Instructions For Form Bc-1065 - City Of Battle Creek, Michigan

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CITY OF BATTLE CREEK INCOME TAX 2008 PARTNERSHIP RETURN
INSTRUCTIONS FOR FORM BC-1065
WHO MUST FILE A PARTNERSHIP RETURN
period for any partner, use two lines to indicate allocation of income
Every partnership that conducted business activity in the City of Battle Creek,
by status in all schedules where applicable.)
whether or not an office or place of business was maintained in the city, Is
Schedule C indicates the total Income of the partnership which may be subject
required to file an annual return. Syndicates, joint ventures, pools and like
organizations will also use Form BC 1065.
to the tax. Ordinary business income in Schedule C is transferred to Schedule E,
column 1, showing the amount of ordinary income distributable to each partner.
ROUNDING TO NEAREST DOLLAR
The non business income portion of Schedule C is first transferred to Schedule B,
Round all amounts to the nearest dollar (i.e., $.00 to $.49 = $.00, $.50 to $.99
by total amounts for each type of income, to determine the taxable portion for
= next dollar).
each class of partners. This taxable income is then transferred to Schedule E
showing the amounts applicable to the individual partners. Column 1 on page 1 is
RENAISSANCE ZONE DEDUCTION
the final summary transferred from Schedule E. column 7.
A partnership located and doing business in a Battle Creek Renaissance Zone may
be eligible to claim the new Renaissance Zone deduction. This deduction allows
Partners who are RESIDENTS are taxed on their entire distributive share of
the net profits of the partnership, including that arising from business activities
the partnership or the partners, if qualified, to deduct the portion of the partnership
income earned in a Renaissance Zone from income subject to Battle Creek
outside the City and including interest, dividends, rents and royalties, other
income tax. A taxpayer is not qualified to claim the deduction if the taxpayer is
income, and gains from the sale or exchange of property, either tangible or
intangible, regardless of where such property was located.
delinquent for any Michigan or local taxes.
If the partnership elects to pay the tax for the partners, the deduction is claimed
Partners who are NONRESIDENTS of Battle Creek are taxed on their
on the partnership return. Otherwise, the deduction is passed through to the
distributive share of the portion of the net profits which is attributable to business
partners who claim the deduction by filing Schedule RZ withtheir individual
activity in the City, plus net rentals of tangible properly in the City and gains from
returns. A Battle Creek income tax return must be filed to claim this deduction.
the sale or exchange of tangible property in the City. They are not taxed on their
Contact the Income Tax Department to request Schedule RZ of BC-1065.
share of net rentals on property outside the City, gains from the sale or exchange
of tangible properly outside the City, gains from the sale or exchange of securities
FILING DATE:
or other intangible properly, or on interest and dividends
Calendar year taxpayers must file by April 30, 2009. Fiscal year taxpayers
must file within four (4) months after the end of their fiscal year.
When the receipt of interest and other intangible income is directly related to the
nature of the business, such interest, etc. shall be considered as business income
OPTION TO PAY TAX
taxable to nonresidents, and is to be reported in Schedule C, on either line 1 or
The 2009 income tax rate is 1% for residents, and 1/2% for nonresidents of
line 11.
the City of Battle Creek.
INSTRUCTIONS FOR PAGE 1
At its election the partnership may file either an information return or It may
The amounts to be inserted in column 1, page 1 are transferred from Schedule E
compute and pay the tax which is due with respect to each partner’s share of the
on page 3 of the return. If this return is to be an information return only, the
net profits of the business. The partnership may pay the tax for partners only if it
remaining columns 2 through 6 on page 1 need not be filled in; however, if the
pays for ALL partners subject to the tax.
partnership elects to pay the tax, columns 2 through 6 must also be completed.
REMITTANCE: Partnerships electing to pay the tax for all partners must remit
Column 2. Any items of income which are non taxable and which are included
the tax when filing the return if the tax due is one dollar ($1.00) or more. MAKE
in column 1 are to be deducted in column 2. These items will include net operating
REMITTANCE PAYABLE TO: CITY TREASURER
loss carryover, etc. Treatment of capital gains and losses and net operating loss
carryovers are to be handled in the same manner as provided In the Federal
MAILING ADDRESS:
Internal Revenue Code. Therefore, a net capital loss realized by any of the
partners, in excess of the partner’s allowable capital loss deduction must be
CITY INCOME TAX DEPARTMENT
added back in column 2, page 1. The allowable capital loss deduction for each
P.O. BOX 1982 BATTLE CREEK,
partner is the lesser of (1) the net capital loss (2) the amount in column 1, page 1,
MICHIGAN 49016-1982
computed without regard to capital gains and losses, or (3) $3,000. Nonresident
partners must allocate net operating losses to Battle Creek at the percentage of
PARTNERSHIP AS TAXPAYER If the partnership elects to pay the tax for
business conducted in Battle Creek in the year in which the loss was sustained. A
the partners, the individual partners are not required to file a return if such partners
schedule of computations must be attached for all entries in column 2.
have no other income subject to the tax. However, an individual return shall be
Column 3. Exemptions. A $750 exemption is allowed for each partner his
required from any partner having taxable income other than his distributive share
spouse and his or her dependents. Additional exemptions are allowed if the
of the net profits of the partnership. (In such instances, a partner who is required
to file an individual return should refer to the instructions for such return.)
taxpayer or his spouse is 65 or over, or is blind. In general, the same rules apply
in determining dependents as under the Federal Internal Revenue Code. A spouse
If the partnership elects to pay the tax on behalf of the partners, then it assumes
may be taken as an exemption on the partnership return only if such spouse has
the status of a taxpayer to the extent that: (1 ) timely payment must be made; (2)
no income subject to the Battle Creek Income Tax. Exemptions for a partner
a 2008 Declaration of Estimated Income Tax, Form BC 1040 ES will be required if
whose residence status has changed from a resident to a nonresident, or from a
the total estimated tax for the partnership is expected to exceed $100. The
nonresident to a resident of Battle Creek during the taxable year should first be
calendar or fiscal year of the partnership will govern in establishing the dates for
applied against income while a resident. The balance of the amount of
filing the declaration and paying the estimated tax.
exemptions, if any, should then be applied to Battle Creek income while a
nonresident. A corporation or partnership itself is not allowed an exemption.
INCOME TAXABLE TO RESIDENT vs
Column 6. Enter in column 6 payments made by the partnership for tax paid
NONRESIDENT PARTNERS
The Partnership Return Form BC 1065 is designed to distinguish
with a tentative return, or for payments on a 2008 Declaration of Estimated
between that income taxed to residents and that taxed to
Income Tax, or any payments and credits made by the partnership on behalf of
nonresidents. The purpose of the return is to set forth the entire net
Battle Creek resident partners for income taxes to any other municipality, if the
profit for the period covered and to show the distributive share of
income on which such tax was levied is included in this return. DO NOT take
credit for income taxes paid any other municipality on behalf of partners who are
each partner, indicating those who are residents of Battle Creek and
those who are nonresidents. (If residency changes during the taxable
not Battle Creek residents. The credit shall be the lesser amount of either (1) the
income tax paid the other

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