Form Al-1041 - City Of Albion Fiduciary Income Tax Return - 2007 Page 4
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INSTRUCTIONS FOR THE ALBION
FIDUCIARY INCOME TAX RETURN (form AL-1041)
General
Albion, who, because they do not maintain sufficient business
records to accurately reflect the net profits from operations
Every trust and estate, which has gross income from sources
conducted within Albion, or for other reasons, are not using the
listed under “Taxable Income” below, must file a City of Albion
separate accounting method.
Fiduciary Income Tax Return (AL-1041), whether tax is due or
Line1a: Enter in column A the average net book value of all real
not. For purposes of this tax, an estate or trust shall be treated as
and tangible personal property owned by the business regardless
a nonresident individual and a tax rate of one half of one percent
of location. In column B show the net book value of all real and
(.005) shall apply on the earnings listed under “Taxable Income”
tangible personal property owned by the business located in
below.
Albion. The average net book value of real and tangible personal
An annual return is due on or before the last day of the fourth
property may be determined by adding the net book values at the
month following the end of the trust’s or estate’s taxable year.
beginning of the year and the net book values at the end of the
Calendar year 2007 returns are due by April 30, 2008.
year and dividing the sum by two. Any other method which
accurately reflects the average net book value for the year will
“Income from estates” means “income” as defined in Sec 643(b)
also be permitted.
of the Internal Revenue Code (IRC), properly paid, credited or
Line 1b: In column A enter the gross rentals for the year
distributed but not in excess of the resident individual’s share of
the distributable net income of the estate, decreased by the
multiplied by eight for all rented property regardless of location. In
amount of depreciation or depletion allowed the resident
column B enter the gross rentals for the year multiplied by eight
individual as a deduction under IRC section 642. The exceptions
for all rented property located in Albion. Gross rentals refer only to
for trusts are also applicable to income from estates. “Income
real property, rented or leased, and should include the actual
from trusts” means the amount of “income’ as defined in IRC
sums of money or other consideration payable, directly or
section 643(b), distributed or required to be distributed under IRC
indirectly by the taxpayer for the use or possession of such real
section 652(a) or 662(a)(1), decreased by the amount of
property for the year.
depreciation or depletion allowed the resident individual as a
Line 2: Enter in column A the total compensation paid to all
deduction by IRC section 642.
employees during the year. Enter in column B the amount of
Trusts and estates are not required to file City of Albion Estimated
compensation paid to employees for work done or services
Individual Income Tax Vouchers (AL-1040ES).
performed within the City of Albion during the year.
Taxable Income
Line 3: Enter in column A the total gross receipts from all sales or
That portion of the net profits from the operation of a
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services rendered during the year. Enter in column B the amount
business or enterprise operated by the estate or trust
of receipts derived from sales made or services rendered in the
that is attributable to business activity conducted in the
City of Albion during the year.
City of Albion whether or not such a business or
enterprise is located in Albion. For example, a business
Line 5: In determining the average percentage, a factor shall be
located outside of Albion that conducts business in
excluded only if it does not exist insofar as the taxpayers
Albion would be taxable on the portion of its net profits
business is concerned. In such cases, the sum of the
properly allocable to Albion business activities.
percentages must be divided by the number of factors used.
Net profits from rentals of real and tangible personal
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property located in Albion.
Schedule C – Resident Beneficiaries’ Share of Income and
Net profits from the sale or exchange of real and tangible
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Credits
personal property located in Albion.
The information for this schedule is taken from the comparable
Income from partnerships.
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columns of the U.S. 1041. However, only report that information
which applies to residents of Albion on form AL-1041. Fiduciaries
Line-by-Line Instructions for AL-1041, Page 1
report amounts in columns 4, 5 and 9 to each resident beneficiary
who will show these amounts as subtractions on the individual
Line 7: The total net profit (or loss) is to be computed from U.S.
return (AL-1040).
1041, page 1, by using those lines applicable to any business
operation.
Where to Mail your 2007 Return
Lines 10 and 11: You must complete Schedule A before
After computing your City of Albion income tax, if the tax due is
completing these lines.
one dollar ($1) or more it must be paid when filing this return.
Make check or money order payable to “City of Albion.”
Line 16: City of Albion resident beneficiaries report their portion
Write the estate’s or trust’s federal identification number and
of distributable net income on their individual returns and should
“2007 AL-1041” on the front of the check. Mail the completed AL-
receive this information from the Fiduciary. This line, which is a
1041 and payment (if tax is due) to:
resident’s share of the Albion income, should be subtracted from
City of Albion
line 15 to arrive at the amount of Albion income taxable to the
Income Tax Division
trust or estate.
112 West Cass St.
Albion, MI 49224-0900
Schedule A – Business Allocation Formula
Questions
The business allocation percentage formula is to be used by
If you have questions or need more information, call the City of
estates or trusts with business activity both within and outside
Albion at (517) 629-7865.
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