Instructions For Schedule L Of H-1040(R) - City Of Hamtramck Income Tax


Gain (or loss) from the Sale or Exchange of Property
General Information
Your residency status on the date that the sale or exchange
The Hamtramck Income Tax Ordinance imposes a tax rate of 1%
of property took place determines whether the sale or
on income of residents of Hamtramck, and 1/2% on that income of
exchange shall be considered as a transaction by a resident
nonresidents of Hamtramck which is subject to the Hamtramck income
or a nonresident.
tax. In addition, certain types of income may be taxed differently to
residents and nonresidents.
Sales or Exchange While a Resident - If the property was acquired
Schedule L of H-1040(R) provides a means whereby an individual
and sold after Oct 1, 1962 and you were a resident on the date of
can arrive at his total tax liability if, during the taxable year, he earned
sale use the same gain or loss on the property which appears on
part of his income as a resident of Hamtramck and part of his income
your Federal Retain. If the property was acquired prior to Oct 1,
as a nonresident
1962, see instructions on Resident individual Return H-1040(R)
Who Must Use Schedule L
on how to determine the taxable portion of the gain or loss. Gains
Schedule L must be filled out and attached to Form H-1040(R) if,
or loss from both tangible and intangible property are taxable to
during the taxable year, part of your income was earned as a resident,
residents. The location of the property is immaterial.
and part of your income subject to the Hamtramck tax was earned while
you were a nonresident. Do not use Schedule L unless you had income
Sale or Exchange While a Nonresident - Only that portion of the
subject to the Hamtramck tax both as a resident and in a nonresident.
gain or loss which occurred after Oct 1, 1962 from the sale or
Be sure to indicate the time period you were a Hamtramck resident
exchange of tangible property located in Hamtramck is taxable
by answering Question C on the Resident Individual Return Form
to nonresidents.
Computation of Taxable Income
Income from Estates and Trusts
Lines I and 5 of Schedule L describe the types of income that are
If you were a beneficiary of an estate or trust, enter in
subject to tax. Enter in column I (“All income Earned While a Resident
column I your share of the income from the estate or trust
of Hamtramck.”) the income subject to tax that was earned during the
while you were a resident Do not report your portion of the
year while a resident. Enter in column II (“Hamtramck Income While
income earned while you were a nonresident. The estate or
a Nonresident”), the income subject to tax that was earned during the
trust will file a return and pay the tax for nonresidents.
year while a nonresident.
Net Income (or low) from Business or Profession
You must attach schedules to support each amount entered on
Attach information for each separate business to support
Schedule L, lines 1 and 5. The schedule of each type of income should
entries on line 5(g)
show: (1) the total amount of resident income and the total amount of
Net Operating Loss Carryover
nonresident income earned during the period of time you were a
Line 5(h) must be used to deduct a net operating loss
resident and nonresident and (2) your computation of the portion of the
carryover from prior years. If line 5(h) represents only a net
total amount of each type of resident and nonresident income, which
operating loss carryover, circle these words on line 5(h). If
was subject to the Hamtramck tax, and which was used as a basis for
both miscellaneous income and operating loss carryover are
entry on lines 1 and 5 of Schedule L.
combined, attach a schedule showing the amount of each..
Instructions for the Individual Resident Form H-1040(R) and for the
Loss Transfers
individual Nonresident Form (H.1040(NR) should be carefully
When a loss exists on line 6 in either columns I or II and
reviewed before entries are made in columns I and II of Schedule L
there is income in the other column, line 7 must be used to
for each type of income
subtract the loss from the loss from the income column to
The following instructions for the specific types of income listed
arrive at the net income (or loss) on line 8.
below should be used in conjunction with the instructions for the
residents and nonresident forms.
Income from Employers
The amount allowed for exemptions is first applied against resident
All wages and salaries earned while a resident are to
income. If the amount allowed for exemptions exceeds resident
be reported, whether or not your work was performed in
income, such excess is then to be applied against nonresident income.
Hamtramck. That portion of your wages and salaries earned
Therefore, complete Schedule A of the Resident Individual Return
in Hamtramck as a nonresident is to be reported on the ratio
Form H-1 040(R) to arrive at the number of exemptions allowed; and
of the actual number of days worked in Hamtramck while a
then enter this total on Schedule L, column 1, line 9. If column 1, line
9, exceeds resident income, enter such excess in column II, line 11.
Deduction from Resident Long Form, Schedule M, page 2
Computation of Tax
See instructions under “Deduction and Exclusions” on page
The tax rate for residents is 1% The tax rate for nonresidents is 1/2%
2 of the Resident Long Form for description of the amounts to
on taxable income. Enter an Schedule L, line 13, 1% of the amount on
be entered on this line, Deductions applicable to nonresident
line 10, column I Enter on Schedule L, line 14,1/2% of the amount on
income to total nonresident income,
line 12, column 11. The total of lines 13 and 14 should be entered an
(5a b) Income from Dividends, Interest and Royalties
line 15. Transfer the amount appearing on Line 15 of Schedule L to
Enter in the resident column income from dividends,
line 14, of the Resident Individual Return, H-1040(R) and check the
interest and royalties while a resident. Income of this nature is
box on line 15 of H-1040(R)
not taxable to a nonresident. Dividend income received from
Completion of Resident Form H-1040(R)
taxable domestic corporations is subject to the same dividend
Schedule L is not a return in itself and must be attached to a Resident
exclusion as provided by the Federal Internal Revenue Code.
Individual Retain, Form H-1040(R). After entering your tax on line 12
Income (or loss) from Rents
of form H-1040(R) the instructions for the Resident Individual Return
All rental income earned while a resident is to be reported,
should be followed to complete the remaining sections of the return.
regardless of the location of the property. However, residents
Sign the return and attach your check and W-2 form to the left hand
should report only that portion of rental income derived from
side of Form H-1040(R) in the place designated.
the rental of real and tangible personal property located in


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