (2)	 ______________________________
Community Investment Credit......................................................................................................................... (3)	 ______________________________
Tennessee Rural Opportunity Fund Credit..................................................................................................... (4)	 ______________________________
Tennessee Small Business Opportunity Fund Credit .................................................................................... (5)	 ______________________________
Industrial Machinery and Research and Development Tax Credit from Schedule T, Line 11................... (6)	 ______________________________
Job Tax Credit from Schedule X, Line 46.......................................................................................................... (7)	 ______________________________
Additional Annual Job Tax Credit from Schedule X, Line 38.......................................................................... (8)	 ______________________________
Total credit (add Lines 1 through 8; enter here and on Schedule C, Line 9)............................................... (9)	 ______________________________

Schedule E - Schedule of Required Quarterly Installments and Payments

	
	
	
	
	
	
	

1.	
2.	
3.	
4.	
5.	
6.	
7.	

Required Quarterly
Installments
Amount Paid
Overpayment from previous year, if available............................................................................................ 	(1)______________________________
First quarterly estimate............................................................................... (2a)	 _________________________	(2b)_____________________________
Second quarterly estimate.......................................................................... (3a)	 _________________________	(3b)_____________________________
Third quarterly estimate.............................................................................. (4a)	 _________________________	(4b)_____________________________
Fourth quarterly estimate........................................................................... (5a)	 _________________________	(5b)_____________________________
Extension payment......................................................................................................................................... 	(6)______________________________
Total payments (add Lines 1 through 6; enter here and on Schedule C, Line 11).................................. 	(7)______________________________

Computation of Franchise Tax

Schedules F and SF are used by taxpayers that have not made the consolidated net worth election and by members that were part of a
group that made the election, but exited that group during the taxable year due to a sale, merger, or like event. The ratios computed on
Schedule SF are used to compute the franchise tax base reported on Schedule F.

Schedule F - Non-Consolidated Net Worth
Parent or Unitary Group Member Name

FEIN

Net
Worth

Indebtedness

Everywhere Ratio from Tennessee
Total
Total
Schedule SF

Total (Enter here and on Schedule A, Line 1)............................................................................................................................................

Schedule SF - Franchise Tax Apportionment - Standard
Parent or Unitary Group Member Name

FEIN

Tennessee
Receipts

Everywhere
Receipts

Ratio

Schedule F1 - Captive Real Estate Investment Trust Net Worth
1.	 Net worth (total assets less total liabilities)..................................................................................................... (1)	 _______________________________
%
	 2.	 Franchise tax apportionment ratio (Schedule N if applicable or 100%)...................................................... (2)	 _______________________________
	 3.	 Total (multiply Line 1 by Line 2; enter here and on Schedule A, Line 1)...................................................... (3)	 _______________________________
	

Schedule F2 - Consolidated Net Worth

1.	 Consolidated net worth (total assets less total liabilities of the affiliated group)...................................... (1)	 _______________________________
%
	 2.	 Franchise tax apportionment ratio (Schedule 174SC or 174NC).................................................................. (2)	 _______________________________
	 3.	 Total (multiply Line 1 by Line 2; enter here and on Schedule A, Line 1)...................................................... (3)	 _______________________________
	

page 3

Taxable Year

Taxpayer Name

Account No./FEIN

Schedule G - Determination of Real and Tangible Property
	

Book Value of Property Owned - Cost less accumulated depreciation		
In Tennessee

	 1.	Land..................................................................................................................................................................... (1)	 ______________________________
	 2.	 Buildings, leaseholds, and improvements...................................................................................................... (2)	 ______________________________
	 3.	 Machinery, equipment, furniture, and fixtures.............................................................................................. (3)	 ______________________________
	 4.	 Automobiles and trucks..................................................................................................................................... (4)	 ______________________________
	 5.	 Prepaid supplies and other tangible personal property .............................................................................. (5)	 ______________________________
	 6.	 Ownership share of real and tangible property of a partnership that does not file a return ................. (6)	 ______________________________
	 7.	 a. Inventories and work in progress............................................................................................................. (7a)	 ______________________________
		 b. Exempt inventory in excess of $30 million .............................................................................................(7b)	 ______________________________
	 8.	 Certified pollution control equipment (include copy of certificate) ............................................................ (8)	 ______________________________
	 9.	 Exempt required capital investments ............................................................................................................. (9)	 ______________________________
	10.	 Subtotal (add Lines 1 through 7a, subtract Lines 7b through 9)................................................................ (10)	 ______________________________

	
	
	
	
	
	
	

Rental Value Of Property Used But Not Owned
			
In Tennessee
		Net Annual Rental Paid for:
x8
	11.	 Real property............................................................................................... 	 ______________________ 	(11)	
______________________________ 	
x3
	12.	 Machinery and equipment used in manufacturing and processing..... 	 ______________________ 	(12)	
______________________________ 	
x2
	13.	 Furniture, office machinery, and equipment........................................... 	 ______________________ 	(13)	
______________________________ 	
x1
	14.	 Delivery or mobile equipment................................................................... 	 ______________________ 	(14)_
15.		 Tennessee total (add Lines 10 through 14; enter here and on Schedule A, Line 2)................................. (15)	 ______________________________ 		
.

Schedule H - Gross Receipts

	 1.	 Gross receipts or sales per federal income tax return................................................................................. (1)	 ______________________________

page 4

Taxable Year

Taxpayer Name

Account No./FEIN

Computation of Excise Tax
Schedule J1 - Computation of Net Earnings for Entities Treated as Partnerships
	
Additions:
	 1.	 Ordinary income or loss (federal Form 1065, Line 22)........................................................................................(1)	 ___________________________
	 2.	 Income items specifically allocated to partners, including guaranteed payments to partners ....................(2)	 ___________________________
	 3.	 Any net loss or expense distributed to a publicly traded REIT ..........................................................................(3)	 ___________________________
	 4.	 Total additions (add Lines 1 through 3).................................................................................................................(4)	 ___________________________
		
Deductions:
	 5.	 Expense items specifically allocated to partners not deducted elsewhere......................................................(5)	 ___________________________
	 6.	 Amount subject to self-employment taxes distributable or paid to each partner or member net of
		 any pass-through expense deducted elsewhere on this return (if negative, enter zero) (include on
		 Schedule K, Line 3)...................................................................................................................................................(6)	 ___________________________
	 7.	 Amount of contribution to qualified pension or benefit plans of any partner or member, including
all IRC 401 plans (include on Schedule K, Line 3)................................................................................................(7)	 ___________________________
	 8.	 Any net gain or income distributed to a publicly traded REIT ..........................................................................(8)	 ___________________________
	 9.	 Any loss on the sale of an asset sold within 12 months after the date of distribution...................................(9)
10.		 Total deductions (add Lines 5 through 9)............................................................................................................(10)	 ___________________________
	11.	 Total (subtract Line 10 from Line 4; enter here and on Schedule J, Line 1)....................................................(11)	 ___________________________

Schedule J2 - Computation of Net Earnings for a Single Member LLC Filing as an Individual
		Additions:
	 1.	 Business Income from federal Form 1040, Schedule C.......................................................................................(1)	 ___________________________
	 2.	 Business Income from federal Form 1040, Schedule D......................................................................................(2)	 ___________________________
	 3.	 Business Income from federal Form 1040, Schedule E.......................................................................................(3)	 ___________________________
	 4.	 Business Income from federal Form 1040, Schedule F.......................................................................................(4)	 ___________________________
	 5.	 Business Income from federal Form 4797............................................................................................................(5)	 ___________________________
	 6.	 Other: federal Form __________ , Schedule ____________ .....................................................................................(6)	 ___________________________
	 7.	 Total additions (add Lines 1 through 6).................................................................................................................(7)	 ___________________________
		Deductions:
	 8.	 Amount subject to self-employment taxes distributable or paid to the single member (if negative, enter
		 zero; include on Schedule K, Line 3).......................................................................................................................(8)	 ___________________________
	 9.	 Total (subtract Line 8 from Line 7; enter here and on Schedule J, Line 1)........................................................(9)	 ___________________________

Schedule J3 - Computation of Net Earnings for Entities Treated as Subchapter S Corporations
		Additions:
	 1.	 Ordinary income or loss (federal Form 1120S, Line 21)......................................................................................(1)	 ___________________________
	 2.	 Income items to extent includable in federal income were it not for "S" status election ..............................(2)	 ___________________________
	 3.	 Total additions (add Lines 1 and 2)........................................................................................................................(3)	 ___________________________
		Deductions:
	 4.	 Expense items to extent includable in federal expenses were it not for "S" status election .........................(4)	 ___________________________
	 5. 	 Any loss on the sale of an asset sold within 12 months after the date of distribution...................................(6)	 ___________________________
	 6.	 Total deductions (add Lines 4 and 5).....................................................................................................................(6)	 ___________________________
	 7.	 Total (subtract Line 6 from Line 3; enter here and on Schedule J, Line 1) ......................................................(7)	 ___________________________

Schedule J4 - Computation of Net Earnings for Entities Treated as Corporations and Other Entities
		
Additions
	 1.	 Taxable income or loss before net operating loss deduction and special deductions (federal
Form 1120, Line 28) and ordinary income or loss (federal Form 1065, Line 22)..............................................(1)	 ___________________________
	 2.	 a. REIT taxable income before net operating loss deduction and special deductions (federal Form
			 1120-REIT, Line 20)...............................................................................................(2a)	_________________________
		 b. REIT deduction for dividends paid (federal Form 1120-REIT, Line 21b)...... (2b)	_________________________
		 c. REIT taxable income after dividends paid deduction (subtract Line 2b from Line 2a).............................. (2c)	 ___________________________
	 3.	 Unrelated business taxable income (federal Form 990-T, Line 30)....................................................................(3)	 ___________________________
	 4.	 Other: federal Form __________ ...............................................................................................................................(4)	 ___________________________
	 5.	 Contribution carryover from prior period(s).........................................................................................................(5)	 ___________________________
	 6.	 Capital gains offset by capital loss carryover or carryback.................................................................................(6)	 ___________________________
	 7.	 Total additions (add Lines 1 through 6) ................................................................................................................(7)	 ___________________________
		Deductions:
	 8.	 Contributions in excess of amount allowed by federal government.................................................................(8)	 ___________________________
	 9.	 Portion of current year’s capital loss not included in federal taxable income.................................................(9)	 ___________________________ 	
	10.	 Total deductions (add Lines 8 and 9)...................................................................................................................(10)	 ___________________________ 	
	11.	 Total (subtract Line 10 from Line 7; enter here and on Schedule J, Line 1)....................................................(11)	 ___________________________

page 5

Taxable Year

Taxpayer Name

Account No./FEIN

Schedule J - Computation of Net Earnings Subject to Excise Tax
	 1.	 Adjusted federal income or loss (enter amount from Schedule J1, J2, J3, or J4).................................................(1)	 ___________________________
	 2.	 Expenses from transactions between members of the group.............................................................................(2)	 ___________________________
	 3.	 Dividends and receipts from transactions between members of the group.....................................................(3)	 ___________________________
	 4.	 Net income for group (add Lines 1 and 2, subtract Line 3)...................................................................................(4)	 ___________________________
		Additions:
	 5.	 Intangible expenses paid, accrued or incurred to an affiliated business entity or entities deducted for
	
	federal income tax purposes....................................................................................................................................(5)	 ___________________________
	 6.	 Any depreciation under the provisions of IRC Section 168 not permitted for excise tax purposes due to
		 Tennessee permanently decoupling from federal bonus depreciation .............................................................(6)	 ___________________________
	 7.	 Gain on the sale of an asset sold within 12 months after the date of distribution to a nontaxable entity....(7)	 ___________________________
	 8.	 Tennessee excise tax expense (to the extent reported for federal purposes)...................................................(8)	 ___________________________
	 9.	 Gross premiums tax deducted in determining federal income and used as an excise tax credit...................(9)	 ___________________________
	10.	 Interest income on obligations of states and their political subdivisions, less allowable amortization.......(10)	 ___________________________
	11.	 Depletion not based on actual recovery of cost...................................................................................................(11)	 ___________________________
	12.	 Excess fair market value over book value of property donated........................................................................(12)	 ___________________________
	13.	 Excess rent to/from an affiliate. A taxpayer paying excess rent enters a positive amount on this line.
		 A taxpayer receiving excess rent, to the extent added back to net earnings by its affiliate, enters a
		 negative amount on this line..................................................................................................................................(13)	 ___________________________
	14.	 Captive REIT Dividends Paid Deduction taken in computing federal income (does not apply to a captive
		 REIT that is owned, directly or indirectly, by a bank, bank holding company or a public REIT)......................(14)	 ___________________________
	15.	 Net loss or expense received from a pass-through entity subject to the excise tax (attach schedule)........(15)	 ___________________________ 	
	16.	 An amount equal to five percent of IRC Section 951A global intangible low-taxed income
		 deducted on Line 29................................................................................................................................................(16)	 ___________________________
17.	Total additions (add Lines 5 through 16).................................................................................................................(17)	 ___________________________
		
Deductions:
	18.	 Any depreciation under the provisions of IRC Section 168 permitted for excise tax purposes due to
		 Tennessee permanently decoupling from federal bonus depreciation............................................................(18)	 ___________________________
	19.	 Any excess gain (or loss) from the basis adjustment resulting from Tennessee permanently decoupling
		 from federal bonus depreciation...........................................................................................................................(19)	 ___________________________
	20.	 Dividends received from corporations, at least 80% owned .............................................................................(20)	 ___________________________
	21.	 Donations to qualified public school support groups and nonprofit organizations ......................................(21)	 ___________________________
	22.	 Any expense, other than income taxes, not deducted in determining federal taxable income for which
		 a credit against the federal income tax is allowable............................................................................................(22)	 ___________________________
	23.	 Adjustments related to the safe harbor lease election.......................................................................................(23)	 ___________________________
	24.	 Nonbusiness earnings (from Schedule M, Line 8)................................................................................................(24)	 ___________________________
	25.	 Intangible expenses paid, accrued or incurred to an affiliated entity or entities (from Form IE, Line 4)
		 Attach From IE - Intangible Expense Disclosure...................................................................................................(25)	 ___________________________
26.		 Intangible income from an affiliated business entity or entities if the corresponding intangible
		 expenses have not been deducted by the affiliate(s) under Tenn. Code Ann. § 67-4-2006(b)(2)(N).............(26)	 ___________________________
	27.	 Bad debts not deducted but allowed by IRC Section 585 or 593 as it existed on December 31, 1986.........(27)	 ___________________________
	28.	 Net gain or income received from a pass-through entity subject to the excise tax (attach schedule).........(28)	 ___________________________
	29.	 IRC Section 951A global intangible low-taxed income.........................................................................................(29)	 ___________________________
	30.	 Grants from governmental units to the extent included in federal taxable income.......................................(30)	 ___________________________
	31.	 Total deductions (add Lines 18 through 30).........................................................................................................(31)	 ___________________________
		
Computation of Taxable Income:
	32.	 Total business income (loss) (add Lines 4 and 17, subtract Line 31; if loss, complete Schedule K)...............(32)	 ___________________________
%
	33.	 Excise tax apportionment ratio (Schedule SE or N, if applicable, or 100%)......................................................(33)	 ___________________________
	34.	 Apportioned business income (loss) (multiply Line 32 by Line 33)....................................................................(34)	 ___________________________
	35.	 Nonbusiness earnings directly allocated to Tennessee (from Schedule M, Line 9).........................................(35)	 ___________________________
	36.	 Loss carryover from prior years (from Schedule U).............................................................................................(36)	 ___________________________
	37.	 Subject to excise tax (add Lines 34 and 35, subtract Line 36; enter here and on Schedule B, Line 4)..........(37)	 ___________________________

Schedule K - Determination Of Loss Carryover Available

	 1.	 Net loss from Schedule J, Line 32.............................................................................................................................(1)	 ___________________________
		
Additions:
	 2.	 Amounts reported on Schedule J, Lines 20 and 24 ...............................................................................................(2)	 ___________________________
	 3.	 Amounts reported on Schedule J1, Lines 6 and 7, or Schedule J2, Line 8...........................................................(3)	 ___________________________
	 4.	 Reduced loss (add Lines 1 through 3; if net amount is positive, enter zero)......................................................(4)	 ___________________________
%
	 5.	 Excise tax apportionment ratio (Schedule SE or N, if applicable, or 100%)........................................................(5)	 ___________________________
	 6.	 Current year loss carryover available (multiply Line 4 by Line 5).........................................................................(6)	 ___________________________

page 6

Taxpayer Name

Taxable Year

Account No./FEIN

Schedule SE - Financial Institution Apportionment Schedule for Excise Tax Purposes
In Tennessee

Everywhere

	 1.	Receipts from leases of real property............................................................................... (1)	 __________________________________________________

	 2.	Interest income and other receipts from loans or installment sales secured by
real or tangible personal property..................................................................................... (2)	 __________________________________________________
	 3.	Interest income and other receipts from consumer loans which are not secured..... (3)	 __________________________________________________
	 4.	Interest income and receipts from commercial and installment loans which are
not secured by real or tangible property.......................................................................... (4)	 __________________________________________________
	 5.	Receipts and fee income from letters of credit, acceptance of drafts, and other
	devices for guaranteeing loans or credit........................................................................... (5)	 __________________________________________________
	 6.	Interest income, merchant discount, and other receipts including service charges
from credit card and travel and entertainment credit cards, and credit
cardholders’ fees................................................................................................................... (6)	 __________________________________________________
	 7.	Sales of an intangible or tangible asset............................................................................. (7)	 __________________________________________________
	 8.	Receipts from the sale of a security by a dealer in such security.................................. (8)	 __________________________________________________
	 9.	Receipts from fiduciary and other services...................................................................... (9)	 __________________________________________________
	10.	Receipts from the issuance of travelers checks, money orders and U.S.
savings bonds..................................................................................................................... (10)	 __________________________________________________
	11.	Interest income and other receipts from participation loans...................................... (11)	 __________________________________________________
	12.	Other business receipts..................................................................................................... (12)	 __________________________________________________
	13.	Total receipts (add Lines 1 through 12)........................................................................... (13)	 __________________________________________________
%
	14.	Apportionment ratio (divide total Tennessee receipts by total everywhere
		receipts; enter here and on Schedule J, Line 33)..................................................................................................... (14)	 __________________________

Schedule N - Apportionment - Captive REITS
	

Property	

	 Use original cost of assets
	

In Tennessee (Combined)	
a. Beginning of Taxable Year

b. End of Taxable Year

Total Everywhere (Combined)
a. Beginning of Taxable Year

b. End of Taxable Year

	 1.	 Land, buildings, leaseholds, and
		improvements ........................................... 	 ________________________________________________________________________________________________ 	
	 2.	 Machinery, equipment, furniture, and
		 fixtures........................................................ 	 _____________________________________________________________________________________________________________
	 3. 	Automobiles and trucks............................ 	 ________________________________________________________________________________________________
	 4.	 Inventories and work in progress ........... 	 ________________________________________________________________________________________________
	 5.	 Prepaid supplies and other property...... 	 ________________________________________________________________________________________________
	 6.	 Ownership share of real and tangible
		 property of a partnership that does not
		 file a return ................................................ 	 ________________________________________________________________________________________________
	 7.	 Total (add Lines 1 through 6) .................. 	 ________________________________________________________________________________________________
	 8.	 Average value (add Lines 7(a) & (b),
		 divide by two)............................................. 	 ________________________________________________________________________________________________
	 9.	 Rented property (rent paid x 8)............... 	 _______________________________________________________________________________________________

Use triple weighted sales factor

a. In Tennessee

b. Total Everywhere

c. Franchise Ratio

d. Excise Ratio

					
%	
%
	 10.	
Property factor (add Lines 8 and 9)......... 	 _______________________________________________________________________________________________
					
%	
%
	 11.
	Payroll factor.............................................. 	 _______________________________________________________________________________________________
					
%	
%
	 12.	
Sales factor (business gross receipts)..... 	 _______________________________________________________________________________________________
	 Total ratios (add Lines 10, 11 and
	 13.	
					
%	
%
		
(Line 12 x three))........................................ 	 _______________________________________________________________________________________________
	 14.	 Apportionment ratio (divide Line 13 by five, or by the number of factors with
		 everywhere values greater than zero) (Enter franchise ratio to Schedule F1, Line 2.
					
%	
%
		
Enter excise ratio on Schedule J, Line 33.).............................................................................. 	 ________________________________________________

page 7

Taxable Year

Taxpayer Name

Account No./FEIN

Schedule M - Nonbusiness Earnings Allocation
Allocation and apportionment schedules may be used only by taxpayers doing business outside the state of Tennessee within the meaning
of Tenn. Code Ann. §§ 67-4‑2010 and 67‑4‑2110. The burden is on the taxpayer to show that the taxpayer has the right to apportion.
If all earnings are business earnings as defined below, do not complete this schedule. Any nonbusiness earnings, less related expenses,
are subject to direct allocation and should be reported in this schedule.
Definitions:
"Business Earnings" 1) earnings arising from transactions and activity in the regular course of the taxpayer’s trade or business, or
2) earnings from tangible and intangible property if the acquisition, use, management, or disposition of the property constitutes an integral
part of the taxpayer’s regular trade or business operations
Earnings which arise from the conduct of the trade or trades or business operations of a taxpayer are business earnings, and the taxpayer
must show by clear and cogent evidence that particular earnings are classifiable as nonbusiness earnings. A taxpayer may have more than
one regular trade or business in determining whether income is business earnings.
"Nonbusiness Earnings" - all earnings other than business earnings
		
	
Description of Nonbusiness Earnings	
	
(If further description is necessary, see below)	

Gross	
Amounts	

*Less Related	
Expenses	

Net	
Amounts	

Net Amounts
Allocated Directly
to Tennessee

1.	____________________________________________________________________________________________________________________________________________
2.	____________________________________________________________________________________________________________________________________________
3.	____________________________________________________________________________________________________________________________________________
4.	____________________________________________________________________________________________________________________________________________
5.	____________________________________________________________________________________________________________________________________________
6.	____________________________________________________________________________________________________________________________________________
7.	____________________________________________________________________________________________________________________________________________
	8.	____________________________________________________________________________________________________________________________________________
Total nonbusiness earnings (Enter here and on Schedule J, Line 24)			
	 Nonbusiness earnings allocated directly (Enter here and on Schedule J, Line 35)	
9.	____________________________________________________________________________________________________________________________________________
If necessary, describe source of nonbusiness earnings and explain why such earnings do not constitute business earnings as defined above.
Enumerate these items to correspond with items listed above.

*As a general rule, the allowable deductions for expenses of a taxpayer are related to both business and nonbusiness earnings. Items
such as administrative costs, taxes, insurance, repairs, maintenance, and depreciation are to be considered. In the absence of evidence to
the contrary, it is assumed that the expenses related to nonbusiness rental earnings will be an amount equal to 50% of such earnings and
that the expenses related to other nonbusiness earnings will be an amount equal to 5% of such earnings. (see Tenn. Comp. R. & Regs.
1320‑06‑01.23(3)).

page 8

Account No./FEIN

Taxpayer Name

Taxable Year

Schedule T - Industrial Machinery and Research and Development Equipment Tax Credit
Part 1: Tax Credit Computation
Franchise and excise taxes may be reduced by a credit on industrial machinery and research and development equipment purchased during
the tax period covered by the return and located in Tennessee. The credit is generally computed at 1% of the purchase price of qualified
industrial machinery and research and development equipment. The credit taken on any return cannot exceed 50% of the current year’s
franchise and excise tax liability, but any unused credit may be carried forward 15 years under Tenn. Code Ann. § 67-4-2009(3).
	 1.	 Purchase price of industrial machinery and research and development equipment .....................................(1)	 __________________________
%
	 2. 	Percentage allowed (generally 1%*) .......................................................................................................................(2)	 __________________________
	 3. 	Current year credit (multiply Line 1 by Line 2) .......................................................................................................(3)	 __________________________
	 4.	 Credit available from prior year(s) (from Schedule V)...........................................................................................(4)	 __________________________
	 5.	 Total credit available (add Lines 3 and 4) ...............................................................................................................(5)	 __________________________
	 6.	 Franchise and excise tax liability before any credits (add Schedule A, Line 3 and Schedule B, Line 5)...........(6)	 __________________________
	 7. 	Limitation on credit (50% of Line 6) ........................................................................................................................(7)	 __________________________
	 8. 	Franchise and excise tax liability before any credits (add Schedule A, Line 3 and Schedule B, Line 5) ..........(8)	 __________________________
	 9. 	Credits from Schedule D, Lines 1 through 5 and Schedule D, Line 8..................................................................(9)	 __________________________
	10.	 Tax before Industrial Machinery Credit (subtract Line 9 from Line 8) ..............................................................(10)	 __________________________
	11.	 Amount available in current year (enter the smaller value of Lines 5, 7, or 10 here, and on
Schedule D, Line 6) ..................................................................................................................................................(11)	 __________________________

Part 2: Recapture of Tax Credit
The Industrial Machinery Tax Credit previously established on this form must be partially recaptured if the equipment on which it was
based was sold or removed from the state before the end of the equipment’s life as established for federal income tax purposes. The
recapture amount is a percentage of useful life remaining at the time of sale or removal multiplied by the credit originally established
on this form. Previously established credits have either offset tax or populated the carryover table Schedule V. Complete the Industrial
Machinery Credit Recapture Worksheet and then enter the applicable recapture amounts on Lines 12 and 13 below.
12.		 Reduction to credit carryover table, Schedule V, from recapture worksheet, Part 2, Line 16 .....................(12)	 __________________________
	13. 	 Recapture of credit from recapture worksheet, Part 2, Line 17 (enter here and on Schedule B, Line 6).....(13)	 __________________________

*The percentage allowed on Part 1, Line 2 above is 1%, unless the taxpayer has met the requirements of Tenn. Code Ann. § 67-4-2009(3)(I)
and has been approved by the Commissioner of Revenue for an enhanced rate based on the investment amount. The statutory minimum
investment requirements and applicable rates for the enhanced credit are shown on the following chart:
	

Minimum Required Capital Investment	

Rate of Credit	

	$100,000,000	

3%	

	$250,000,000	

5%	

	$500,000,000	
	$1,000,000,000	

7%	
10%	

page 9

Taxable Year

Account No./FEIN

Taxpayer Name

Schedule U - Schedule of Loss Carryover
Net operating losses may be carried forward and used to offset income for up to 15 years or until fully utilized, whichever
occurs first. Tenn. Code Ann. § 67-4-2006(c)(8) requires that loss carryover be reduced by the Tennessee portion of discharge
of indebtedness income excluded from federal gross income under IRC Section 108(a) where the bankruptcy discharge
occurs on or after October 1, 2013. See Excise Tax Report of Bankruptcy Discharge form and the above referenced code
section for more information.
		
	 Year	
		

Period	
Ended	
(MM/YY)	

Original Return or	
as Amended	

Used in 		
Prior Year(s)	
Expired	

Loss Carryover
Available

1
___________________________________________________________________________________________________________________
2
___________________________________________________________________________________________________________________
3
___________________________________________________________________________________________________________________
4
___________________________________________________________________________________________________________________
5
___________________________________________________________________________________________________________________
6
___________________________________________________________________________________________________________________
7
___________________________________________________________________________________________________________________
8
___________________________________________________________________________________________________________________
9
___________________________________________________________________________________________________________________
10
___________________________________________________________________________________________________________________
11
___________________________________________________________________________________________________________________
12
___________________________________________________________________________________________________________________
13
___________________________________________________________________________________________________________________
14
___________________________________________________________________________________________________________________
15
___________________________________________________________________________________________________________________
Total Amount (Enter here and on Schedule J, Line 36)............................................................................. 			
Schedule V - Schedule of Industrial Machinery and Research and Development Equipment Credit Carryover
Industrial Machinery Credit may be carried forward and used to offset franchise and excise tax for up to 15 years or until
fully utilized, whichever occurs first.
		
	 Year	
		

Period				
Ended	
Original Return or	
Used in 		
(MM/YY)	
as Amended	
Prior Year(s)	
Expired or Recaptured	

Industrial Machinery
Credit Carryover
Available

1
________________________________________________________________________________________________________________________________
2
________________________________________________________________________________________________________________________________
3
________________________________________________________________________________________________________________________________
4
________________________________________________________________________________________________________________________________
5
________________________________________________________________________________________________________________________________
6
________________________________________________________________________________________________________________________________
7
________________________________________________________________________________________________________________________________
8
________________________________________________________________________________________________________________________________
9
________________________________________________________________________________________________________________________________
10
________________________________________________________________________________________________________________________________
11
________________________________________________________________________________________________________________________________
12
________________________________________________________________________________________________________________________________
13
________________________________________________________________________________________________________________________________
14
________________________________________________________________________________________________________________________________
15
________________________________________________________________________________________________________________________________
Total Amount (Enter here and on Schedule T, Line 4)..............................................................................