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2006 MI-1041D, Page 3

Instructions for Form MI-1041D

Adjustments of Capital Gains and Losses

When To File

after the 15th, and the last month may be excluded if

disposal took place before the 15th.

Use this form to adjust your Michigan taxable income if

Gains from installment sales made before October 1, 1967,

the estate or trust has capital gains or losses that are

must show the federal gain in federal column D and zero in

attributable to:

Michigan column E. Gains or losses from installment sales

1. Periods before October 1, 1967 (Section 271

made after October 1, 1967, are subject to Michigan tax

adjustment). If you file U.S. 1041D or 4797, and you

but may be apportioned under Section 271.

elect to adjust under Section 271 of the Michigan Income

Distributions from employee’s pension, bonus or profit-

Tax Act, you must file the equivalent Michigan forms

sharing trust plans that are considered to be long-term capital

(MI-1041D or MI-4797). You must include all items

gains (under Section 402 of the Internal Revenue Code) and

of gain or loss realized during the tax year.

capital gains distributions are not eligible for Section 271

2. Gains or losses from the sale or exchange of U.S.

treatment. Enter the total gain in both the federal and state

obligations that cannot be taxed by Michigan.

columns.

3. Gains or losses from property subject to the allocation

U.S. Obligations. Gains from the sale or exchange of some

and apportionment provisions.

U.S. obligations are not subject to tax and losses are not

Schedule MI-1041D must be attached to your Michigan

deductible. Enter a zero in the Michigan column for gains

Fiduciary Income Tax Return (MI-1041).

or losses realized from the sale of these non-taxable U.S.

obligations.

General Information

Note: Any interest expense and other expenses incurred in

Page 1 of form MI-1041D follows the pattern of page 1 of

the production of income from U.S. obligations should be

the U.S. 1041D and all the information necessary for

entered on MI-1041, line 34. (See MI-1041 book

completing it should be taken from the U.S. 1041D. Each

instructions for line 34 on page 5).

transaction listed on the U.S. 1041D should be transferred

to the corresponding line on the MI-1041D and entered in

Capital gains or losses from the sale or exchange of

federal column D.

municipal bonds are taxable for Michigan residents.

Rounding Off

Out-of-State Property. Gains from the sale of property

located in another state are not subject to Michigan tax, and

Show money items as whole dollar amounts. Round down

losses are not deductible. Enter in the Michigan column the

amounts less than 50 cents. Round up amounts of 50 through

gain or loss from the sale or exchange of (1) real property

99 cents.

located in Michigan, or (2) tangible personal property located

Identification

in Michigan at the time of the sale or if the taxpayer was a

Michigan resident, or (3) intangible personal property sold

Enter the name of the estate or trust and the federal

by a Michigan resident.

employer identification number at the top of the MI-1041D.

Part 3: Lines 14, 15, and 16

Parts 1 and 2: U.S. Information

Column A. Enter the corresponding net short-term or

Complete columns A, B, C and D from corresponding

long-term gain/loss from column D (federal) and column

columns on the U.S. 1041D. Enter the date acquired, date

E (Michigan) in the appropriate boxes. Combine lines 14

sold and gains/losses realized in the appropriate columns. If

and 15, and enter the result on line 16.

the U.S. 1041D discloses capital assets reported under

Sections 1245 and 1250, these assets must be reported on

Column B. Enter the share of short-term and long-term

gains and losses retained by the fiduciary. Follow the

line 1 or line 6. Also, if capital assets are allocated to

instructions on the form for resident and nonresident

another state, they are excluded from the portion subject

to Michigan income tax. A capital loss carryover from

estates and trusts.

preceding years is entered as a short-term loss on line 4 or

Column C. Enter the share of short-term and long-term

as a long-term loss on line 12.

gains/losses distributed to the beneficiaries. Totals on line

16 should equal the totals on form MI-1041, Schedule 5,

Michigan Gain or Loss

line 79.

Section 271. To apportion under Section 271, multiply the

Part 6

gain/loss in federal column D by the number of months the

property was held after September 30, 1967. Divide the

If the net loss on line 16, column A, is more than $3,000,

result by the total number of months held. Enter the result

or if the taxable income on U.S. 1041, page 1, line 22 or

in Michigan column E. For the purpose of this computation,

990-T, line 34, is zero or less, complete this section to

the first month may be excluded if acquisition took place

determine the capital loss carryover.

Form Mi-1041d - Instructions For Form Mi-1041d Adjustments Of Capital Gains And Losses - 2006

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