Form 4580 - Michigan Business Tax Unitary Business Group Combined Filing Schedule For Standard Members - 2012 Page 16
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19Income and Expenses of a Partnership or an S Corporation
4567 that is attributable to this member.
• To report activity of a member that joined this group during
(U.S. Form 8825) to determine its taxable income attributable
the group’s current filing period and brought loss carryforward
to residential rental units in Michigan. To the extent that the
QAHP is taxed as something other than a Partnership or S
with it, enter the entire amount of loss carryforward brought by
Corporation, the QAHP may use the Supplemental Income and
this member.
Loss (U.S. Form 1040, Schedule E) or the relevant portions of
Loss carryforward generated by the group is maintained by
the U.S. Corporation Income Tax Return (U.S. Form 1120),
Treasury under the DM’s account. Loss carryforward brought
as appropriate. If the QAHP is a Corporation, the expenses
to the group by a joining member is maintained by Treasury
permitted should be limited to those also listed on the Low-
Income Housing Credit Agencies Report of Noncompliance or
under that member’s account, until it expires, is fully used, or
is taken from the group when that same member departs. If
Building Disposition (U.S. Form 8823) and U.S. Form 1040,
these instructions are not followed carefully, loss carryforward
Schedule E. Rental receipts and expenses must be calculated
available for use by the group in the current filing period will
without regard to any gain or loss resulting from the disposition
be miscalculated.
of rental property. Also, since Partnerships are subject to tax
as a person under MBT, flow-through amounts from other
When membership of a UBG changes, the business loss
carryforward of the UBG is divided among the UBG and the
Partnerships are not considered.
departing member(s) in proportion to the losses the member(s)
Improvements that increase the value of the property or extend
would have generated had each member filed separately for all
its life, such as replacing a roof or renovating a kitchen, are
MBT periods that contribute to the loss.
not deductible rental expenses. Any passive activity loss
limitations applicable to the QAHP’s federal return also apply
Additional direction is found in the “Supplemental Instructions
for purposes of MCL 208.1201(7).
for Standard Members in UBGs” section in Form 4600.
Line 45d: Rent restricted unit means a residential rental
NOTE: MBT business loss carryforward is not the same as
unit’s rental income is restricted in accordance with IRC §
the federal net operating loss carryforward or carryback,
42(g)(1) as if it was a qualified low-income housing project,
the SBT business loss carryforward, or the CIT business loss
or receives rental assistance in the form of HUD section 8
carryforward. Only a MBT business loss carryforward may
subsidies or HUD housing assistance program subsidies, or
be entered on this line and applied against the MBT business
rental assistance from the U.S. Department of Agriculture rural
income tax base. For a fiscal year taxpayer filing this return
housing programs, or from any of the other programs described
for the period beginning January 1, 2012, this would include
in MCL 208.1203(8)(b).
a business loss created or claimed on the fiscal year taxpayer’s
MBT return for the period ending December 31, 2011.
Line 45e: This includes rent restricted and unrestricted
residential rental units owned by the QAHP in Michigan.
Line 45: QAHP deductions. Members claiming the seller’s
deduction, skip lines 45a through 45h and carry the amount
Line 45h: The QAHP’s deduction is reduced by the amount of
from Form 4579, line 5, to line 45i. Members claiming the
limited dividends or other distributions made to the owners of
QAHP deduction, complete lines 45a through 45i.
the project. Income received by the management, construction,
or development company for completion and operation of the
PA 168 of 2008 provides for a deduction from the apportioned
project and rental units does not constitute taxable income
Business Income Tax base to a QAHP and a seller of residential
attributable to residential rental units.
rental units to a QAHP. Qualified Affordable Housing Project
is defined under instructions for line 24.
Line 45i: The seller may take a deduction from its apportioned
Business Income Tax base equal to the gain from the sale of
The QAHP may deduct from its apportioned Business Income
the residential rental units to the QAHP, as calculated on
Tax base an amount equal to the product of the taxable income
the MBT Qualified Affordable Housing Seller’s Deduction
attributable to residential rental units in Michigan it owns
(Form 4579). Enter the amount from Form 4579, line 5. (All
multiplied by a fraction, the numerator of which is the number
MBT forms, including Form 4579, are available online at
of rent restricted units in Michigan owned by that QAHP and
)
the denominator of which is the number of all residential rental
units in Michigan owned by the project. MCL 208.1201(8)
When the seller claims a deduction for the year of sale, the
governs the termination of this deduction.
State will place a lien on the property equal to the amount of
the seller’s deduction. If the buyer fails to qualify as a QAHP
The seller’s deduction is described in the instructions to line
or fails to operate any of the residential rental units as rent
45i.
restricted units in accordance with the operation agreement
within 15 years after the date of purchase, the lien placed on
Lines 45a through 45c: In general, taxable income attributable
the property for the amount of the seller’s deduction becomes
to residential rental units is gross rental receipts attributable
payable to the State. The lien is payable through a “recapture”
to residential rental units in Michigan less rental expenses
to be added to the tax liability of the buyer in the year the
attributable to residential rental units in Michigan, including,
recapture event occurs. The recapture is calculated on MBT
but not limited to, repairs, interest, insurance, maintenance,
Schedule of Recapture of Certain Business Tax Credits and
utilities, and depreciation.
Deductions (Form 4587), and is reduced proportionally for the
Specifically, Partnerships may use a Rental Real Estate
number of years the buyer qualified for the deduction.
120
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