Instructions For Form 5458 Draft (Page 2 of 3) in pdf

Line 5, column 1: Calculating this line is a two-step process:

Taxpayer Certification

1) Exclude any gain or loss on the sale of obligations of the

By signing this return, the signing partner or officer declares

United States which are included in line 4; 2) enter on line 5

that the filer has power of attorney from each participant

only that portion of the remainder of line 4 which represents

to file a composite return on his or her behalf. Treasury will

gain or loss attributable to the period after July 1, 1962.

mail refund checks, assessments and all correspondence to

If the property was acquired prior to July 1, 1962, the basis

the filing company at the address indicated on the return. The

may be the adjusted fair market value of the property on July

filing company must agree to be responsible for the payment of

1, 1962, (July 2 closing price for traded securities), or the gain

any additional tax, interest and penalties as finally determined.

or loss applicable to the period after June 30, 1962, may be

Issues involving the tax liability reported on a composite

computed by multiplying the total gain or loss by the ratio of

return will be resolved with the filing company. In unusual

the months the property was held after June 30, 1962, to the

circumstances, Treasury may contact the participants.

total months the property was held.

Schedule C — Income from Partnership

Line 12: The nonresident excludable portion of the amount

shown in line 12, column 3, to be entered in line 12, column

Schedule C is used to indicate all of the income of the

4, is that portion of the gain (or loss) which arose from the

partnership which may be subject to the Detroit tax. Line 28 of

sale or exchange of intangible assets, and of tangible property

Schedule C reflects the total of the partnership ordinary income

located outside of Detroit. The remaining portion of line 12,

from business operations, and lines 29 through 31 of Schedule

column 3, which is to be entered on line 12, column 5, will then

C reflects the total nonbusiness income of the partnership.

include gain (or loss) attributable to the period after June 30,

Ordinary income from business on Schedule C, line 28, will

1962, from the sale or exchange of tangible property located in

carry to Schedule E, column 1.

Detroit.

Nonbusiness income on Schedule C, lines 25 through 40, will

RENTS AND ROYAlTIES

carry to Schedule B. Instructions for Schedules B and E will

Line 6, column 1: Enter the total net income (or loss) from all

indicate how amounts transferred from Schedule C are to be

rents and royalties.

allocated to the individual partners.

Line 13: Complete line 13, columns 2, 3, and 4, as a

SChEDulE B — Nonbusiness Income or loss

distribution of the amount entered in line 6. Subtract column

4 (net income or loss from royalties and rents attributable

Schedule B is used to allocate the total nonbusiness income

to property outside Detroit) from column 3 and enter the

of the partnership between the total amount distributable

difference in column 5.

to resident partners and the total amount distributable to

nonresident partners.

INCOME FROM OThER PARTNERShIPS,

ESTATES, TRuSTS, ETC.

Nonresident income is further allocated to compute the total

income of nonresident partners which is subject to the Detroit

Line 7, column 1: Enter the net income (or loss) from other

tax. (Resident partners are taxed on their entire distributive

partnerships and other income from Schedule C, line 32.

share of nonbusiness income.) After determining the total

Line 8, column 1: Enter any income which is specifically

taxable income for each class of partners, these totals are

exempt for all taxpayers (interest on U.S. governmental

transferred to Schedule E wherein an analysis is made to show

obligations, etc.) and which was included in the amount on line 7.

the amounts of nonbusiness income applicable to the individual

partners.

Line 14: Complete line 14, columns 2, 3, and 4, as a

distribution of the amount entered in line 9. Subtract column 4

INTEREST AND DIVIDENDS

(income not taxable to nonresidents) from column 3 and enter

Line 1, column 1: Enter the total partnership income from

the difference in column 5.

interest and dividends from Schedule C, line 31.

Schedule E — Summary of Schedules B and C

Line 2, column 1: Deduct the total nontaxable interest (interest

from obligations of the United States and U.S. governmental

COLUMN 1: Enter each individual partner’s share of ordinary

units).

adjusted business income from Schedule C, Line 28.

Line 11: The total calculated on line 3, column 1, is to be

COLUMN 2 (Complete Schedule D first): Enter the

apportioned between the amount applicable to resident partners

appropriate business allocation percentage based upon partner

(line 11, column 2) and the amount applicable to nonresident

entity type. Individual resident and partnership partners

partners (line 11, column 3). Since interest and dividend

use a 100% allocation. Individual nonresident, estate, trust,

income is not taxable to nonresidents, the entire amount shown

corporation, exempt entity and foreign government partners

on line 11, column 3, will also be inserted on line 11, column 4,

enter the business allocation percentage from Schedule D, line

as excludable income of nonresidents.

3e, or the special allocation percentage authorized. Disregarded

entity and nominee partners enter the appropriate allocation

SAlES OR EXChANGE OF PROPERTY

percentage based upon the entity type of the actual owner of

Line 4, column 1: Enter the total net gain or loss from all sales

the partnership interest.

and exchange of property as shown in Schedule C, lines 33

through 36.

Instructions For Form 5458 Draft Page 2

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