Form J-1065 - Filing Instructions - Jackson Mi Income Tax Division

Schedule B – Income from Dividends and Interest

individuals, unless they have additional income (from which Jackson

income tax was not withheld) on which the Jackson tax is expected to

Line 2. Interest from obligations of the United States, the states,

exceed $100. The fiscal year of the partnership will govern in

or subordinate units of government of the states, are exempted from

establishing the dates for filing the declaration and paying the

the tax. If they have been included in the total on line 1 they should

estimated tax.

be deducted here.

Income: Instructions for Page 1

Line 4. Use line 4 to exclude dividends and interest applicable

Exclusions: Column 2, Dividend Exclusion, 50% Capital Gains

to nonresident partners since dividends and interest are not taxable

Deduction and Other Deductions. Any items of income which are

to nonresidents.

non-taxable and which are included in Column 1 of this section may

be deducted in Column 2.

When the receipt of interest and other intangible income is directly

related to the nature of the business, such interest, etc., shall be

If analysis of Column 7, of Schedule I, Page 3, indicates a net long

considered as business income taxable to nonresidents.

term capital gain, the capital gains deduction of 50% of the excess of

Schedule E – Sale or Exchange of Property

net long term capital gains over net short term capital loss is to be

deducted in Column 2, Page 1.

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

If analysis of Column 7, Schedule I on Page 3 indicates that a net

same basis, as under the Federal Internal Revenue Code.

capital loss has been realized by any of the partners, the amount of the

excess of the net capital loss included in column 7, Schedule I, page 3

Only the amount of the gain or loss occurring from Jan. 1, 1970, to

over he partner’s allowable capital loss deduction must be added back

date of disposition shall be recognized for purposes of the Jackson

in Column 2, Page 1. The allowable capital loss deduction for each

income tax. The amount of gain or loss occurring after Jan. 1, 1970, is

partner is the lower of (1) the net capital loss, (2) the amount in

to be determined by either (1) computing the difference between the

Column 1, Page 1, computed without regard to capital gains and

Jan. 1, 1970 fair market value (Jan. 1 closing price for traded

losses, or (3) $1,000.00.

securities) or the cost if the date acquired was subsequent to Jan. 1,

1970 and the proceeds from the sale or exchange, or (2) by using the

If the partnership is filing an information return only, the individual

gain or loss for the entire holding period, as computed for the Federal

partners will report their distributive shares of the partnership’s sales

income tax purposes, and computing the taxable portion of such gain

and exchanges of property on their individual J-1040 returns in the

or loss on the ratio that the number of months held in the period

same manner as provided by the Federal Internal Revenue Code.

subsequent to Jan. 1, 1970 is to the total time the property was held.

Any deduction other than the dividend exclusion allowed by

Schedule F – Income (or loss) from Rents and Royalties

the Federal Internal Revenue Code must be explained in

Lines 1 and 2. Income or loss from rents from tangible property

an attached schedule.

located in Jackson is taxable to both residents and nonresidents.

Income or loss from royalties, and rents of property located outside

Exemptions – Column 3. Exemptions are allowed for each partner

Jackson, is not taxable to nonresidents.

and his or her dependents. An exemption of $600 is allowed for the

partner, the partner’s spouse, and each dependent. In general, the same

Schedule G – Income from Other Partnerships, etc.

rules apply in determining dependents as under the Federal Internal

Revenue Code. A spouse may be taken as an exemption on the

Line 1. Enter here the amount taxable to residents only. If all

partnership return only if such spouse has no income subject to the

members of the partnership are residents it will not be necessary to

Jackson income tax and taxpayer contributes at least 50% of his (her)

complete line 2 of this schedule. Enter the full amount received from

support. Additional exemptions are allowed if the partner or his

other partnerships in Column 1. If any interest on governmental

spouse is over 65, or blind.

obligations is included in the total, deduct such amounts in Column 2

and show the net amount in Column 3.

Total Tax. Columns 5,6 and 6(1). Enter the tax computed at 1% for

resident partners in Column 5, the tax computed at 1/2% for

Whenever the members of a partnership include both residents and

nonresident partners in Column 6 and the total tax (the sum of

nonresidents of Jackson it will be necessary to analyze the type of

Columns 5 and 6) in the box designated 6(1).

income received form other partnerships. This is necessary since the

income received from such other partnerships may include amounts

Credits. Column 7. Enter in Column 7. Enter in column 7:

for business activity outside Jackson. It may also include amounts for

Payments made by the partnership for tax paid with a tentative return;

dividends and interest. Some elements of this income are taxable to

or for payments on prior year Declaration of Estimated Income Tax, or

both residents and nonresidents, some to residents only. Attach a

any payments and credits made by the partnership on behalf of

schedule of your analysis or computations.

Jackson resident partners for income taxes to any other municipality,

Schedule I – Summary of Schedules A, B, E, F, and G

if the income on which such tax was levied is included in his return.

Do not take credit for income taxes paid another municipality on

Column 1. If additional first year depreciation is included in Federal

behalf of partners who are not Jackson residents. The credit shall be

Form 1065, and if the partners have unequal credits for such

the lesser amount of either (1) the income tax paid the other

additional first year depreciation (e.g. if one partner is single and one

municipality, or (2) the amount of tax that would be due to the City

is married filing jointly for Federal income tax purposes) the

of Jackson on earnings in the other municipality.

apportionment of income to partners in this column will require

special computation.

All credits of Column 7 are to be distributed on lines 7a, b, and c

and totaled on line 8. The total of line 8 must agree with the total of

Tax Due or Refund

column 7.

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

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

Schedule A – Ordinary Income from Business

overpayment on Page 1, line 10 and check the box on line 11 or 12 to

This schedule is used to indicate all of the ordinary income of the

indicate disposition of overpayment. Refunds will be made as quickly

partnership which may be subject to the Jackson income tax. Line 14

as possible, but please allow 90 days before making any inquiry.

of the Schedule, therefore, will show the total partnership income to

Refunds of less than one dollar ($1.00) will not be made. Tax due of

account for. Schedules B, E, F and G will then be filled out to compute

less than one dollar ($1.00) need not be paid.

the taxable portion of the other partnership income. These taxable

amounts are then compiled in the Summary Schedule I on Page 3. The

Assistance

amounts shown in Column 10 of Schedule I for each partner are to be

If there are questions not answered in these instructions, call 788-

transferred to the income section on Page 1 Column 1. If the

4044, or visit the Income Tax Division. Questions by mail should be

partnership elects to pay the tax, fill in lines 7 through 11.

directed to: Income Tax Division, City Hall, Jackson, Michigan 49201.

Line 2. If the Jackson or Federal income tax has been included as an

expense in Schedule C, it should be added back here.

Form J-1065 - Filing Instructions - Jackson Mi Income Tax Division - 2006 Page 2

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