Additions

Net Operating Loss
If you reported a net operating loss deduction (on the "Other Income" line of your federal Form 1040) that was carried forward from a prior year(s), you must enter an amount here. Write the amount of the net operating loss deduction as a positive figure. (You will claim an Indiana net operating loss deduction on Schedule 1.)

Note: If your federal adjusted gross income this year is a loss, and you haven't included a net operating loss as a deduction on the "Other Income" line on your federal Form 1040, then leave this line blank.

Lump-Sum Distribution
If you completed federal Form 4972, you must complete this line because the income reported on that form is also taxable for Indiana purposes. The amount you should show on this line includes the capital gains reported on Part II plus the ordinary income reported on Part III of federal Form 4972. Enter as a positive amount.

Bonus Depreciation
You must make an exception (when figuring Indiana adjusted gross income) for the bonus depreciation deduction for property placed in service after September 11, 2001. Bonus depreciation is that part of any depreciation allowed in figuring your federal adjusted gross income that is attributable to the additional first year special depreciation deduction allowance for qualified property allowed under Section 168(k) of the Internal Revenue Code (IRC).

Figure the net income (or loss) which would have been included in federal adjusted gross income had the additional first year special deduction allowed under IRC Section 168(k) not been used. Enter the difference, which may be a positive or negative amount, below.

Get Commissioner's Directive #19 for additional information.

Section 179 Depreciation
Add-back your share of the IRC Section 179 deduction claimed for federal tax purposes that exceeds the amount allowed for state tax purposes.

Indiana adopted the former expensing limit provided by the Jobs Creation and Workers Assistance Act of 2002, which allows a deduction up to $25,000. The increase to $100,000 allowed by 2003 federal legislation is not allowed for purposes of figuring Indiana adjusted gross income.

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