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INSTRUCTIONS FOR FORM I-1065
CITY OF IONIA PARTNERSHIP RETURN
For partnerships doing business in the City of Ionia
Filing Date and Remittance:
An annual return is due on or before the last day of the fourth month following the Partnership Filing an Information Return:
end the partnership's taxable year. Calendar year returns are due by April 30. Partnerships filing information returns are required to complete: page 2: Schedules A,
B, C and if appropriate Schedules D and E; and page 1: Identification and Information
Partnerships electing to pay the tax for partners must remit the tax for all partners section and column 1.
when filing the return. Tax due, if one dollar ($1.00) or more must be paid when the
return is filed. General Information:
Make remittance payable to: City of Ionia The Partnership Return, Form I-1065, is designed to distinguish between that income
Mail to: City of Ionia, Income Tax Division, PO Box 512, Ionia, MI 48846 taxed to residents, nonresidents and corporations. The purpose of the return is to set
forth the entire net profit for the period covered and to show the distributive share of
Partnerships Required to File a Return (I-1065) each partner, indicating those who are residents of Ionia, nonresidents or corporations.
Every partnership that has conducted business activities in the City of Ionia after (If residency changes during the taxable period for any partner, use two lines to
January 1, 1994, whether or not an office or place of business was maintained in the indicate allocation of income by residency status in all schedules where applicable.)
City, is required to make and to file an annual return. Syndicates, joint ventures,
pools and like organizations will also use form I-1065 (Partnership Return). So-called
"tax option" corporations or S corporations (under Sections 1371-1377, Internal Ordinary business income of the partnership is reported in Schedule A. This ordinary
Revenue Code) must file as corporations on form I-1120. business income is transferred to Schedule C, column 1, by showing the amount of
ordinary income distributable to each partner.
Option to pay tax and applicable tax rates:
The partnership may elect to file an information return or to compute and pay the tax Non-business income that may be taxable is reported in Schedule B, by type of
due with respect to each partner's share of the net profits of the business. The income. The taxable portion for resident, nonresident and corporate partners is
partnership may pay the tax for partners only if it pays for ALL partners subject to determined in this schedule in columns 2 through 5. The taxable non-business
tax. The income tax rate is 1% for residents and corporations and .5% for income is then transferred to Schedule C by showing the amounts applicable to the
nonresidents. individual partners.
This election is available to all partnerships regardless of the residency status of the
partners. The partnership may pay the tax for the partners only if it pays the tax for all Column 1, on page 1 is the final summary transferred from Schedule C, column 7.
partners subject to the tax. The "Tax Payment by Partnership" Schedule, Page 1,
Columns 1 through 7, is to be used to compute the tax to be paid. Do not use this Resident Partners are taxed on their entire distributive share of the net profits of the
schedule if an informational return is filed. [If the partnership elects to pay the tax on partnership, including that arising from business activities outside of Ionia, interest,
half of the partners, then such an election and payment of the tax is deemed to meet dividends, rents, royalties, other income, and gains from the sale or exchange of
the requirements for filing a return as provided in the Ordinance, for each partner who property, either tangible or intangible, regardless of where such property was located.
has no other income subject to City of Ionia Income Tax.] However, an individual
return shall be required from any partner having taxable income other than their Nonresident Partners are taxed on their distributive share of the net profits of the
distributive share of the net profits of the partnership. In such cases, an individual partnerships ordinary business income which is attributable to business activity in
partner should enter their total partnership income form Federal Form 1040 on the Ionia, plus net rentals of tangible property in the City and gains from the sale or
appropriate line of Form I-1040. Credits for exemptions and tax paid are to be shown exchange of tangible property in the City. Nonresidents are not taxed on their share of
on the Form I-1040. net rentals on property located outside the City, gains from the sale or exchange of
tangible property located outside the City, gains from the sale or exchange of
Partnership as a Taxpayer securities or other intangible property, or on interest and dividends.
If the partnership elects to pay the tax for the partners, the individual partners are not When the receipt of interest and other intangible income is directly related to the
required to file a return if such partners have no other income subject to tax. nature of the business, such interest, etc., shall be considered business income taxable
However, an individual return is required from any partner having taxable income to nonresidents, and is to be included in the ordinary business income reported in
other than his distributive share of the net profits of the partnership. (In such Schedule A, line 1.
instances, a partner who is required to file an individual return should refer to the
instructions for such return.) Corporate Partners are taxed on their distributive share of the partnership's ordinary
business income attributable to business activity in Ionia, plus net rentals of tangible
If the partnership elects to pay the tax on behalf of the partners then the partnership property in the City and gains from the sale or exchange of tangible property in the
assumes the status of a taxpayer to the following extent: 1. Timely Payment. City. Corporations are not taxed on: their share of net rentals of property located
Payment must be made within four (4) months from the end of the fiscal year or outside the City.
period. Payments made after the due date are subject to interest and penalty in the
same manner as a delinquent payment from any other taxpayer. 2. Payment of Page 1 instructions
estimated tax. The election of a partnership to pay the tax on behalf of the individual Column 1, Adjusted Partnership Income - Fill out all appropriate schedules on page
partners also carries with it the requirement to file a Declaration of Estimated Income 2 of Form I-1065. Transfer amounts from Schedule C (Distribution to Partners),
Tax (Form I-1040ES). Form I-1045ES must be filed, and quarterly estimated Column 7, to this column. List the amounts in the same order as partners are listed on
payments of the tax must be made, if the estimated tax for the partnership is expected the upper half of page 1.
to exceed $100.00. If the partnership files Form I-1040ES and makes the required
quarterly estimated payments, the partners will not be required to file a Declaration, Column 2, Allowable Individual Deductions - Any non-taxable items included in
unless they have additional income (not subject to Ionia withholding) on which City Column 1 are to be deducted in Column 2. Deductible items will include the dividend
of Ionia income tax is expected to exceed $100.00. The fiscal year for the partnership exclusion, net operating loss carryover, etc., handled in accordance with the Federal
will govern in establishing dates for filing the declaration and paying the estimated Internal Revenue Code. A net capital loss realized by any of the partners, in excess of
tax. the partner's allowable capital loss deduction, must be added back in this column. The
allowable capital loss deduction for each partner is the lesser of (1) the net capital loss;
Instructions for Tax Payment by the Partnership: (2) the amount in Column 1, Page 1, computed without regard to capital gains and
Partnerships electing to become the taxpayer should start preparation of the return on losses; or (3) Three Thousand Dollars ($3,000.00). Non-resident partners must
page 2 with Schedules A and B. If the partnership is subject to allocation of business allocate net operating losses to Ionia at the percentage of business conducted in the
income, Schedule D should be completed next. Schedule C is then completed to City of Ionia in the year in which the loss was sustained. Any net operating or capital
determine each partner's share of business and non-business income. Partnerships losses shall not be carried back to offset prior gains. Such losses may only be carried
with rental real estate must complete Schedule E. Page 1 is to be totally completed. forward in accordance with the Federal Internal Revenue Code. Attach a schedule for
all entries in Column 2.
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