Instructions For Form P-1065 For Partnerships Doing Business In Pontiac printable pdf download

040ES, if the total

1. The 50% deduction of net long-term capital gains applies to the

CITY OF PONTIAC INCOME TAX

PARTNERSHIP RETURN

Instructions for Form P-1065 for PARTNERSHIPS doing business in Pontiac

FILING DATE: Calendar year taxpayers must file by April 30, of

the requirements for the filing of a return, as provided by the

the next year. Fiscal year taxpayers must file within four (4)

Ordinance, for each partner who has no other income subject to

months after the end of their fiscal year.

the tax. However, an individual return shall be required from any

partner having taxable income other than his distributive share of

REMITTANCE: Partnerships electing to pay the tax for partners

the net profits of the partnership. In such instances, the partner

must remit for all partners when filing return. The tax due, if one

should enter as “Income from Partnerships” on his individual

dollar ($1.00) or more, must be paid when filing the return.

return, the amount shown on the partnership return on page 1,

column 1 and column 2. The deductions shown in column 3 and

Make Remittance payable to:

the credit in column 6 paid on his behalf by the partnership should

TREASURER - CITY OF PONTIAC

be taken as a credit on his individual return.

MAILING ADDRESS:

Partnership

Taxpayer

If the partnership elects to pay the tax on behalf of the partners

CITY TREASURER

then it assumes the status of a taxpayer to the following extent:

INCOME

TAX

DIVISION

Time payment. Payment must be made within four (4)

47450 WOODWARD

AVENUE

months from the end of the fiscal year or period,

PONTIAC, Ml 48342-2245

otherwise it will be subject to interest and penalties the

same as a delinquent payment from any other taxpayer.

Who Must File a Partnership Return

Payment of estimated tax. The election of the partnership

(Form P-1065)

Every partnership that conducted business activities in the City

to pay the tax on behalf of the individual partners also

of Pontiac after January 1, 1968, whether or not an office or place

carries with it the requirement to file a Declaration of

of business was maintained in the city, is required to file an annual

Estimated Income Tax, Form P-1040ES,

return within (4) months following the end of their taxable year. If

estimated tax for the partnership is expected to exceed

on a calendar year basis, the return must be filed by April 30 of the

$100, and to pay such tax. If the partnership so files and

next year. Syndicates, joint ventures, pools and like organizations

makes payments, the partners will not be required to file a

will also use Form P-1065. So called “tax option” corporations

Declaration as individuals unless they have additional

(under Sets 1371-1377, Internal Revenue Code) must file as

income (from which Pontiac income tax was not withheld)

corporations on Form P-1120.

on which the Pontiac tax is expected to exceed $100.

The fiscal year of the partnership will govern in

Resident

vs.

Non-Resident

Partners

establishing the dates for filing the Declaration and paying

Partners who are residents of Pontiac are taxed on their entire

the estimated tax.

distributive shares of the net profits of the partnership, including

that arising from business activities outside the city, and including

Income: Instructions for Page 1

interest, dividends, rents and royalties and gains from the sale or

Dividend Exclusion. 50% Capital Gains Deduction and Other

exchange of property, either tangible or intangible.

Deductions. Column 3. Any items of income which are non-

Partners who are non-residents of Pontiac are taxed on their

taxable and which are included in column 1 of this section may be

distributive shares of the portion of the net profits, which is

deducted in column 2.

attributable to business activity in the city, plus net rentals of

If the partnership elects to pay the tax for its partners, and an

property in the city and gains from the sale or exchange of real or

analysis of Column 7 of Schedule 1 on page 3 indicates that a

tangible personal property in the city. They are not taxed on their

partner has realized a long term capital gain, the capital gains

share of net rentals on property outside the city, gains from the

deduction of 50% of the excess of net long term capital gains over

sale or exchange of real or tangible property outside the city, gains

net short term capital losses is to be deducted in Column 2, page

from the sale or exchange of securities or other intangible

property, or interest or dividends.

first $50,000 only. Long-term capital gains in excess of $50,000

The Partnership Return, Form P-1065, is designed to

must be fully included in income.

distinguish between that income taxed to both residents and non-

If the analysis of Column 7, Schedule 1 on page 3 indicates a

residents, and that taxed to residents only.

net capital loss has been realized by any of the partners, the

The return shall include the entire net profit for the period

amount of the excess of the net capital loss included in Column 7,

covered and show the distributive share of each partner indicating

Schedule 1, page 3 over the partner’s allowable capital loss

those who are residents of Pontiac and those who are non-

deduction must be added back in Column 2, page 1. The

residents. If residency changes during the taxable period for any

allowable capital loss deduction is limited to % the net capital loss

partner, use two lines to indicate allocation of income by status in

but not in excess of the amount in Column 1, Page 1, or $1,000

all schedules where applicable.

whichever is lower.

Note, if the partnership is filing an information return only, the

Option to Pay Tax

individual partners will report their distributive share of the

At its election, the partnership may file either an information

partnership’s Section 1231 transactions and other sales and

return or it may compute and pay the tax, which is due with respect

exchanges of property on their individual P-1040 returns in the

to each partner’s share of the net profit of the business, after giving

same manner as provided in the Federal Internal Revenue Code.

affect to exemptions and other items to which each partner is

Any deduction other than the dividend exclusion allowed by the

entitled. Such election is available to all partnerships regardless of

Federal Internal Revenue Code must be explained in an attached

the residency of the partners. If the partnership makes the election

schedule.

to pay the tax for partners it must pay for all partners subject to the

Exemptions. Column 3. Exemptions are allowed for each

tax.

partner and his or her dependents. An exemption of $600 is

If the partnership elects to pay the tax on behalf of the partners

allowed for the partner, the partner’s spouse, and each dependent.

thereof, then such election and payments shall be deemed to meet

In general, the same rules apply in determining dependents as

Instructions For Form P-1065 For Partnerships Doing Business In Pontiac

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