S-corp had long term gain from merger. How to enter into Ohio tax form

[pjwesp]

We owned stock in Ohio s-corp that merged with another company.  The capital gain realized was 148,000.  I have finished my federal form but do not know how to enter it into the Ohio form.  

Also on the Ohio it K-1 it showed a loss for the shareholder amount as -155,174 and dividend income at 197. and adjusted income (loos) at -154,977

Not sure where to enter the 148,000 or the K-1 information

[DaveF1006]

Here is how to enter.

1. Go to the Ohio State Return section.
2. Look for a category labeled "Business Income" or "Ohio Business Income Deduction."]
3. The software will ask you to enter the details from your K-1 and the merger gain. It then generates the Schedule IT BUS behind the scenes and attaches it to your personal filing. Here are some considerations.

1.Classifying the $148,000 Capital Gain

In Ohio, capital gains from the sale of an ownership interest in a business (like your S-corp merger) are generally classified as:

1. Business Income if the sale is considered a "liquidation" of the business or if you were a material participant. 
2. Where to enter: You will report this on Ohio Schedule IT BUS (Business Income), Part 1, under the "Capital gains/losses" line.

Why it matters: By classifying it as business income, it becomes eligible for the Business Income Deduction, which can shield the first $250,000 (if filing jointly) from state tax.

2. Entering the K-1 Information

The K-1 figures represent your share of the entity's operating activities for the year.

1. The Loss (-$155,174): This is also entered on Schedule IT BUS. You will enter this in the "Ordinary income" section for the S-corp. 
2. The Dividend ($197): Enter this on the "Dividends" line of Schedule IT BUS.
3. The Net Effect: Ohio will net these figures together on Schedule IT BUS.

$148,000 (Gain) - $155,174 (Loss) + $197 (Dividends) = -$6,977 Net Business Income.Note: Because your total business income results in a net loss ($154,977 adjusted loss), you likely won't owe tax on the $148,000 gain itself, as the operating loss from the S-corp offsets it.

[pjwesp]

I made a mistake the gain was 248,000

also we only owned .7 percent of the bank stock.  When I go to enter for the ohio business deduction,  it says we do not qualify.  Also we live in Texas not Ohio.  on the ohio state form it treats the gain as a nonbusiness gain.  It asks what source is the gain.  Does it belong to Ohio or not. 

Also is liquidation the same as a merger.   

On the federal form it was handled as a type A reorganization where the shareholders received a mix of acquiring company stock (tax-free) and cash/other property (boot, which is taxable).  The 248,000 was the taxible gain.

I have read where because we live in Texas and owned .7 percent.  The gain is not taxible in Ohio, but Texas.  Because it is a nontangible gain.  That we would only be taxed on our share of the company's regular operational income.  My share of the income was -157,000 because the company loss last year.

Where do I enter all this and where does the 248,000 belong