2 Transition Schedule: Form 2 Transition Schedule (2024)
Montana · Montana DOR · Used for tax years 2024
The 2024 Montana Form 2 Transition Schedule calculates transition adjustments for passive activity loss carryovers, capital loss carryovers, and differences in federal and Montana asset basis. It also calculates the recovery of federal income taxes deducted in 2023 and includes a
Who files this form
If you elect to report a transition adjustment, complete this schedule and include it with your income tax return.
Part I covers passive activity loss carryovers, capital loss carryovers, and differences between federal and Montana adjusted basis. Part II calculates recovery of federal income tax deducted in 2023.
What you'll need
Have the information needed for the parts you complete:
- Your name and Social Security number.
- Federal and Montana passive activity and capital loss carryover amounts as of January 1, 2024, including the spouse’s Montana amounts where applicable.
- Federal and Montana adjusted basis amounts for an asset with differing basis.
- Your 2023 Montana Form 2 and Itemized Deductions Schedule.
- Your 2023 federal Form 1040, including refundable credits claimed and federal income tax on line 16.
- The amount of federal income tax refund you received in 2024.
- Your 2023 filing status and taxable income.
How to file
Complete the Transition Schedule and include it with your income tax return to elect to report a transition adjustment.
- If Part I, line 14 is positive, enter it on Schedule I, Part I, line 7.
- If Part I, line 14 is negative, enter it as a positive number on Schedule I, Part I, line 26.
- Enter the result from Part II, line 16 on Schedule I, Part I, line 8.
The supplied form does not give a mailing address or e-filing instructions.
Common mistakes
- Do not leave the completed schedule out of your income tax return when making the election to report a transition adjustment.
- If applicable, complete a separate Loss Carryover Transition Adjustment Worksheet for each spouse and each adjustment item.
Questions people ask
How is the 2024 transition adjustment calculated?
Part I subtracts Montana amounts from federal amounts for passive activity loss carryovers, capital loss carryovers, and adjusted basis. Add the results from lines 5, 10, and 13 to get the transition adjustment on line 14.
What if my Part I adjustment is negative?
Enter it as a positive number on Schedule I, Part I, line 26. A positive adjustment goes on Schedule I, Part I, line 7.
Does Part II use my entire federal refund?
Part II starts with the federal income tax refund received in 2024, then subtracts refundable credits claimed on your 2023 federal Form 1040. Additional calculations determine the amount to report on Schedule I, Part I, line 8.
Do spouses use one combined loss carryover worksheet?
The form says to complete a worksheet for each spouse and each adjustment item, if applicable. The worksheet lists passive activity, capital, and basis adjustment types.