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Hawaii Free Printable Form N-158, Rev. 2019, Investment Interest Expense Deduction for 2020 Hawaii Investment Interest Expense Deduction (Rev. 2015)

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Investment Interest Expense Deduction (Rev. 2015)
Form N-158, Rev. 2019, Investment Interest Expense Deduction

Clear Form Form N-158 (REV. 2019) STATE OF HAWAII — DEPARTMENT OF TAXATION Investment Interest Expense Deduction   Attach to Form N-11, N-15, or N-40 . Social security number or employer identification number Name(s) as shown on return Part I Total Investment Interest Expense 1 Investment interest expense paid or accrued in 2019. See Instructions.................................................................. 1 2 Disallowed investment interest expense from 2018 Form N-158, line 7.................................................................... 2 3 Total investment interest expense. Add lines 1 and 2.......................................................................................... 3 Part II Net Investment Income 4 a Gross income from property held for investment (excluding any net gain from the disposition of property held for investment)..................................................................................................................................... b Net gain from the disposition of property held for investment............................. 4b c Enter the smaller of line 4b or your net capital gain from the disposition of property held for investment............................................................................ 4c 4a d Line 4b minus line 4c................................................................................................................................................. 4d e Enter the amount from line 4c that you elect to include in investment income. See Instructions.............................. 4e f Investment income. Add lines 4a, 4d, and 4e........................................................................................................... 4f 5 Investment expenses. See Instructions.................................................................................................................... 5 6 Net investment income. Line 4f minus line 5. If zero or less, enter -0-.................................................................. 6 Part III 2019 Investment Interest Expense Deduction 7 Disallowed investment interest expense to be carried forward to 2020. Line 3 minus line 6. If zero or less, enter -0- .................................................................................................................................................................... 7 8 Investment interest expense deduction. Enter the smaller of line 3 or line 6. See Instructions......................... 8 General Instructions Who Must File Specific Instructions Section references are to the Internal Revenue Code unless otherwise noted. If you are an individual, estate, or a trust, you must file Form N-158 to claim a deduction for your investment interest expense. Part I — Total Investment Interest Expense Exception. You do not have to file Form N-158 if all of the following apply. Line 1 Note Section 265 (with respect to the nondeductibility of expenses and interest relating to tax-exempt income) shall be operative; except that it shall not apply to expenses and interest for royalties and other income derived from any patents, copyrights, and trade secrets by an individual or a qualified high technology business as defined in section 235-7.3, Hawaii Revised Statutes. Such expenses shall be deductible. •• Your investment income from interest and ordinary dividends is more than your investment interest expense. •• You do not have any other deductible investment expenses. •• You do not have any carryover of disallowed investment interest expense from 2018. Purpose of Form Allocation of Interest Expense Use Form N-158 to figure the amount of investment interest expense you can deduct for 2019 and the amount you can carry forward to future years. Your investment interest expense deduction is limited to your net investment income. If you paid or accrued interest on a loan and used the loan proceeds for more than one purpose, you may have to allocate the interest. This is necessary because different rules apply to investment interest, personal interest, trade or business interest, home mortgage interest, and passive activity interest. See federal Publication 535, Business Expenses. For more information, get federal Publication 550, Investment Income and Ex­penses. N158_I 2019A 01 VID01 ID NO 01 Enter the investment interest expense paid or accrued during the tax year, regardless of when you incurred the indebtedness. Investment interest expense is interest paid or accrued on a loan or part of a loan that is allocable to property held for investment (as defined later). 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 any of the following: •• Home mortgage interest. FORM N-158 Form N-158 (Rev. 2019) •• Interest expense that is properly allocable to a passive activity. Generally, a passive activity is any trade or business activity in which you do not materially participate and any rental activity. See the separate instructions for federal Form 8582, Passive Activity Loss Limitations, for details. •• Any interest expense that is capitalized, such as construction interest subject to section 263A. •• Interest expense related to tax-exempt interest income under section 265. •• Interest expense, disallowed under section 264, on indebtedness with respect to life insurance, endowment, or annuity contracts issued after June 8, 1997, even if the proceeds were used to purchase any property held for investment. Property Held for Investment. Property held for investment includes property that produces income, not derived in the ordinary course of a trade or business, from interest, dividends, annuities, or royalties. It also includes property that produces gain or loss, not derived in the ordinary course of a trade or business, from the disposition of property that produces these types of income or is held for investment. However, it does not include an interest in a passive activity. Exception. A working interest in an oil or gas property that you held directly or through an entity that did not limit your liability is property held for investment, but only if you did not materially participate in the activity. Page 2 Line 4b Net gain from the disposition of property held for investment is the excess, if any, of your total gains over your total losses from the disposition of property held for investment. When figuring this amount, include capital gain distributions from mutual funds and capital loss carryovers. Line 4c Net capital gain from the disposition of property held for investment is the excess, if any, of your net long-term capital gain over your net shortterm capital loss from the disposition of property held for investment. Capital gain distributions from mutual funds are treated as long-term capital gains. Line 4e In general, net capital gain from the disposition of property held for investment is excluded from investment income. But you can elect to include part or all of this amount in investment income. The net capital gain that you elect to include in investment income on line 4e is not eligible to be taxed at the 7.25% maximum capital gains tax rate (Tax on Capital Gains Worksheet in the Form N-11 or Form N-15 Instructions, or Part VI of Schedule D (Form N-40)). You should consider the tax effect of using the capital gains tax rate before making this election. To make the election, enter on line 4e the amount you elect to include in investment income. Line 5 Part II — Net Investment Income See Note on page 1. Line 4a 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. Gross income from property held for investment includes income, unless derived in the ordinary course of a trade or business, from: •• Interest, •• Ordinary dividends (except Alaska Permanent Fund dividends), •• Annuities, and •• Royalties. Include investment income 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. Also include on line 4a (or 4b, if applicable) net passive income from a passive activity of a publicly traded partnership (as defined in section 469(k)(2)). See Notice 88-75, 1988-2 C.B. 386, for details. Net income from certain passive activities, such as rental of substantially nondepreciable property, may have to be recharacterized and included on line 4a. See federal Publication 925, Passive Activity and At-Risk Rules, or Regulations section 1.469-2(f)(10) for details. If you are filing Form N-814, Parent’s Election to Report Child’s Interest and Dividends, part or all of your child’s income may be included on line 4a. See the instructions for Form N-814 for details. Caution: Do not include on line 4a any net gain from the disposition of property held for investment. Instead, enter this amount on line 4b. Include investment expenses reported to you on Schedule K-1 from a partnership or an S corporation. Investment expenses do not include any deductions used in determining your income or loss from a passive activity. If you have investment expenses that are included as a miscellaneous itemized deduction on line 25 of the Itemized Deductions Worksheet in the Form N-11 Instructions, on line 25 of the Itemized Deductions Worksheet - For Nonresidents in the Form N-15 Instructions, or on line 46 of the Itemized Deductions Worksheet - For Part-Year Residents in the Form N-15 Instructions, the 2% adjusted gross income limitation on line 28 of the Itemized Deductions Worksheet in the Form N-11 Instructions, on line 29 of the Itemized Deductions Worksheet - For Nonresidents in the Form N-15 Instructions, or on line 54 of the Itemized Deductions Worksheet - For Part-Year Residents in the Form N-15 Instructions may reduce the amount you must include on Form ­N-158, line 5. Include on Form N-158, line 5, the smaller of: •• The investment expenses included on line 25 of the Itemized Deductions Worksheet in the Form N-11 Instructions, on line 25 of the Itemized Deductions Worksheet - For Nonresidents in the Form N-15 Instructions, or on line 46 of the Itemized Deductions Worksheet - For Part-Year Residents in the Form N-15 Instructions, or •• The total on line 29 of the Itemized Deductions Worksheet in the Form N-11 Instructions, on line 30 of the Itemized Deductions Worksheet For Nonresidents in the Form N-15 Instructions, or on line 55 of the Itemized Deductions Worksheet - For Part-Year Residents in the Form N-15 Instructions Example. Assume line 25 of the Itemized Deductions Worksheet in the Form N-11 Instructions includes investment expenses of $3,000, and line 29 of the Itemized Deductions Worksheet is $1,300 after the 2% adjusted gross income limitation. Investment expenses from the Itemized Deductions Worksheet of $1,300 are used to figure the amount of investment expenses for line 5. If investment expenses of $800 were included on line 25 and line 29 of the Itemized Deductions Worksheet was $1,300, investment expenses from the Itemized Deductions Worksheet of $800 would be used. Part III — Investment Interest Expense Deduction Line 8 You may deduct the amount on line 8 as investment interest expense. Individuals. Generally, enter the amount from line 8 (excluding any amount included on federal Form 6198, line 4 – see below) on line 13 of the Itemized Deductions Worksheet in the Form N-11 Instructions, on line 14 of the Itemized Deductions Worksheet - For Nonresidents in the Form N-15 Instructions, or on line 22 of the Itemized Deduction Worksheet - For Part-Year Residents in the Form N-15 Instructions, even if all or part of it is attributable to a partnership or an S corporation. However, if any part of the interest expense is attributable to royalties, enter that part on federal Schedule E. Also, if any part of the interest is attributable to a trade or business that is not a passive activity, enter that part on the schedule where you report other expenses for that trade or business. Estates and Trusts. Enter the amount from line 8 (excluding any amount included on federal Form 6198, line 4 – see below) on Form N-40, line 10. However, if any part of the interest is attributable to a trade or business that is not a passive activity, enter that part on the schedule where you report other expenses for that trade or business. Federal Form 6198. If any of your deductible investment interest expense is attributable to an activity for which you are not at risk, you must also use federal Form 6198, At-Risk Limitations, to figure your deductible investment interest expense. Include the part attributable to the atrisk activity on federal Form 6198, line 4. See federal Form 6198 and its instructions for details.
Extracted from PDF file 2019-hawaii-form-n-158.pdf, last modified October 2003

More about the Hawaii Form N-158 Individual Income Tax TY 2019

We last updated the Investment Interest Expense Deduction (Rev. 2015) in February 2020, so this is the latest version of Form N-158, fully updated for tax year 2019. You can download or print current or past-year PDFs of Form N-158 directly from TaxFormFinder. You can print other Hawaii tax forms here.

Other Hawaii Individual Income Tax Forms:

TaxFormFinder has an additional 164 Hawaii income tax forms that you may need, plus all federal income tax forms.

Form Code Form Name
Form N-11 Individual Income Tax Return (Resident Form)
Form N-200V Individual Income Tax Payment Voucher
Income Tax Instructions Hawaii Income Tax Instruction Booklet
Form N-15 Individual Income Tax Return (Nonresidents and Part Year Residents)
Form N-1 Declaration of Estimated Income Tax for Individuals

Download all HI tax forms View all 165 Hawaii Income Tax Forms


Form Sources:

Hawaii usually releases forms for the current tax year between January and April. We last updated Hawaii Form N-158 from the Department of Taxation in February 2020.

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About the Individual Income Tax

The IRS and most states collect a personal income tax, which is paid throughout the year via tax withholding or estimated income tax payments.

Most taxpayers are required to file a yearly income tax return in April to both the Internal Revenue Service and their state's revenue department, which will result in either a tax refund of excess withheld income or a tax payment if the withholding does not cover the taxpayer's entire liability. Every taxpayer's situation is different - please consult a CPA or licensed tax preparer to ensure that you are filing the correct tax forms!

Historical Past-Year Versions of Hawaii Form N-158

We have a total of eight past-year versions of Form N-158 in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:


2019 Form N-158

Form N-158, Rev. 2019, Investment Interest Expense Deduction

2018 Form N-158

Form N-158, Rev. 2018, Investment Interest Expense Deduction

2017 Form N-158

Form N-158, Rev. 2017, Investment Interest Expense Deduction

2016 Form N-158

Form N-158, Rev. 2016, Investment Interest Expense Deduction

Forms 2015 - Web Fillable 2015 Form N-158

Form N-158, Rev. 2015, Investment Interest Expense Deduction

Forms 2014 - Web Fillable 2014 Form N-158

Form N-158, Rev. 2014, Investment Interest Expense Deduction

Forms 2012 - Web Fillable 2012 Form N-158

Form N-158, Rev. 2012, Investment Interest Expense Deduction

Forms 2011 - CD Fillable 2011 Form N-158

Form N-158, Rev. 2011, Investment Interest Expense Deduction


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