Form 4897 - Corporate Income Tax Data On Unitary Business Group Members

If these criteria are all satisfied, this member must calculate

below). In calculating this division of the loss carryforward

from the prior return, keep in mind that loss carryforward

by the annual method. In this case, calculate the following

consumed on a return always is the oldest available on that

percentage and enter it in this cell:

return, regardless of whether the oldest loss was generated

Number of months in 2012

by the group or brought by an incoming member. Loss

of this member’s 2011-12 fiscal year

carryforward of a UBG, including loss carryforward brought

by an incoming member, ages according to the tax years of the

group, rather than tax years of any particular member.

If a proration percentage is calculated, enter answers based on

On any non-DM member’s copy of this form, loss carryforward

the member’s full 2011-12 federal tax year, multiplied by the

brought to this group by an incoming member is determined by

member’s proration percentage in lines 11, 12, and 14 through

two different methods, depending on when the member joined

32 for this member.

this group:

In the case of a standard taxpayer, if the method used by the

• To report activity of a member that joined this group in the

UBG is different from the method used by this member on

group’s tax year prior to the current filing period, or earlier, and

its MBT return for the period ending December 31, 2011, this

brought loss carryforward with it, enter the portion of the loss

member must amend its MBT return for the period ending

carryforward from the group’s immediately preceding Form

December 31, 2011 to achieve consistency. This restriction does

not apply to a financial institution because financial institutions

4891 that is attributable to this member.

• To report activity of a member that joined this group during

must use the annual method for short periods.

the group’s current filing period and brought loss carryforward

If the 2011-12 fiscal year of a UBG member other than the DM

with it, enter the entire amount of loss carryforward brought by

ends after the end of the first 2012 filing period of the UBG,

that member will not be included in the UBG’s first combined

this member.

return (except in Form 4896, as an excluded affiliate).

Loss carryforward generated by the group is maintained by

Treasury under the DM’s account. Loss carryforward brought

A member that is not included in the UBG’s initial filing

because its year ends after the UBG filing period may not

to the group by a joining member is maintained by Treasury

under that member’s account until it expires, is fully used, or

elect a method of filing when included in the UBG’s next

return. Such election is available only to the first tax year of

is taken from the group when that same member departs. If

these instructions are not followed carefully, loss carryforward

the taxpayer, which is the UBG. All subsequent returns must be

available for use by the group in the current filing period will

reported on an actual basis.

be miscalculated.

Line 14: Sale or Sales means amounts received by a member as

When membership of a UBG changes, the business loss

consideration from the following:

carryforward of the UBG is divided among the UBG and the

• Transfer of title to, or possession of, property that is stock

departing member(s) in proportion to the losses the member(s)

in trade or other property of a kind which would properly be

would have generated had each member filed separately for all

included in the inventory of the member if on hand at the close

CIT periods that contribute to the loss.

of the tax period, or property held by the member primarily for

Additional direction is found in the “Supplemental Instructions

sale to customers in the ordinary course of its trade or business.

for Standard Members in UBGs” section in Form 4890.

For intangible property, the amounts received will be limited to

any gain received from the disposition of that property.

Line 12: Enter, to the extent deducted in determining federal

• Performance of services which constitute business activities.

taxable income (as defined for CIT purposes), a carryback or

• Rental, leasing, licensing, or use of tangible or intangible

carryover capital loss from Schedule D of federal Form 1120.

Enter as a positive number.

property, including interest, that constitutes business activity.

• Any combination of business activities described above.

Line 13: The proration percentage applies only for the first

filing period ending in 2012 and only if all of the following are

• For a member not engaged in any other business activities,

satisfied:

sales include interest, dividends, and other income from

investment assets and activities and from trading assets and

• This member reports federal taxes on a fiscal year.

activities.

• The DM for the standard taxpayer return (i.e., Form 4891) of

this UBG reports federal taxes on a fiscal year.

If a member has nexus in Michigan and the member does

not establish nexus in another state, all sales are allocated to

• The DM for the standard taxpayer return of this UBG, on

Michigan. State is defined to include a foreign country. A

behalf of the UBG, elects to calculate the MBT filing period

member is subject to a tax in another state or foreign country

ending in 2012 using the annual method.

if, in that state or foreign country, the member is subject

If these criteria are not all satisfied, this member cannot

to a business privilege tax, a net income tax, a franchise tax

calculate by the annual method. Leave this line blank, and in

measured by net income, a franchise tax for the privilege of

lines 11, 12, and 19 through 32 for this member, enter answers

doing business, a Corporation stock tax, or a tax of the type

based on actual expenditures, receipts, and activities in the

imposed under the CIT Act, or that state has jurisdiction to

2012 portion of the 2011-12 fiscal year.

subject the member to one or more of such taxes regardless

Form 4897 - Corporate Income Tax Data On Unitary Business Group Members - 2012 Page 4

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