Instructions For Form 5462 Draft - City Of Detroit Income Tax - Estates And Trusts (Page 2 of 3) in pdf

Line 4: Enter the Federal Employer Identification Number

Gain or loss on property purchased prior to July 1, 1962 must

(FEIN) of the estate or trust. Be sure to use the same account

be determined by one of the following methods:

number on all City of Detroit forms related to this estate or

• The base may be the adjusted fair market value of the

trust. The FEIN from line 4 must be repeated at the top of page

property on July 1, 1962, or

• Divide the number of months the property has been held

Line 5: Enter the complete address, including the two-digit

since July 1, 1962 by the total number of months the property

abbreviation for the country code.

was held and apply this fraction to the total gain or loss as

reported on estate or trust U.S. Form 1041.

A complete list of country codes is available online at

Line 12: Enter amount from federal Form 1041, line 8, that

michigan.gov/citytax. Commonly used country codes

pertains to other income to the extent it was earned in Detroit.

are listed below:

Report estate or trust share of Detroit partnership income

United States

(or loss). If the estate or trust is a shareholder in a tax-option

Canada

corporation that has elected to file under Subchapter S of the

Mexico

Internal Revenue Code it is not required to report a distribution

nor may it deduct its share of any loss sustained by the

NOTE: Any correspondence regarding the return filed and/or

corporation.

refund will be sent to the address provided on this form.

Attach a copy of the federal Schedule K-1 for estate or trust

Income and Adjustments

share of partnership losses on Detroit activities and federal

Line 9: Enter amount from federal Form 1041, line 3, that

Form 8582 (Passive Activity Loss Limitations).

pertains to the net profit or (loss) from the operation of a

Other Detroit income subject to tax that is not reported

business or profession to the extent it results from work done,

elsewhere, including all gross income that the descendant

services rendered or other business activities conducted in

has a right to receive and that is not properly includible on

Detroit. A copy of Federal Schedule C must be submitted for

the descendant’s final return. List each item of other income

each business conducting activity in Detroit.

excluded or adjusted. Attach a separate schedule if necessary.

Line 10: Enter amount from federal Form 1041, line 5, that

If excluding or adjusting reported ordinary gain or loss, attach

pertains to net profit or loss from rentals or real and tangible

a copy of Schedule 5 to the return.

personal property located in Detroit. All income reported on

Line 14: Complete Schedule G for resident beneficiaries

the federal Schedule E that comes from business activity in

including each beneficiary’s name, Social Security number,

Detroit or property located in Detroit is income.

and amount distributable. Enter total distributable income from

The following income reported on federal Schedule E is

line 16 of Schedule G on line 14. If additional space is needed,

excludable: income from business activity or property outside

attach a schedule similar to Schedule G identifying additional

Detroit; and income from other estates and trusts.

beneficiaries by consecutive numbers.

Passive Loss Limitations as set forth in the Internal Revenue

Line 16: Estates and trusts are allowed the same exemptions as

Code apply when taking the rental loss deduction on the City

under the Federal Internal Revenue Code ($600 for an estate,

of Detroit Resident Income Tax Return (Form 5118) may apply.

$300 for a simple trust and $100 for a complex trust). Enter

exemption amount.

Line 11: Enter amount from Federal Form 1041, Line 4 that

pertains to income to the extent the gain or loss is from sales

Line 18: Certain geographic areas within the filing city were

of property located in Detroit. A capital loss from property

designated as Renaissance Zones. This designation grants tax

located in the city is allowed to the same extent allowed under

relief to qualified estates and trusts located and conducting

the Internal Revenue Code. An unused capital loss may be

business activity within a filing city Renaissance Zone. In

carried over to future tax years. The capital loss carryover for

conjunction with the designation of these zones, the Detroit

Detroit may be different from the carryover for federal income

Income Tax Ordinance was amended effective January 1, 1997,

tax purposes. A deferred capital gain from an installment sales

to include a Renaissance Zone deduction.

or similar exchange of property located in Detroit is taxable

If applicable, residents should enter Renaissance Zone

in the year recognized for federal income tax purposes. All

deduction in line 18 and attach Renaissance Zone approval

income reported on the federal Schedule E that comes from

letter.

business activity in Detroit or property located in Detroit is

income.

payments and Credits

NOTE: Gains or losses on sale of intangible assets (i.e., stocks,

Line 21: Enter the amount of Detroit tax withheld. Attach a

bonds, etc.) are not taxed nor deductible by estates and trusts

copy of all documents showing the reported tax withheld.

on the Detroit return. The gains and losses from the sale or

Line 22: Enter total payments made on a 2016 Detroit

exchange of real and tangible personal property located in

Declaration of Estimated Tax (Form D-1040ES). Include

Detroit are entered on this line. Attach schedules from U.S.

overpayment carried forward from the prior year and payments

Form 1041 to support the entry.

made with the Application for Extension of Time to File City

Income Tax Estates and Trusts Return (Form 5463).

Instructions For Form 5462 Draft - City Of Detroit Income Tax - Estates And Trusts Page 2

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