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Instructions for Form 4585

Michigan Business Tax (MBT) Investment Tax Credit Recapture

From Sale of Assets Acquired Under Single Business Tax

PA 282 of 2014 provides for a change to the Investment Tax Credit (ITC) Recapture. For assets purchased, acquired, or

transferred into Michigan in a tax year beginning after December 31, 2007, that were sold or otherwise disposed of, or

transferred outside Michigan during the tax year, recapture is now required to the extent and at the rate the credit was

used under the MBT. Taxpayers need to take special care after completing line 7 on this form and before carrying that

figure to Form 4570. Use the instructions below for line 7 in this section. DO NOT follow the instructions on the face of

the form for line 7.

may be reduced by selling expenses. Lines 1, 2, and 3 represent

Purpose

three different categories of SBT ITC assets, categorized by

To calculate the Investment Tax Credit (ITC) recapture amount

type of asset or nature of disposition.

for the disposition or transfer of tangible, depreciable real or

NOTE: A sale of qualifying property reported on the installment

personal property acquired in tax years beginning after 1999 and

method for federal income tax purposes causes a recapture of

prior to 2008 which must be recaptured to the extent used and at

the entire gross proceeds in the year of the sale. The recapture

the rate used under the Single Business Tax (SBT) or MBT. Form

is reduced by any gain reported in federal taxable income in

4585 must be filed as a supporting schedule for the total recapture

the year of the sale. The gain attributable to the installment sale

amount reported on the MBT Credits for Compensation,

that is reported in subsequent years increases the credit base (or

Investment and Research and Development (Form 4570).

reduces other sources of recapture) for those years, and must be

NOTE: Recapture is mandatory even if a taxpayer is otherwise

reported either on line 1, column C, or line 2, column C, based on

not required to file a return because it does not meet the filing

the type of asset.

threshold of $350,000.

Line 1: For depreciable tangible assets located in Michigan that

were acquired or moved into Michigan after acquisition in a tax

Line-by-Line Instructions

year beginning after 1999 and prior to 2008, and were sold or

otherwise disposed of during the tax year, enter the following:

Lines not listed are explained on the form.

• Column A: Separate the depreciable tangible assets that

REMINDER: Report all amounts in whole dollars. Round

were disposed of during the filing period by the tax year

down amounts of 49 cents or less. Round up amounts of 50

in which they were acquired. Use a separate row for each

cents or more. If cents are entered on the form, they will be

acquisition year. Enter the tax years of acquisition (end dates

treated as whole dollar amounts.

only) in chronological order, starting with the first tax year

Dates must be entered in MM-DD-YYYY format.

beginning after 1999. An acquisition year for which there

were no dispositions of depreciable tangible assets during

Name and Account Number: Enter name and account number

the filing period may be omitted. However, do not omit the

as reported on page 1 of Form 4567.

acquisition year of depreciable tangible assets that have

UBGs: Complete one form for each member that disposed of

been sold on an installment method if gains attributable to

capital assets that trigger SBT ITC credit recapture. Enter the

installment payments received during the current filing

Designated Member (DM) name in the Taxpayer Name field

period must be reported.

and the specific member of the UBG for which this form is

• Column B: Total gross proceeds from all depreciable tangible

filed on the line below. On the copy filed to report the DM’s

assets that were acquired in the same taxable year and

data (if applicable), enter the DM’s name and account number

disposed of during the filing period. If a qualifying asset was

on each line.

sold on an installment sale in a prior filing period, the entire

UBGs: If capital asset subject to recapture is from a member

sale price was reported for recapture purposes in the year of

that was not part of the group in the tax year the asset was

sale. Therefore, if a payment was received on that installment

sale in the current filing period, do not report that amount as

acquired (and other years since the acquisition), take care

to report in this line (and the others that pertain to years the

gross proceeds for this period. See Column C, however, with

member was not part of the group) information requested in

respect to the gain from that installment payment.

each column only from the member’s single filings, not the

• Column C: Net total gains/losses reflected in federal

group’s.

taxable income from all depreciable tangible assets that

were acquired in the same taxable year and disposed of

PART 1: CALCULATION OF SBT ITC RECAPTURE BASES

during the filing period. Report also in column C any

In Part 1, compute the adjusted proceeds (proceeds include any

gain reflected in federal taxable income that is attributed

benefit derived) from the disposition of tangible, depreciable

to an installment payment received during the current

real or personal property that was acquired in a tax year

MBT filing period, from a prior installment sale of an

beginning after 1999 and prior to 2008, and the recapture for

asset that was of a type and acquisition date covered by

property moved out of state. The calculation of gross proceeds

145

Form 4585 - Michigan Business Tax Investment Tax Credit Recapture From Sale Of Assets Acquired Under Single Business Tax - 2014 Page 3

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