March 24, 1982

********** Inc. was initially in a proceeding for an arrangement under Chapter 11 of the Bankruptcy Act. Subsequently, in 1975, it was adjudicated bankrupt.

You represent the trustee in bankruptcy. For federal income tax purposes the trustee is filing a Form 1120. For Massachusetts income tax purposes the trustee is required to file Fiduciary Income Tax Returns (Form 2) for periods subsequent to the adjudication in bankruptcy. You intend to file a Massachusetts Form 2, including a Schedule C with a federal Form 1120 attached. Form 2, Schedule B, Part II requires a taxpayer who is claiming an excess trade or business deduction to file a Massachusetts Schedule C and a copy of his federal Schedule C.

You ask whether the trustee, if he is claiming an excess trade or business deduction under Schedule B, Part II of Form 2 against his dividend and interest income, may attach a copy of his federal Form 1120, since he has not filed a federal schedule C.

Since the information required by federal Schedule C is the same as that required by federal Form 1120, the trustee will not be prevented from taking an excess trade or business deduction under Schedule B, Part II solely because he attaches to his Massachusetts fiduciary return a federal Form 1120 in lieu of a federal Schedule C.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

LJH:RSF:mf

LR 82-26