Form 4891 - Michigan Corporate Income Tax Annual Return

• Proceeds from an insurance policy, settlement of a claim,

be added back, for CIT purposes, in the Additions to Business

or judgment in a civil action, less any proceeds that are

Income section, below.

included in federal taxable income

NOTE: See the discussion of Public Act 233 of 2013 in the

• Proceeds from the taxpayer’s transfer of an account

“Important Information for 2014” section of the general

receivable, if the sale that generated the account receivable

instructions.

was included in gross receipts for federal income tax

Agricultural activities: Include income from the production

purposes. This provision will not apply to a taxpayer who

of agricultural activities on line 12. Farms are not exempt under

both buys and sells any receivables during the tax year.

the CIT. Furthermore, the tax base attributable to the production

of agricultural goods by a person whose primary activity is the

production of agricultural goods is similarly not exempt.

WORkShEET ON FLOW-ThROUGh GROSS RECEIPTS

UBGs: Enter here the sum of all members Form 4897, line 21.

A taxpayer must complete the following calculation for each Flow-Through

Entity (FTE), whether unitary or not, that does not elect to file an MBT

Line 13: UBGs: Enter here the sum of all members Form 4897,

return for this tax year and from which the taxpayer receives distributive

line 22.

share of income. The amount in line 5 of this worksheet for each FTE must

be added, and the sum carried to Form 4891, line 10b.

Line 14: There are currently no miscellaneous items to be

entered on this line. Leave this line blank.

1. FTE’s gross receipts that fall

with or within the taxpayer’s tax

Line 15: Adjustments are required for all assets placed into

year included in this return ........

service after December 31, 2007, for which bonus depreciation

2. Percentage of the FTE’s

was taken.

income or loss received by the

taxpayer .....................................

Line 15a: For the computation of business income for CIT,

persons who claimed a federal special depreciation deduction

3. Gross receipt amount before

under IRC § 168(k) on property first placed in service in 2008

apportionment. Multiply line 1

by line 2 ......................................

or later must calculate the net bonus depreciation adjustment

on those assets as follows: net bonus depreciation adjustment in

4. FTE’s apportionment

percentage (Michigan sales

tax year equals the total federal depreciation claimed in tax year

divided by total sales)*...............

less the total amount of depreciation that would be claimed in

5. Flow-through gross receipts

the federal return in the tax year if the person had elected not

to be imputed to the taxpayer.

to utilize the bonus depreciation allowance at IRC § 168(k). A

Multiply line 3 by line 4 ..............

person may not elect IRC § 179 expensing of an asset for MBT

or CIT purposes if it did not elect to use IRC § 179 for that asset

*Line 4: If the FTE is unitary with the taxpayer, use the apportionment

percentage from line 9g. Otherwise, use the FTE’s apportionment

federally.

percentage.

Line 15b: For the computation of business income for CIT

purposes, persons who claimed a federal special depreciation

deduction under IRC § 168(k) on property first placed in service

Line 11: Calculate the taxpayer’s total apportioned gross

receipts for filing threshold by multiplying Line 10a by the

in 2008 or later and subsequently disposed of that property in

the current tax year must calculate the gain/loss adjustment on

percentage on Line 9g, and adding that amount to Line 10b.

Do not leave this field blank.

the sale of those assets as follows: gain/loss adjustment in tax

year equals the total amount of federal depreciation that would

Gross Receipts Filing Threshold: Taxpayers with allocated or

be claimed in the federal return over the years (starting the

apportioned gross receipts of less than $350,000 do not have to

year the asset was placed in service and ending on the current

file a CIT return and do not have to pay the tax imposed by

tax year) if the person had elected not to utilize the bonus

the CIT. For periods less than 12 months, this amount must be

depreciation allowance at IRC § 168(k) on the property being

annualized. To annualize this amount, multiply the taxpayer’s

disposed LESS the total federal depreciation claimed over the

total apportioned or allocated gross receipts figure by 12 and

years (starting the year asset was placed in service and ending

divide the result by the number of months in the taxpayers’ tax

on the current tax year). A person may not elect IRC § 179

year. Do not enter annualized figures on this line.

expensing of an asset for MBT or CIT purposes if it did not elect

UBGs: Calculate the apportioned gross receipts figure for filing

to use IRC § 179 for that asset federally.

threshold purposes by multiplying the amount on line 10a by the

UBGs: Enter the sum here (line 15) of all members Form 4897,

apportionment percentage on line 9g, and adding to that product

line 24.

the amount on line 10b. Because figures entered on lines 10a

Line 17: UBGs: Enter here the sum of all members Form 4897,

and 10b represent the sum of annualized member figures (when

line 25.

applicable), no further annualization is required on line 11.

NOTE: Elimination, where required, applies to transactions

PART 1: CORPORATE INCOME TAX

between any members of the UBG supported by this form. For

example, if the UBG includes standard taxpayers (not owned by

Line 12: Federal taxable income, as reported on this line, is

and unitary with a financial institution in the UBG), an insurance

defined for CIT purposes to include carryback and carryover

company, and a financial institution with nexus, transactions

of federal net operating losses. Note that these amounts will

Form 4891 - Michigan Corporate Income Tax Annual Return - 2014 Page 8

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