Why does my client’s CO 0104 show a negative amount on line 1?
The Colorado DOR requires that the calculated amount of federal taxable income flow to line 1 of Form DR 0104 to determine the amount of CO taxable income. Although the federal return limits the amount of federal taxable income to 0, Colorado does not. If additions and subtractions are present, limiting line 1 of CO Form DR 0104 to zero could result in an overstatement of taxable income for Colorado.
Per Department of Revenue instructions,
“If your federal taxable income is a negative amount, be sure to enter the amount as such on your Colorado return. If submitting a paper return, put the negative amount in parentheses, for example ($1,234).”
Drake Software will automatically bring the calculated amount of federal taxable income into the Colorado return, there is no data entry field for you to enter a negative amount of federal taxable income.
For more information, see the CO 104 Instruction Booklet.
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