City Of Portland Income Tax 2006 Partnership Return Instructions For Form P-1065 printable pdf download

CITY OF PORTLAND INCOME TAX 2006 PARTNERSHIP RETURN

INSTRUCTIONS FOR FORM P-1065

Such election is available to all partnerships regardless of

FILING DATE:

the residency of the partners. The partnership may pay

Calendar year taxpayers must file by April 30, 2007.

the tax for partners only if it pays for all partners subject to

Fiscal year taxpayers must file within four (4) months

the tax.

after end of their fiscal year.

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

REMITTANCE:

partners thereof, then such election and payments shall

Partnerships electing to pay the tax for partners must

be deemed to meet the requirements for the filing of a

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

return, as provided by the Ordinance, for each partner

must be paid when filing the return. Make remittance

who has no other income subject to the tax. However, an

payable to:

individual return shall be required from any partner having

CITY TREASURER

taxable income other than his distributive share of the net

MAILING ADDRESS:

profits of the partnership. In such instances, the partner

Mail your return and remittance to:

should enter as "Additions to Income" on his individual

INCOME TAX DIVISION

return Form P-1040, Line 2 the amount shown on the

259 KENT STREET

partnership return on page 1, column 1. The deductions

PORTLAND, MICHIGAN 48875

shown in column 2 and the credit in column 5 paid on his

behalf by the partnership should also be listed on his

Who Must File a Partnership Return

individual return, page 1, Lines 5 and 10 respectively.

(Form P-1065)

Attach a copy of the P-1065 to your Individual P-1040

Every partnership that conducted business activities

Return.

in the City of Portland after Jan. 2006 whether or not an

office or place of business was maintained in the city, is

Partnership as Taxpayer

required to file an annual return within (4) months fol-

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

lowing the end of their taxable year. If on a calendar year

partners then it assumes the status of a taxpayer to the

basis, the return must be filed by April 30, 2007.

following extent:

Syndicates, joint ventures, pools and like organizations

1. Timely payment. Payment must be made within

will also use Form P-1065. So called "tax options

(under

four (4) months from the end of the fiscal year or period,

Sec. 1371-1377, Internal Revenue Code) must file as cor-

otherwise it will be subject to interest and penalties the

porations on Form P-1120.

same as a delinquent payment from any other taxpayer.

2. Payment of estimated tax. The election of the

Resident vs. Non-Resident Partners

partnership to pay the tax on behalf of the individual

Partners who are residents of Portland are taxed on

partners also carries with it the requirement to file a 2007

their entire distributive shares on the net profits of the

Declaration of Estimated Income Tax, Form P-1040-ES.

partnership, including that arising from business activities

outside the city, and including interest, dividends, rents

and royalties and gains from the sale or exchange of

Income: Instructions for Page 1

property, either tangible or intangible.

Column 1. Fill out schedules on Page 2 first and trans-

Partners who are non-residents of Portland are taxed

fer amounts in Column 5, Schedule D to this column. List

on their distributive shares on the portion of the net prof-

amounts in same order as partners are listed in top sec-

its which is attributable to business activity in the City,

tion.

plus net rentals of property in the City and gains from the

Exemptions, Column 2. Exemptions are allowed for

sale or exchange of real or tangible personal property in

each partner and his or her dependents. An exemption of

the City. They are not taxed on their share of net rentals

$1000 is allowed for the partner, the partner's spouse, and

on property outside the City, gains from the sale or

each dependent. In general, the same rules apply in

exchange of real or tangible property outside the City,

determining dependents as under the Federal Internal

gains from the sale or exchange of securities or other

Revenue Code. A spouse may be taken as an exemption

intangible property, or interest or dividends.

on the partnership return only if each spouse has no

The Partnership Return Form P-1065, is designed to

income subject to the Portland income tax. Additional

distinguish between that income taxed to both residents

exemptions are allowed if the partner or his spouse is 65

and non-residents, and that taxed to residents only.

or over, or is blind.

The return set forth the entire net profit for the period

Credits, Column 5. Enter in this column payments

covered and show the distributive share of each partner,

made by the partnership for tax paid with a tentative

indicating those who are residents of Portland and those

return; or any payments and credits made by the partner-

who are non-residents. If residency changes during the

ship on behalf of Portland resident partners for income

taxable period for any partner, use two lines to indicate

taxes to any other municipality, if the income on which

allocation of income by status in all schedules where

such tax was levied is included in this return. Do not take

applicable, based on the proration of time in each status.

credit for income taxes paid another municipality on

behalf of partners who are not Portland residents. The

Option to Pay Tax

credit shall be the lesser amount of either (1) the income

At its election, the partnership may file either an

tax paid the other municipality, or (2) the amount of tax

information return or it may compute and pay the tax

that would be due to the City of Portland on earnings in

which is due with respect to each partner's share of the

the other municipality and cannot exceed 1/2% of the

net profit of the business, after giving effect to exemptions

amount that would be taxable by the City of Portland.

and other items to which each partner is entitled.

Page 3

City Of Portland Income Tax 2006 Partnership Return Instructions For Form P-1065

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