Form 4580 - Michigan Business Tax Unitary Business Group Combined Filing Schedule For Standard Members - 2013 Page 15
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18Line 45: If taking the QAHP deduction only, complete lines
the group’s immediately preceding Form 4567 (2011, line 47),
45a through 45i. If taking the seller’s deduction only, skip lines
less any part of that loss carryforward attributable to members
45a through 45h and carry the amount from Form 4579, line
that had their own loss carryforward when they joined the
group, and less any part of that carryforward subsequently
5, to line 45i. If taking both deductions, complete the QAHP
taken by departing members (see below). In calculating this
deduction calculation on lines 45a through 45h, and add to the
total at line 45i the amount from Form 4579, line 5.
division of the loss carryforward from the prior return, keep
in mind that loss carryforward consumed on a return always
PA 168 of 2008 provides for a deduction from the apportioned
is the oldest available on that return, regardless of whether
Business Income Tax base to a QAHP and a seller of residential
the oldest loss was generated by the group or brought by an
rental units to a QAHP. Qualified Affordable Housing Project
incoming member. Loss carryforward of a UBG, including loss
is defined under instructions for line 24.
carryforward brought by an incoming member, ages according
The QAHP may deduct from its apportioned Business Income
to the tax years of the group, rather than tax years of any
Tax base an amount equal to the product of the taxable income
particular member.
attributable to residential rental units in Michigan it owns
On any non-DM member’s copy of this form, loss carryforward
multiplied by a fraction, the numerator of which is the number
brought to this group by an incoming member is determined by
of rent restricted units in Michigan owned by that QAHP and
two different methods, depending on when the member joined
the denominator of which is the number of all residential rental
this group:
units in Michigan owned by the project. MCL 208.1201(8)
• To report activity of a member that joined this group in the
governs the termination of this deduction.
group’s tax year prior to the current filing period, or earlier,
The seller’s deduction is described in the instructions to line
and brought loss carryforward with it, enter the portion
45i.
of the loss carryforward from the group’s immediately
preceding Form 4567 that is attributable to this member.
Lines 45a through 45c: In general, taxable income attributable
• To report activity of a member that joined this group
to residential rental units is gross rental receipts attributable
during the group’s current filing period and brought loss
to residential rental units in Michigan less rental expenses
attributable to residential rental units in Michigan, including,
carryforward with it, enter the entire amount of loss
but not limited to, repairs, interest, insurance, maintenance,
carryforward brought by this member.
utilities, and depreciation.
Loss carryforward generated by the group is maintained by
Specifically, Partnerships may use a Rental Real Estate
Treasury under the DM’s account. Loss carryforward brought
Income and Expenses of a Partnership or an S Corporation
to the group by a joining member is maintained by Treasury
(U.S. Form 8825) to determine its taxable income attributable
under that member’s account, until it expires, is fully used, or
to residential rental units in Michigan. To the extent that the
is taken from the group when that same member departs. If
QAHP is taxed as something other than a Partnership or S
these instructions are not followed carefully, loss carryforward
Corporation, the QAHP may use the Supplemental Income and
available for use by the group in the current filing period will
Loss (U.S. Form 1040, Schedule E) or the relevant portions of
be miscalculated.
the U.S. Corporation Income Tax Return (U.S. Form 1120),
When membership of a UBG changes, the business loss
as appropriate. If the QAHP is a Corporation, the expenses
carryforward of the UBG is divided among the UBG and the
permitted should be limited to those also listed on the Low-
departing member(s) in proportion to the losses the member(s)
Income Housing Credit Agencies Report of Noncompliance or
would have generated had each member filed separately for all
Building Disposition (U.S. Form 8823) and U.S. Form 1040,
MBT periods that contribute to the loss.
Schedule E. Rental receipts and expenses must be calculated
without regard to any gain or loss resulting from the disposition
Additional direction is found in the “Supplemental Instructions
for Standard Members in UBGs” section in Form 4600.
of rental property. Also, since Partnerships are subject to tax
as a person under MBT, flow-through amounts from other
NOTE: MBT business loss carryforward is not the same as
Partnerships are not considered.
the federal net operating loss carryforward or carryback,
Improvements that increase the value of the property or extend
the SBT business loss carryforward, or the CIT business loss
its life, such as replacing a roof or renovating a kitchen, are
carryforward. Only a MBT business loss carryforward may
not deductible rental expenses. Any passive activity loss
be entered on this line and applied against the MBT business
limitations applicable to the QAHP’s federal return also apply
income tax base. For a fiscal year taxpayer filing this return
for purposes of MCL 208.1201(7).
for the period beginning January 1, 2013, this would include a
Line 45d: Rent restricted unit means a residential rental
business loss created or claimed on the fiscal year taxpayer’s
unit’s rental income is restricted in accordance with IRC §
MBT return for the period ending December 31, 2012.
42(g)(1) as if it was a qualified low-income housing project,
NOTE: A member that acquires the assets of another
or receives rental assistance in the form of HUD section 8
corporation in a transaction described under section 381(a)
subsidies or HUD housing assistance program subsidies, or
(1) or (2) of the IRC may deduct any MBT business loss
rental assistance from the U.S. Department of Agriculture rural
carryforward attributable to that distributor or transfer or
housing programs, or from any of the other programs described
in MCL 208.1203(8)(b).
corporation.
119
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