M2SB: Income Tax Computation for S Portion of ESBT (2024)
Minnesota · Minnesota DOR · Used for tax years 2024
Minnesota Schedule M2SB computes the 2024 Minnesota taxable net income and tax for the S portion of an ESBT. It reports federal taxable income, Minnesota additions and subtractions, and the total tax to include on Form M2.
Who files this form
A trust filing as an Electing Small Business Trust (ESBT) must file Schedule M2SB to report all items relating to the trust’s S portion. Report all income from the S portion on this schedule.
What you'll need
Have these documents and details ready:
- The trust’s name, federal ID number and Minnesota ID number.
- Each S corporation’s name and federal tax ID number. If there are more than two, list the additional entities on an attached statement.
- A copy of the federal computation of taxable income for the S portion.
- A copy of Schedule KS and an attachment detailing the apportionment calculation using the Minnesota apportionment factor on Schedule KS, line 50.
- Schedule M2NM to determine the amounts on lines 2 and 6. The form directs you to enclose it for those lines.
- A separate Schedule M2MT for the S portion, which must be enclosed.
- Form M2 instructions for the tax table and guidance on additions and subtractions.
Lines 18 and 31 also refer to Schedule M2SBNC, line 17, for adjustments due to federal changes not adopted by Minnesota.
How to file
Include Schedule M2SB and a copy of the federal computations for the S portion when you file Form M2. Also include Schedule KS and the required supporting schedules and attachments.
Add the tax amounts on lines 9 and 10 of Schedule M2SB. Enter the total on line 11 of Schedule M2SB and include that amount on line 11 of Form M2.
The supplied text does not give a mailing address or e-filing instructions.
Common mistakes
- Leaving out the federal computation. The text specifically reminds you to include a copy when filing Form M2 and Schedule M2SB.
- Omitting S corporation details. Enter each S corporation’s name and federal tax ID. Attach a statement if you need space for more than two entities.
- Leaving out the apportionment calculation. Include an attachment showing the calculation based on Schedule KS, line 50.
- Not rounding amounts. The instructions direct you to round to the nearest whole dollar.
- Not preparing a separate Schedule M2MT. Complete a separate one for the S portion of the trust.
Questions people ask
What income goes on Schedule M2SB?
Report all income from the S portion of the ESBT. Line 1 starts with the federal taxable income of the S portion calculated on your federal schedule.
How do I apportion income and deductions to Minnesota?
Apportion all income, deductions and modifications using the S corporation’s Minnesota apportionment factor reported on Schedule KS, line 50. Include an attachment detailing the calculation.
What if the trust holds stock in more than two S corporations?
Enter the additional entities on an attached statement, including each corporation’s name and federal tax ID.
Where do I find instructions for additions and subtractions?
For Schedule M2SB lines 12 through 43, use the instructions for Form M2 lines 43 through 73.