Schedule PTE - BD: Schedule PTE - BD (2024)
Missouri · Missouri DOR · Used for tax years 2024
Missouri Schedule PTE-BD calculates the Missouri Business Income Deduction for Form MO-PTE. It reports income and deductions from federal Schedule K, the amounts reportable to individual owners, and the portions from Missouri sources.
Who files this form
Complete the 2024 Schedule PTE-BD when computing the Missouri Business Income Deduction on Form MO-PTE. The schedule uses income and deduction amounts from Schedule K of federal Form 1065 or Form 1120-S.
What you'll need
Have these forms and details available:
- Federal Form 1065 or Form 1120-S, Schedule K, for income and deduction amounts.
- Schedule K-1s issued to individual members. You may use these to determine the amounts for Column (B).
- Information showing which amounts in Column (B) came from Missouri sources, for Column (C).
- The entity’s name, Missouri Tax I.D. Number, Federal Employer I.D. Number, and Charter Number.
- Form MO-PTE, where you enter the deduction from this schedule on Line 6.
Common mistakes
- Copying every federal business income amount into Column (A). The form says to exclude business income that, ignoring Section 143.022, RSMo, would be subtractable or deductible by individual partners or shareholders in arriving at Missouri taxable income. It gives certain agricultural disaster or emergency compensation as an example.
- Including all owners’ amounts in Column (B). Use only the portion reportable to individual members, including entities disregarded as separate from individuals for Missouri income tax purposes.
- Treating all income as Missouri income. Analyze each Column (B) amount and enter only its Missouri-sourced portion in Column (C).
- Including other income or deductions without checking the special rules. Lines 5 and 7 have eligibility rules tied to their effect on specified individual federal income amounts.
- Entering a negative amount on Line 8. Reduce the Column (C) total by negative amounts, but do not enter less than $0.
- Forgetting to transfer the deduction. Enter the Line 9 amount on Form MO-PTE, Line 6.
Questions people ask
How is the deduction calculated?
Total Column (C), Lines 1 through 7, reducing the total by negative amounts but not below $0. Enter that amount on Line 8. Multiply Line 8 by 20% and enter the result on Line 9 and Form MO-PTE, Line 6.
What counts as Missouri-source income?
The form says the source is where the income is produced. An item is Missouri-sourced if it results from an overall effort centered in Missouri. Business income or deductions are wholly attributable to Missouri if the business operates only in Missouri.
Is rental income from property outside Missouri included in Column (C)?
If both the rental property and its management are outside Missouri, the rental income is not from Missouri sources.
Can all “Other Income” and “Other Deductions” go on Lines 5 and 7?
No. Include only items that would hypothetically increase or decrease individual partners’ or shareholders’ amounts on Form 1040, Schedule E, Part II, Line 32, or total combined profit on Form 4835 or Form 1040, Schedule C or F. Partnerships must also include qualifying items from Form 1065, Schedule K, Lines 13c or 13d, on Line 7.