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Alabama Free Printable #10 Comm.  Office for 2020 Alabama Investment Interest Expense Deduction

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Investment Interest Expense Deduction
#10 Comm. Office

*XX003449* FORM 4952A Alabama Department of Revenue Investment Interest Expense Deduction 2019 ATTACH TO YOUR TAX RETURN Name(s) as shown on your return Type of return . . . . . . . . . . . . . . អ Identifying number Individual . . . . . . . . . . . . . អ Estate . . . . . . . . . . . . . . . អ Trust 1 Interest expense on investment debts paid or accrued in 2019. (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 Disallowed investment interest expense from 2018 Form 4952A, line 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 Total investment interest expense. Add lines 1 and 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 Net investment income. (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 5 Disallowed investment interest expense to be carried forward to 2020. Subtract line 4 from line 3. If zero or less, enter –0–. . . . . . . 5 6 Investment interest expense deduction. Enter the smaller of line 3 or line 4. (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . ៑ 6 GENERAL INSTRUCTIONS PURPOSE OF FORM Interest expense paid by an individual, estate, or a trust on a loan that is allocable to property held for investment (defined below), may not be fully deductible in the current year. Form 4952A is used to figure the amount of investment interest expense deductible for the current year and the amount, if any, to carry forward to future years. For more details, refer to Federal Publication 550, Investment Income and Expenses. CAUTION: The investment interest deduction for Alabama is computed as if the federal passive income limitation did not exist. Net capital gain from the disposition of investment property is included in investment income for Alabama purposes. WHO MUST FILE If you are an individual, estate, or a trust, and you claim a deduction for investment interest expense, you must complete and attach Form 4952A to your tax return unless all of the following apply: •  Your only investment income was from interest or dividends •  You have no other deductible expenses connected with the production of interest or dividends •  Your investment interest expense is not more than your investment income •  You have no carryovers of investment interest expense from 2018. ALLOCATION OF INTEREST EXPENSE UNDER TEMPORARY FEDERAL REGULATIONS SECTION 1.163-8T If you paid or accrued interest on a loan and you used the proceeds of the loan for more than one purpose, you may have to allocate the interest paid. This is necessary because of the different rules that apply to investment interest, personal interest, trade or business interest, and home mortgage interest. See Federal Publication 550, Investment Income and Expenses. SPECIFIC INSTRUCTIONS LINE 1 – INVESTMENT INTEREST EXPENSE Enter the investment interest paid or accrued during the tax year, regardless of when the indebtedness was incurred. Include interest paid or accrued on a loan (or part of a loan) that is allocable to property held for investment. Be sure to include investment interest expense reported to you on Schedule K-1 from a partnership or an S corporation. Include amortization of bond premium on taxable bonds purchased after October 22, 1986, but before January 1, 1988, unless you elected to offset amortizable bond premium against the interest payments on the bond. A taxable bond is a bond on which the interest is includible in gross income. Investment interest expense does not include the following: •  Home mortgage interest, •  Any interest expense that is capitalized, such as construction interest subject to Federal Section 263A. LINE 4 –  NET INVESTMENT INCOME Net investment income is the excess, if any, of investment income over investment expenses. Include investment income and expenses reported to you on Schedule K-1 from a partnership or an S corporation. Also, include net investment income from an estate or a trust. INVESTMENT INCOME Investment income includes income (not derived in the ordinary course of a trade or business) from interest, dividends (reduced by qualified dividends per federal instructions), annuities, royalties, and net gain from the disposition of property held for investment (including capital gain distributions from mutual funds). PROPERTY HELD FOR INVESTMENT Property held for investment includes property that produces investment income. Property held for investment also includes an interest in an activity of conducting a trade or business in which you did not materially participate. INVESTMENT EXPENSES Investment expenses are your allowed deductions, other than interest expense, directly connected with the production of investment income. For example, depreciation or depletion allowed on assets that produce investment income is an investment expense. If you have investment expenses that are included as a miscellaneous itemized deduction on line 21 of Schedule A (Form 40), or line 26 of Schedule A (Form 40NR), you may not have to use all of the amount for purposes of line 4 of Form 4952A. The 2% adjusted gross income limitation on Schedule A may reduce the amount. To figure the amount to use, compare the amount of the investment expenses included on line 21 of Schedule A (Form 40) with the total miscellaneous expenses on line 24 of Schedule A. If you filed Schedule A (Form 40NR), compare the amount on line 26 with the amount on line 29. The smaller of the investment expenses included on line 21 (or line 26) or the total of line 24 (or line 29) is the amount to use to figure the investment expenses from Schedule A for line 4. Example: Assume line 21 of Schedule A (Form 40) includes investment expenses of $3,000, and line 24 is $1,300 after the 2% adjusted gross income limitation. Investment expenses of $1,300 are used to figure the amount of investment expense for line 4. If investment expenses of $800 were included on line 21 and line 24 was $1,300, investment expenses of $800 would be used. If you have investment expenses reported on a form or schedule other than Schedule A, include those expenses when figuring investment expenses for line 4. LINE 6 –  INVESTMENT INTEREST EXPENSE DEDUCTION This is the amount you may deduct as investment interest expense. INDIVIDUALS Enter the amount from line 6 on line 13 of Schedule A (Form 40 or 40NR), even if all or part of it is attributable to a partnership or an S corporation. However, if any portion of this amount is attributable to royalties, enter that portion of the interest expense on Schedule E (Form 40 or 40NR). ESTATES AND TRUSTS Enter on Form 41, Page 3, Schedule C, Column C, Line 10.
Extracted from PDF file 2019-alabama-form-4952a.pdf, last modified July 2019

More about the Alabama Form 4952A Corporate Income Tax TY 2019

This form is for those who invested in a corporation or property to get a tax deduction based upon their expenses for investing.

We last updated the Investment Interest Expense Deduction in March 2020, so this is the latest version of Form 4952A, fully updated for tax year 2019. You can download or print current or past-year PDFs of Form 4952A directly from TaxFormFinder. You can print other Alabama tax forms here.

Other Alabama Corporate Income Tax Forms:

TaxFormFinder has an additional 47 Alabama income tax forms that you may need, plus all federal income tax forms.

Form Code Form Name
Form 41 Fiduciary Income Tax Return
Form FDT-V Fiduciary Income Tax Payment Voucher
Form 20C-C Alabama Consolidated Corporate Income Tax Return
Form 65 Partnership / Limited Liability Company Return of Income
Form 20C Alabama Corporation Income Tax Return

Download all AL tax forms View all 48 Alabama Income Tax Forms


Form Sources:

Alabama usually releases forms for the current tax year between January and April. We last updated Alabama Form 4952A from the Department of Revenue in March 2020.

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About the Corporate Income Tax

The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.

Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).

Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.

Historical Past-Year Versions of Alabama Form 4952A

We have a total of nine past-year versions of Form 4952A in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:


2019 Form 4952A

#10 Comm. Office

2018 Form 4952A

#10 Comm. Office


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