Michigan Tax Amnesty And Tax Returns Guide And Instructons Page 27
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41INSTRUCTIONS FOR C-8000KP
SCHEDULE OF PARTNERS
Purpose: For all partnerships to determine eligibility
STATUTORY EXEMPTION
for the partnership’s standard small business credit or
Part 2, lines 4 and 5.
alternate tax and which partners qualify for the increased
Line 5: Enter the total number of partners who qualify
exemption.
for the increased exemption. Enter this same number on
Note: For the purposes of computing the statutory
Form C-8043, line 8a.
exemption and the small business credit, a member of an
For short-period returns or part-year partners, the
LLC is treated as a partner if the LLC is taxed as a
partner’s share of business income must be annualized to
partnership.
meet this requirement.
For claiming an increased statutory exemption, a
Note: A person cannot be a qualified partner or
qualified partner is one who:
shareholder in more than one business.
• spends at least 51 percent of his or her time working in
Example of Qualified Partners. Business
the business, i.e., column C is 51 percent or more, and
Income reported on Form C-8000, line 11,
• owns at least 10 percent of the business, i.e., column D
equals $34,000, which includes guaranteed
is 10 percent or more, and
payments to partners of $18,000. Guaranteed
• has a share of business income in column E of at least
payments to partners are assigned to the
$12,000.
appropriate partner, in this case $9,000 each
to partners A and B. Each partner's distributive
Lines not listed here are explained on the form.
share of the remaining income is then
Line 2, Account Number. Enter the same account
calculated based on the percentage of the
number used on page 1 of your annual return.
partnership owned.
PARTNER IDENTIFICATION
Partners
%Time
%Own
Share
Part 1, line 3 (Columns A-E).
A
100
25
$13,000
Column C: Enter the percentage of each partner’s time
B
100
25
$13,000
that is spent working in the business.
C
0
50
$ 8,000
Column D: Enter the percentage of profits or capital
Only partners A and B of this partnership
interest of this partnership owned by each partner. If a
qualify. Both A and B devote at least 51
partner owned this interest for a period less than the
percent of their time, own at least 10 percent of
partnership’s tax year, multiply that partner’s percentage
the business and have business income of at
of ownership by the number of months owned and divide
least $12,000. Business income of A and B
the result by the number of months in this partnership’s
includes $4,000 ordinary income plus $9,000
tax year.
guaranteed payments.
Column E: Enter each partner’s distributive share of
income, losses and deductions from U.S. 1065, Schedule
Attach this schedule to your return.
K-1. See partnership business income on Worksheet 3,
page 16, in this booklet. Each partner’s distributed share
includes guaranteed payments to partners. If any partner
has a share of business income in column E of over
$115,000, the partnership is not eligible for the standard
small business credit or the alternate credit.
48
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