Form 4567 - Michigan Business Tax Annual Return

income derived from business activity. For MBT purposes,

NOTE: Personal investment income, gains from the sale of

federal taxable income means taxable income as defined by IRC

property held for personal use and enjoyment, or other assets not

used in a trade or business, and any other income not specifically

§ 63, except that federal taxable income shall be calculated as if

IRC § 168(k) [as applied to qualified property placed in service

derived from a trade or business that is earned, received, or

otherwise acquired by an Individual, an Estate, or a Trust or

after December 31, 2007] and IRC § 199 were not in effect. For

a Partnership or S Corporation (or LLC federally taxed as such),

Partnership organized or established for estate or gift planning

business income includes payments and items of income and

purposes, a person organized exclusively to conduct investment

expense that are attributable to business activity of the

activity solely for a third party individual or a person related

Partnership or S Corporation and separately reported to the

to that individual, or a common trust established under the

partners or shareholders.

Collective Investment Funds Act of 2941, is not included in the

Business Income Tax base. This exclusion only applies to the

Use the Business Income Worksheet (Worksheet 4746), in

specific types of taxpayers identified above. Investment income

Form 4600, to calculate business income. Attach the worksheet

and any other types of income earned or received by all other

to the return. The worksheet will calculate business income

types of persons or taxpayers not specifically referenced must be

as defined by law in most instances. Taxpayers and tax

included in the business income of the taxpayer.

professionals are expected to be familiar with uncommon

Additions to Income

situations within their experience, which produce business

income not identified by specific lines on the worksheet, and

Additions are generally required to the extent deducted in

report that amount on the most appropriate line. Treasury may

arriving at federal taxable income. (Business income, line 28.)

adjust the figure resulting from Worksheet 4746 to account

Line 29: Enter any interest income and dividends from

properly for such uncommon situations.

bonds and similar obligations or securities of states other than

For an organization that is a mutual or cooperative electric

Michigan and their political subdivisions in the same amount

that was excluded from federal taxable income (as defined for

company exempt under IRC § 501(c)(12), business income

equals the organization’s excess or deficiency of revenues

MBT purposes). Reduce this addition by any expenses related

over expenses as reported to the federal government by those

to the foregoing income that were disallowed on the federal

organizations exempt from the federal income tax under the

return by IRC § 265 or 291.

IRC, less capital credits paid to members of that organization,

Line 30: Enter all taxes on, or measured by, net income

less income attributed to equity in another organization’s net

including city and state taxes, Foreign Income Tax, and Federal

income, and less income resulting from a charge approved

Environmental Tax claimed as a deduction on the federal return.

by a state or federal regulatory agency that is restricted for

a specified purpose and refundable if it is not used for the

Line 31: Enter the Michigan Business Tax, including

specified purpose.

surcharge, claimed as a deduction on the federal return.

For a tax-exempt person, business income means only that

Line 32: Enter any net operating loss carryback or carryover

part of federal taxable income (as defined for MBT purposes)

that was deducted in arriving at federal taxable income (as

derived from unrelated business activity.

defined for MBT purposes) reported on line 28. Enter this

amount as a positive number.

For an Individual or an Estate, or for a Partnership or Trust

organized for estate or gift planning purposes, business income

Line 33: Enter any losses included in federal taxable income

is that part of federal taxable income (as defined for MBT

(as defined for MBT purposes) that are attributable to other

entities that have made a valid election to file under the MBT

purposes) derived from transactions, activities, and sources in

the regular course of the person’s trade or business, including

and have filed under the MBT. If there is only one such entity

the following:

to report, enter its FEIN or TR number in the field on this

• All income from tangible and intangible property if the

form. If there is more than one such entity to report, enter

acquisition, rental, lease, management, or disposition of the

on the form the FEIN or TR number of one of the entities

and attach a list of the account numbers of all. On the list

property constitutes integral parts of the person’s regular

trade or business operations.

include a breakdown of the amount of this loss add-back that

is attributable to each entity. In any case, the amount on line

• Gains or losses incurred in the taxpayer’s trade or business

33 should be the total of all losses, not just the loss of the one

from stock and securities of any foreign or domestic

entity identified on the form.

corporation and dividend and interest income.

• Income derived from isolated sales, leases, assignments,

UBGs: It is not necessary to attach a list of entities in

connection with this line item because all entities for which

licenses,

divisions,

other

infrequently

occurring

a loss add-back is being reported have been identified on the

dispositions, transfers, or transactions involving tangible,

corresponding line of Form 4580, or a similar list required as

intangible, or real property if the property is or was used in

an attachment to Form 4580.

the person’s trade or business operation.

• Income derived from the sale of an interest in a business that

Line 34: Enter any royalty, interest, or other expense paid to

a person related to the taxpayer by ownership or control for

constitutes an integral part of the person;’s regular trade or

the use of an intangible asset if the person is not included

business.

in the taxpayer’s UBG. Royalty, interest, or other expense

• Income derived from the lease or rental of real property

described here is not required to be included if the taxpayer

Form 4567 - Michigan Business Tax Annual Return - 2014 Page 11

Related Articles

Related forms

Related Categories