Form 4580 - Michigan Business Tax Unitary Business Group Combined Filing Schedule For Standard Members - 2012 Page 15
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19deductions allowed by this subtitle which are attributable to
taxpayer’s facts and circumstances.
such trade or business, plus the distributive share (whether or
• The related person (recipient of the transaction) is organized
not distributed) of income or loss described in [IRC] 702(a)
under the laws of a foreign nation which has in force a
(8) from any trade or business carried on by a Partnership of
comprehensive income tax treaty with the United States.
which he is a member,” subject to certain exclusions, including
rentals from real estate, dividends and interest, and certain net
Line 37: There currently are no additions that are recorded on
this line. Leave this line blank.
operating losses and personal exemptions (IRC § 1402(a)).
Line 38: To the extent included in federal taxable income (as
Line 42: To the extent included in federal taxable income (as
defined for MBT purposes), enter any dividends and royalties
defined for MBT purposes), deduct the amount of a charitable
received from persons other than United States persons
contribution made to the advance tuition payment fund created
under section 9 of the Michigan education trust act, PA 316 of
and foreign operating entities, including, but not limited to,
amounts determined under IRC § 78 or IRC § 951 to 964.
1986, MCL 390.1429. This is deductible only to the extent that
contribution was NOT federally deductible.
Line 39: Enter any income included in federal taxable income
(as defined for MBT purposes) that is attributable to other
Enter on this line the income included on line 30 that resulted
entities that have made a valid election to file and have filed
from the agricultural activity of a person whose primary
under the MBT. If this member owns an interest in only one
activity is the production of agricultural goods.
such entity, list that entity’s FEIN or TR number in the field
Enter on this line the income included on line 30 that resulted
on the form. If this member owns interests in more than one
from the production of oil and gas if that production of oil and
such entity, enter on the form the FEIN or TR number of one
gas is subject to the Severance Tax on Oil or Gas, 1929 PA 48.
of the entities and attach a list of the account numbers of all.
On the list include a breakdown of the amount of this income
Line 44: Enter any unused MBT business loss carryforward
subtraction that is attributable to each entity. In any case, the
from the MBT return for the preceding year. Deduct any
amount on line 39 should be the total of all income, not just
available business loss incurred after December 31, 2007.
the income of the one entity identified on the form. This
Business loss means a negative business income tax base after
allocation or apportionment. The business loss will be carried
subtraction includes income attributable to this member’s
ownership interest in another member of the UBG, to the
forward to the year immediately succeeding the loss year as
extent that income was included in this member’s federal
an offset to the allocated or apportioned Business Income Tax
taxable income (as defined for MBT purposes).
base, then successively to the next nine taxable years following
the loss year or until the loss is used up, whichever occurs first,
Line 40: To the extent included in federal taxable income (as
but for not more than ten taxable years after the loss year.
defined for MBT purposes), deduct interest income derived
This line is used only by the DM and by any member that
from United States obligations.
had its own MBT business loss carryforward (hereafter, loss
Line 41: To the extent included in federal taxable income (as
carryforward) when it joined this group. That latter category
defined for MBT purposes), deduct any earnings that are net
includes a member that generated loss carryforward on a
earnings from self-employment as defined under IRC § 1402 of
separately filed MBT return, and a member that left another
the UBG member reporting here, or a partner or LLC member
UBG and took its share of that group’s loss carryforward.
of the UBG member reporting here, except to the extent that
On the DM’s copy of this form, enter loss carryforward from the
those net earnings represent a reasonable return on capital. If
group’s immediately preceding Form 4567 (2011, line 47), less
less than zero, enter zero.
any part of that loss carryforward attributable to members that
Under IRC § 1402, the business income of an Individual
had their own loss carryforward when they joined the group,
or sole proprietor, and a partner’s distributive share of
and less any part of that carryforward subsequently taken by
Partnership income, whether distributed or not, from any
departing members (see below). In calculating this division of
trade or business carried on by the Partnership, may be
the loss carryforward from the prior return, keep in mind that
considered self-employment income (with certain statutory
loss carryforward consumed on a return always is the oldest
exceptions), and subject to the Federal Self-Employment Tax.
available on that return, regardless of whether the oldest loss was
Therefore, a sole proprietorship or Partnership may deduct
generated by the group or brought by an incoming member. Loss
any income subject to the Federal Self-Employment Tax when
carryforward of a UBG, including loss carryforward brought
computing the MBT Business Income Tax Base. Shareholders
by an incoming member, ages according to the tax years of the
of Corporations, including S Corporations, are not subject
group, rather than tax years of any particular member.
to the Federal Self-Employment Tax, and, as a result, no
On any non-DM member’s copy of this form, loss carryforward
deduction is allowed for earnings from self-employment
income for corporate entities. There is no deduction allowed
brought to this group by an incoming member is determined by
two different methods, depending on when the member joined
for S Corporation distributions that is equivalent to the
self-employment deduction allowed for Partnerships and sole
this group:
proprietorships under MBT.
• To report activity of a member that joined this group in the
group’s tax year prior to the current filing period, or earlier, and
Net earnings from self-employment under IRC § 1402 generally
brought loss carryforward with it, enter the portion of the loss
means “the gross income derived by an Individual from
carryforward from the group’s immediately preceding Form
any trade or business carried on by such Individual, less the
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