INSTRUCTIONS FOR FILING PARTNERSHIP INCOME TAX RETURN, FORM L-1065 
 
PARTNERSHIPS REQUIRED TO FILE A RETURN                                     Column 1, on page 1, is the final summary transferred from Schedule 
Every partnership that conducted business activity in the City of          C, column 7. 
Lapeer, whether or not an office or place of business was maintained       RESIDENT PARTNERS   are taxed on their entire distributive share of 
in the city, is required to file an annual  return. Syndicates, joint      the net profits of the partnership, including that arising from business 
ventures, pools and like organizations will also use Form L-1065.          activities outside of Lapeer, interest, dividends, rents, royalties, other 
FILING DATE                                                                income, and gains from the sale or exchange of property, either 
Calendar year taxpayers must file by April 30 following the end of the     tangible or intangible, regardless of where such property was located. 
tax year. Fiscal year taxpayers must file within four (4) months after the NONRESIDENT PARTNERS are taxed on their distributive share of 
end of their fiscal year.                                                  the partnership’s ordinary business  income which is attributable to 
                                                                           business activity in Lapeer, plus net rentals of tangible property in the 
OPTION TO PAY TAX AND APPLICABLE TAX RATES                                 City and gains from the sale or exchange of tangible property in the 
The partnership may elect to file an information return or to compute      City. 
and pay the tax due  with respect to each partner's share of the net       Nonresidents are not taxed on their share of net rentals on property 
profits of the business. The partnership may pay the tax for partners      located outside the City, gains from the sale or exchange of tangible 
only if it pays for ALL partners  subject to tax.  Effective 1/1/67, the   property located outside the City, gains from the sale or exchange of 
income tax rate is 1.0% for corporations, 1.0% for residents and           securities or other intangible property, or on interest and dividends. 
0.5% for nonresidents.                                                     When the receipt of interest and other intangible income is directly 
REMITTANCE                                                                 related to the nature of the business, such interest, etc., shall be 
Partnerships electing to pay the tax for all partners must remit the tax   considered business income taxable  to nonresidents, and is to be 
when filing the return. Make check or money order payable to:              included in the ordinary business income reported in Schedule A line 1. 
LAPEER CITY TREASURER.                                                     CORPORATION PARTNERS are taxed on their distributive share of 
                                                                           the partnership’s ordinary business  income attributable to business 
                                                                           activity in Lapeer, plus net rentals of tangible property in the City and 
MAILING ADDRESS                                                            gains from the sale or exchange of tangible  property in the City. 
         LAPEER INCOME TAX DEPARTMENT                                      Corporations are not taxed on: their share of net rentals of property 
         576 LIBERTY PARK                                                  located outside the City; or gains from the sale or exchange of tangible 
         LAPEER MICHIGAN  48446-2189                                       property located outside the City. 
                                                                           PAGE 1 INSTRUCTIONS 
PARTNERSHIP AS TAXPAYER                                                    Column 1. The amounts to be inserted in column 1, page 1, are 
If the partnership elects to pay the tax for the partners, the individual  transferred from Schedule C on page 2 of the return. If this return is an 
partners are not required to file a return if such partners have no other  information return, the  remaining columns, 2 through 7, on page 1 
income subject to tax. However, an individual return is required from      need not be completed. However, if the partnership elects to pay the 
any partner having taxable income other than his distributive share of     tax, columns 2 through 7 must be completed. 
the net profits of the partnership. (In such instances, a partner who is   Column 2. Allowable individual partner deductions which relate to the 
required to file an individual return should refer to the instructions for partnership are  deducted in column 2. These  deductions include net 
such return.)                                                              operating loss carryover. This column is also used to adjust for a net 
Partnerships electing to pay the tax on behalf of the partners assume      capital loss realized by any of the partners, in excess of the partner's 
the status of a taxpayer to the following extent: (1) timely payment       maximum allowable ($3,000) capital loss deduction. Therefore, a net 
must be made; and (2) a Declaration of Estimated Income Tax, Form          capital loss realized by any of the partners, in excess of the partner's 
L-1040ES, is required if the total estimated tax for the partnership is    allowable capital loss deduction must be added back in column 2, page 
expected to exceed $100. The calendar  or  fiscal year of  the             1. The allowable capital loss deduction for each partner is the lesser of 
partnership  will govern in establishing the  dates for filing the         (1) the net capital loss, (2) the amount in column 1, page 1, computed 
declaration and paying the estimated tax.                                  without regard to capital gains and losses, or (3) $3,000. 
Partnerships electing to become the taxpayer should start preparation      Capital gains and losses, and net operating loss carryovers are to be 
of the return on page 2 with Schedules A and B. If the partnership is      handled in the  same manner  as provided in  the federal Internal 
subject to allocation of business income, Schedule D should be             Revenue Code. Nonresident partners must allocate net operating 
completed next.                                                            losses to Lapeer at the percentage of business conducted in Lapeer in 
Schedule C is then completed to determine each partner’s share of          the  year in  which the loss  was sustained. ATTACH A SCHEDULE 
business and non-business income. A partnership with  rental real          DETAILING COMPUTATION OF AMOUNTS REPORTED IN 
estate must include a listing of the rental properties.  Page 1 is to be   COLUMN 2. 
totally completed.                                                         Column 3. A $600 exemption is allowed for each partner who is an 
                                                                           individual,  the partner’s spouse and dependents. Additional 
PARTNERSHIP FILING AN INFORMATION RETURN                                   exemptions are allowed if the taxpayer or spouse is 65 years of age or 
Partnerships filing information returns are required to complete: Page     older, or is blind. 
2: Schedules A, B, C and if appropriate Schedule D; a listing of rental    In general, the same rules apply in determining dependents as under 
properties if rental income is  included on the return; and page 1:        the federal Internal Revenue Code. A spouse may be taken as an 
Identification and Information section and column 1.                       exemption on the partnership return only if such spouse has no income 
The Partnership Return, Form L-1065, is designed to distinguish            subject to Lapeer Income  Tax.  Exemptions for a partner  whose 
between that income taxed to residents, nonresidents and                   residence status has changed from a resident to a nonresident or from 
corporations. The purpose of the return is to set forth the entire net     a nonresident to a resident of Lapeer during the taxable year are first 
profit for the period covered and to show the distributive share of each   applied against  income while a resident, with the balance, if  any, 
partner, indicating those who are residents of Lapeer, nonresidents or     applied to Lapeer income while a nonresident. A partner’s personal 
corporations. (If residency changes  during the taxable period for  any    and dependency exemptions may not be claimed on more than  one 
partner, use two lines to  indicate allocation of  income by residency     partnership return. 
status in all schedules where applicable.)                                 Exemptions are not allowed to other persons  who are partners 
Ordinary business income of the partnership is reported in Schedule A.     (i.e., corporations who are partners, partnerships who are partners, 
This ordinary business income is transferred to Schedule C, column 1,      etc.). 
by showing the amount of ordinary income distributable to each             Column 7. In column 7 enter payments made by the partnership: tax 
partner.                                                                   paid  with a tentative return; payments on a  2006 Declaration of 
Non-business income that may be taxable is reported in Schedule B,         Estimated Income Tax; or any credits for income taxes paid to any 
by type of income. The taxable portion for resident, nonresident and       other municipality by the partnership on behalf of Lapeer resident 
corporate partners is determined in this schedule in columns 2 through     partners, if the income on which such tax was levied is included in this 
5. The taxable non-business income is then transferred to Schedule C       return.  DO  NOT take credit for income taxes paid to any  other 
by showing the amounts applicable to the individual partners.              municipality on behalf of nonresident partners. The credit for tax paid 
                                                                           to another city shall be the lesser of: (1) The income tax paid the other 

municipality  for Lapeer resident partners, or (2) 0.5%  of  an  amount    The nonresident excludable portion also includes that portion of  the 
obtained by deducting the amount for exemptions claimed for Lapeer         gain (or loss) which arose from the sale or exchange of intangible 
resident partners on page 1, column 3, of this return from the gross       assets, and of tangible property located outside Lapeer. The taxable 
amount of income of Lapeer resident partners subject to tax by such        nonresident partners’ portion in  column 5 will be the gain (or loss) 
other city.                                                                attributable to the period  after January 1, 1967, from the sale or 
All credits in column 7 are to be distributed on lines 8a, b and c, and    exchange of tangible real and personal property located in Lapeer. 
totaled on line 9. The total on line 9 must agree with the total of column RENTS AND ROYALTIES. Report in column 1, lines 6, 7 and 8, the 
7.                                                                         total net income or loss from all rents and royalties. The resident 
COMPUTATION AND PAYMENT OF TAX                                             partners’ portion of rents and royalties is taxable. Nonresident  and 
Line 10. If tax due (line 7) is greater than the total tax payments (line  corporate partners exclude net income or loss from rents, and royalties 
9) subtract line 9 from line 7 and enter tax due. Tax due must be paid     attributable to property located OUTSIDE Lapeer. 
when filing the return.                                                    OTHER INCOME. Report in column 1, line 9,  all other partnership 
To pay  with check or money order make the check or money  order           income. 
payable to the LAPEER CITY TREASURER and mail the payment with             TOTAL NON-BUSINESS INCOME. Enter on line 10 the totals for each 
the return to:  Lapeer Income Tax Department                               column in Schedule B. After transferring the amounts from columns 3 
                576 Liberty Park                                           and 5 of Schedule B to Schedule C, the total of Schedule C, column 
                Lapeer MI 48446-2189                                       6a, (taxable resident partners’ non-business income) must equal the 
                                                                           total of Schedule B, column 3, and the total of Schedule C, column 6b, 
OVERPAYMENT OF TAX                                                         (taxable nonresident partners’ non-business income) must equal the 
Line 11. If the total tax payments (line 9) is greater than tax due (line  total of Schedule B, column 5 . 
7) subtract line 7 from line 9 and enter the tax overpayment.              SCHEDULE C - DISTRIBUTION TO PARTNERS 
Line 12. Enter  all or the portion of the overpayment to be credited       The totals of columns 1, 6a and 6b of Schedule C, showing the 
forward.                                                                   distribution to individual partners of ordinary and non-business income, 
Line 13. Enter the amount of  your overpayment to be refunded. A           must agree  with the totals transferred from Schedules A and B. 
refund will be issued via a paper refund check unless you choose to        Column 1. Enter in column 1 the individual partner's share of business 
get the refund via direct deposit by entering the (a) bank routing         income from Schedule A, line 5. If Sec. 179 depreciation is included in 
number, (b) the bank account number and (c) the account type.              Schedule A and the partners have unequal credits for such additional 
PREPARER AUTHORIZATION                                                     depreciation (e.g., if one partner is single and  one is married filing 
Line 16. If the “Yes” box is marked, the partnership is authorizing the    jointly for federal income tax purposes), the apportionment of income 
Lapeer Income  Tax  Department to call the preparer  to answer any         to partners in this column will require a special computation. 
questions that  may arise during the  processing of its return. The        Column 7. Transfer the amount of each individual partner's share 
partnership is also authorizing the preparer: to  give the Department      shown in column 7, Schedule C to column 1, page 1 of the return. 
any information that is missing from the return; to call the Department    SCHEDULE      D -               BUSINESS             ALLOCATION
for information about the processing of the return or the status of any    PERCENTAGE 
related refund or payments; and to respond to certain notices that the     The business allocation percentage is to be applied to the distributive 
partnership has  shared  with the  preparer about  math errors, offsets    share of business  income of  CORPORATE AND NONRESIDENT 
and return preparation.                                                    partners if business activity of the partnership is conducted both within 
PAGE 2 INSTRUCTIONS                                                        and outside the City of Lapeer. 
                                                                           Line 1a. Enter in column 1 the average net book value of all real and 
SCHEDULE A - ALLOCABLE BUSINESS INCOME                                     tangible personal property owned by the business, regardless of 
Schedule A is used to report ordinary business income of the               location; and in  column 2 show  the net book value of the real and 
partnership.  Ordinary business income of Schedule A is transferred to     tangible personal property owned and located or used in the City of 
Schedule C, column 1. Schedule C is used to determine the amount of        Lapeer. The average net book value of real and tangible personal 
ordinary business income subject to the Lapeer tax.                        property may be determined  by adding the net book values at the 
Non-business income is reported in Schedule B. The taxable portion of      beginning and end of the year and dividing the sum thus obtained by 
non-business income is transferred to Schedule C.                          two. 
Instructions for Schedules B and C indicate how amounts transferred        Line 1b. Enter in column 1 the gross annual rent multiplied by 8 for all 
from Schedules A and B are allocated to the individual partners.           rented real property regardless of location. In column 2 show the gross 
SCHEDULE B - NON-BUSINESS INCOME AND                                       annual rent multiplied by 8 for rented real property located in the City of 
EXCLUSIONS                                                                 Lapeer. Gross annual rent refers to real property only, rented or leased 
Schedule B is used to allocate the total non-business income of the        during the taxable period, and should include the actual sums of 
partnership between resident partners and nonresident partners. After      money  or other consideration payable, directly  or indirectly, by the 
determining the total taxable income for resident and nonresident          taxpayer for the use or possession of such property. 
partners, the totals are transferred to Schedule C, wherein an analysis    Line 2. Enter in column 1 the total compensation paid to all employees 
is made to determine the amount of non-business income distributable       during the  year  and in column 2 show the amount of compensation 
to each individual partner. Therefore, compute  the total amount of        paid to employees for  work or services performed  within the City of 
distributable non-business income, by type of income, and enter these      Lapeer. 
amounts on the proper lines of Schedule B, column 1. For each              Line 3. Enter in column 1 the total gross revenue from all sales or 
category  of non-business income, use columns 2 and 3 to show  the         services rendered during the year, and in column 2 show the amount 
resident partners’ excludable and taxable portion, and use columns 4       of revenue derived from sales made or services rendered in the City of 
and 5 to show the nonresident  partners’ excludable and taxable            Lapeer during the year. If there is no regularly maintained sales force 
portion. The total of columns 2 through  5 must equal the total of         outside the City, this allocation factor must be  100% for businesses 
column 1.                                                                  with no other business activity outside the City. 
INTEREST AND  DIVIDENDS. In column 1, line 1, report total                 ASSISTANCE AND WEBSITE 
partnership  non-business interest income. In column 1, line 2, report     If  you have questions or need assistance, call (810) 667-7155. 
total partnership income from dividends. The interest and dividends        Questions by  mail should be directed to: Lapeer Income  Tax 
reported on lines 1 and 2, column 1, are to be apportioned between         Department, 576 Liberty Park, Lapeer, Michigan 48446-2189. Income 
resident partners (columns 2 and 3) and  nonresident partners              tax forms, instructions and additional information are available on 
(columns 4 and 5).  Resident partners exclude in column 2 the  total       City’s website, http://www.ci.lapeer.mi.us/web/tax.htm . 
nontaxable interest from obligations of the United States, the states or   NOTICE 
subordinate units of government of the states.  Interest and dividend      These instructions are interpretations of the Lapeer Income  Tax 
income is not taxable to nonresidents.                                     Ordinance. The Ordinance  will prevail in any disagreement between 
SALE OR EXCHANGE OF PROPERTY. Report in column 1, lines 3, 4               the instructions and the Ordinance. 
and 5, the total taxable net gain or loss from sales and exchanges of       
property, short-term, long-term and Section 1231, respectively. Gains       
or losses on the sale of obligations of the United States or attributable 
to the period prior t o January 1, 1967, are excluded.