Form 4567 - Michigan Business Tax Annual Return

can demonstrate that the transaction has a nontax business

line. If both types apply, enter the combined total as a single

purpose other than avoidance of this tax, is conducted with

amount.

arm’s-length pricing and rates and terms as applied in

A) For tax years that begin after December 31, 2009, to

accordance with IRC § 482 and 1274(d), and satisfies one of

the extent included in federal taxable income, deduct

the following:

the amount of a charitable contribution made to the

• Is a pass-through of another transaction between a third

Advance Tuition Payment fund created under section 9

party and the related person with comparable rates and

of the Michigan Education Trust Act, PA 316 of 1986,

terms.

MCL 390.1429. This is deductible only to the extent that

• Results in double taxation. For this purpose, double

contribution was NOT federally deductible.

taxation exists if the transaction is subject to tax in another

B) On a fiscal 2014-15 tax return, enter the Book-Tax

jurisdiction.

deduction to the extent available. The deduction is only

• Is unreasonable as determined by Treasury, and the taxpayer

available to a taxpayer that reported a Book-Tax amount on

agrees that the addition would be unreasonable based on the

Form 4593 with an original 2008 MBT annual return. This

taxpayer’s facts and circumstances.

deduction is not available on a return for a tax year ending

• The related person (recipient of the transaction) is organized

in 2014.

under the laws of a foreign nation which has in force a

The Book-Tax deduction is calculated as follows:

comprehensive income tax treaty with the United States.

1) Total of amount reported on Column C of Form 4593

Line 35: There currently are no additions required that are

with the original 2008 MBT annual return. (For UBGs,

recorded on this line. Leave this line blank.

compute the sum of the amounts reported by all current

members of the group who filed Form 4593.)

Subtractions from Income

2) Calculate the amount needed to offset the net deferred

Subtractions are generally available to the extent included in

tax liability of the taxpayer which results from the

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

imposition of the business income tax, at a rate of 4.95%,

and the modified gross receipts tax, at a rate of 0.8%,

Line 38: Enter any dividends and royalties received from

calculated for the first fiscal period ending after July 12,

persons other than United States persons and foreign operating

entities, including, but not limited to, amounts determined

2007.

under IRC § 78 or IRC § 951 to 964.

3) Take the lesser of the result of (1) or (2).

Line 39: Enter any income included in federal taxable income (as

defined for MBT purposes) that are attributable to other entities

4) For a fiscal 2014-15 tax return, report on this line 4%

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

of the result of step (3). The remaining 96% of the amount

filed under the MBT. If there is only one such entity to report,

from step (3) will be deductible in future years.

enter its FEIN or TR number in the field on this form. If there is

A taxpayer claiming the Book-Tax deduction must maintain

more than one such entity to report, enter on the form the FEIN or

records and work papers necessary to support the calculation

TR number of one of the entities and attach a list of the account

and journal entry identified for the same length of time that the

numbers of all. On the list include a breakdown of the amount of

deduction is available, and to support a potential audit of the

this income subtraction that is attributable to each entity. In any

taxpayer’s business by the Michigan Department of Treasury.

case, the amount on line 39 should be the total of all income, not

just the income of the one entity identified on the form.

Line 45: If line 45 is negative, enter as a negative number. A

loss on line 45 will create (or increase) the MBT business loss

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

carryforward for the next year.

connection with this line item because all entities for which an

income subtraction is being reported have been identified on

Line 46: Deduct any available MBT business loss incurred

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

after December 31, 2007. Enter as a positive number.

as an attachment to Form 4580.

Business loss means a negative business income tax base, after

Line 40: To the extent included in federal taxable income (as

apportionment, if applicable.

defined for MBT purposes), deduct interest income derived

Only an MBT business loss may be used and only from prior

from United States obligations.

consecutive years when the taxpayer was an MBT taxpayer.

Line 41: To the extent included in federal taxable income (as

NOTE: MBT business loss carryforward is not the same as

defined for MBT purposes), deduct any earnings that are net

the federal net operating loss carryforward or carryback.

earnings from self-employment as defined under IRC § 1402

It also is not the same as the Single Business Tax business

of the taxpayer, or a partner or LLC member of the taxpayer.

loss carryforward, which was partially allowed against the

The amount deducted shall be the amount properly reported

Modified Gross Receipts tax base only for tax years ending

on a schedule K-1-form 1065 as self-employment earnings for

in 2008. It is also not the same as a Corporate Income Tax

federal income tax purposes for the tax year.

business loss carryforward. Neither a SBT business loss

Line 42: There are two items that qualify for entry on this

carryforward nor a CIT business loss carryforward may be

Form 4567 - Michigan Business Tax Annual Return - 2014 Page 12

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