Instructions For Form S-1065 - Income Tax 2001 Partnership Return

Column 5, Total Tax. Resident partners are taxed at 1.50% of the

Schedule C, Distribution to Partners

taxable income (Column 4) and non-residents are taxed at .75%. Partners

Complete schedule according to captions and transfer figures in Column

who changed residency status during the year are to follow instructions

7 to Page 1, Column 1, only if the partnership is paying the tax for all its

in the fourth paragraph under the caption "Resident vs. Non-Resident

partners. Column 4 is a memorandum column only and is to be used to

Partners".

compute the amount of exclusion to be transferred to the individual

Column 6, Credits. Enter in this column payments made by the

Form S-1040.

partnership for tax paid with a tentative return; or any payments and

Schedule D, Business Allocation Formula

credits made by the partnership on behalf of Saginaw resident partners

The business allocation percentage formula is to be used by NON-

for income taxes to any other municipality, if the income on which such

RESIDENT owners of businesses with business activity both inside and

tax was levied is included in this return. Do not take credit for income

outside the City of Saginaw who, because they do not maintain

taxes paid another municipality on behalf of partners who are not

Sufficient records to accurately reflect the net profits from operations

Saginaw residents. The credit shall be the lesser amount of tax that

conducted within the City of Saginaw, or for other reasons, are not

would be due to the City of Saginaw on earnings in the other

Using the separate accounting method.

municipality after deduction of exemptions and cannot exceed .75% of

Line14. Enter in Column 1 the average net book value of all real and

the amount that would be taxable by the City of Saginaw.

tangible personal property including inventories owned by the

MUST ATTACH FEDERAL 1065 RETURN

business, regardless of location; and in Column 2 show the net book

value of the real and tangible personal property including inventories

INSTRUCTIONS FOR SCHEDULES ON PAGE 2

located in the City of Saginaw. The average net book value of real and

Schedule A, Allocable Partnership Income

tangible personal property including inventories may be determined by

The ordinary income or loss as reported on the Federal Form 1065 must

adding the net book values at the beginning of the year and the net

be adjusted to arrive at the partnership income to be apportioned to the

book values at the end of the year and dividing the sum thus obtained

non-resident partners on the basis of the Business Allocation Formula,

by two. Any other method which will accurately reflect the average net

Schedule D. To Line 1, add those deductions on the Federal return,

book value for the year will also be permitted.

such as partners' salaries and the Saginaw City income tax (if included).

Line 14a. Enter in Column 1 the gross annual rentals multiplied by 8 for

In addition, subtract the non-business income as developed in

all rented property regardless of location. In Column 2 show the gross

Schedule B. The resulting answer on Line 4 is to be distributed on the

annual rentals multiplied by 8 for all rented property located in the City

basis of the partnership agreement and shown in Schedule C, Column

of Saginaw. Gross annual rentals refer to real property, rented or leased,

1, in the same order as the partners are listed at the top of

and should include the actual sums of money or other consideration

Page 1.

payable, directly or indirectly, by the taxpayer for the use or possession

Schedule B, Non-Business Income and Exclusions

of such real property.

A direct determination can be made of certain partnership income as to

Line15. Enter in Column 1 the total compensation paid to all employees

whether or not it was earned in the City. A resident partner is taxed on

during the year and in Column 2 show the amount of compensation paid

all income regardless where earned but a non-resident partner is taxed

to employees for work done or for services performed within the City of

only on that portion earned in the City. In addition, the income tax

Saginaw during the year.

ordinance exempts specific income from both residents and non-

Line 16. Enter in Column 1 the total gross receipts from all sales or

residents(see NOTE). In Column I, insert figures from the Federal Form

services rendered during the year and in Column 2 show the amount of

1065 as indicated from various pages, schedules and lines. In Columns

gross receipts from sales made or services rendered in the City of

II and IV, prorate Column I on the ratio of residents' and non-residents'

Saginaw during the year.

percentages according to the partnership agreement. Determine the

Line 18. In determining the average percentage(Line 18),a factor shall

amount of non-taxable income in each category in accordance with the

be excluded from the computation only when such factor does not exist

exemptions allowed by the ordinance and show in Columns III and V.

anywhere insofar as the taxpayer's business operation is concerned

The proportionate share of each individual is to be determined for Lines

and, in such cases, the sum of the percentages on Line 17 shall be

7 thru 9, Columns III and V and transferred to the individual Form S-

divided by the number of factors actually used.

1040, per instructions. If the partnership income is not divided evenly

or if three or more persons are partners, attach schedule showing

RENAISSANCE ZONE:

IF FILING 2001 RENAISSANCE ZONE TAX

EXEMPTION, YOU MUST ATTACH ORIGINAL QUALIFYING CERTIFICATE TO

distribution of income and exclusions.

THE RETURN. COPIES WILL NOT BE ACCEPTED.

Gains and losses from the sale or exchange of property are treated in the

same manner, and the amount subject to tax determined on the same

Tax Due or Refund

basis, as under the Federal Internal Revenue Code.

If the partnership has elected to pay the tax for the partners and

Only the amount of the gain or loss occurring from July 1, 1965, to date

payments and credits exceed the tax due, show the amount of such

of disposition shall be recognized for purposes of the Saginaw income

overpayment on Page 1, Line 11. If your payments and credits exceed

tax. The amount of gain or loss occurring after July 1, 1965, is to be

the tax, the over-payment will be refunded by check. Do not take credit

determined by either (1)computing the difference between the July 1,

for over-payment on your Estimated Tax Form S-1040ES.

1965, fair market value(June 30th closing price for traded securities)or

Refunds will be made as quickly as possible. Please allow 90 days

the cost if the date acquired was subsequent to July 1, 1965, and the

before making any inquiry. Refunds of less than One Dollar($1.00) will

proceeds from the sale or exchange; or (2)by using the gain or loss for

not be made. Tax due of less than One Dollar ($1.00)need not be paid.

the computing the taxable portion of such gain or loss on the ratio that

Assistance

the entire holding period, as computed for Federal income tax purposes,

If you have any questions not answered in these instructions, or if you

and number of months held in the period subsequent to July 1, 1965, is

need assistance in preparing your return, call (989) 759-1654, or visit the

to the total time the property was held. The fair market value of property

Income Tax Office in the Fiscal Services Department, City Hall, Room

shall be determined by an appraisal or similar reliable evidence.

105, 1315 South Washington Avenue.

Instructions For Form S-1065 - Income Tax 2001 Partnership Return - City Of Saginaw Page 2

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