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                                           CITY OF MUSKEGON

                                    FIDUCIARY INCOME TAX RETURN INSTRUCTIONS

GENERAL INFORMATION:                                                       beneficiaries' percentage of distributable income.
Every estate and trust required to file a United States Fiduciary Return   Line 10d. Enter the non-distributable income included in line 9.
(Federal Form 1041) who has Muskegon taxable income, as defined            Line 10e. Subtract line 10d from line 9.
below, must file a City of Muskegon Fiduciary Income Tax Return, Form
M-1041. The Income Tax Ordinance requires that an estate or trust be       Line 10f. Multiply the amount on line 10e by the percentage on line 10c
treated and taxed as a non-resident individual. A tax rate of one-half of  to determine the resident beneficiaries' share of Muskegon distributable
one percent (.005) applies to estates and trusts.                          income.
"Income for estates" means "Income" as defined in Sec. 643 (b) of the      Line 11. Subtract line 10f from line 9 to determine the Muskegon income
Federal Internal Revenue Code, property paid, credited or distributed but  subject to tax.
not in excess of the resident individuals' share of the distributable net  Line 12.  Compute the tax due by multiplying the Muskegon income
income of the estate, decreased by the amount of depreciation or           subject to tax by the tax rate, one-half of one percent (.005).
depletion allowed the resident individual as a deduction under Sec. 642 of
the Federal Internal Revenue Code. The exceptions hereinafter set forth    SCHEDULE D - BUSINESS ALLOCATION FORMULA:
with respect to trusts are also applicable to income from estates.         The Business Allocation Formula is to be used by estates or trusts with
"Income from trusts" means the amount of "Income" as defined in Sec.       business activity both within and outside the City of Muskegon.
643 (b) of the Federal Internal Revenue Code, distributed or required to   Line 1a. Enter in Column 1 the average net book value of all real and
be distributed under Sec. 652 (a) or 662 (a) (1) of the Federal Internal   tangible personal property including inventories owned by the business,
Revenue Code, decreased by the amount of depreciation or depletion         regardless of location; and in Column 2 enter the net book value of the
allowed the resident individual as a deduction by Sec. 642 of the Federal  real and tangible personal property including inventories located in the
Internal Revenue Code.                                                     City of Muskegon. The average net book value of real and tangible
TAXABLE INCOME:                                                            personal property including inventories may be determined by adding the
                                                                           net book values at the beginning of the year and the net book values at
The only types of income taxable to an estate or trust are the following:  the end of the year and dividing the sum thus obtained by two. Any other
1.     Net profit from the operation of a business or enterprise that is   method which will accurately reflect the average net book value for the
       attributable to business activity conducted in Muskegon whether     year will also be permitted.
       or not such business or enterprise is located in Muskegon.          Line 1b. Enter in Column 1 the gross rentals of real property for the tax
2.     Net profit from rental of real and tangible personal property       period multiplied by 8 for all rented real property regardless of location. In
       located in Muskegon.                                                Column 2 enter the gross rentals of real property for the tax period
                                                                           multiplied by 8 for all rented real property located in the City of Muskegon.
3.     Net profit on the sale or exchange of real and tangible personal    Gross rentals refer to real property, rented or leased and should include
       property located in Muskegon.
                                                                           the actual sums of money or other consideration payable,directly or
4.     Income from partnerships.                                           indirectly, by the taxpayer for the use or possession of such real property.
Other income, such as dividends or interest, is not taxable to trusts and  Line 2. Enter in column 1 the total compensation paid to all employees
estates. However, resident beneficiaries must report their distributive    during the tax year and in column 2 enter the amount of compensation
shares of these items on their individual return, Form M-1040.             paid to employees for work done or for services performed within the City
                                                                           of Muskegon during the same period.
INSTRUCTIONS FOR PAGE 1 OF FORM M-1040:                                    Line 3. Enter in Column 1 the total gross receipts from all sales or
Line 1. The total net profit (or loss) is to be computed from page 1 of theservices rendered during the tax year, and in Column 2 enter the amount
Federal U.S. Fiduciary Income Tax Return, Form 1041, by using those        of gross receipts from sales made or services rendered in the City of
lines applicable to any business operation.                                Muskegon during the same period.
Line 2. Enter the City of Muskegon Income Tax deducted as an expense       Line 5.  In determining the average percentage, a factor shall be
on Federal Form 1041.                                                      excluded from the computation only when such factor does not exist
                                                                           anywhere insofar as the taxpayer's business operation is concerned and,
Line 3. Add lines 1 and 2 to determine total allocatable income.
                                                                           in such cases, the sum of the percentage on line 4 shall be divided by the
Line 4. Complete the Business Allocation Formula, Schedule A, Page 2,      number of factors actually used.
Form M-1041, and enter the Business Allocation Percentage computed.
                                                                           RESIDENT BENEFICIARIES' SHARE OF INCOME AND
Line 5. Multiply line 3 by line 4 to determine allocated income.           EXCLUSIONS SCHEDULE B AND SCHEDULE C:
Line 6. Enter net income (loss) from rental of property located in the CityThe information for these schedules is to be taken from the comparable
of Muskegon                                                                columns of Schedule C, Form 1041, U.S. Fiduciary Income Tax Return.
Line 7. Enter the net income (loss) from the sale or exchange of property  Fiduciaries shall report the amounts in Schedule B, column 4 and
located in Muskegon.                                                       Schedule C, Columns 1, 2 and 3 to each resident beneficiary who must
                                                                           report the amounts as income or exclusions on their individual return,
Line 8. Enter any other Muskegon income.                                   form M-1040.
Line 9. Add lines 5, 6, 7 and 8 to determine Muskegon income.              TAX DUE OR REFUND
Line 10. The Muskegon resident beneficiaries' share of distributable net   Tax due must be paid when filing the return. Make check or money order
income (loss) included in line 9 is subtracted. The amount of the          payable to City of Muskegon and mail with the return to the Income Tax
subtraction is calculated on lines 10a through 10f. Muskegon resident      Department, P.O. Box 29, Muskegon, Michigan 49443-0029. Tax due of
beneficiaries are required to report their portion of distributable net    less than one dollar need not be paid.
income on their individual returns. They should receive this information
from the Fiduciary.                                                        DECLARATION OF ESTIMATED TAX
Line 10a. Enter the resident beneficiaries' share of distributable net     Estates and trusts are not required to file a Declaration of Estimated
income.                                                                    Income Tax.
Line 10b. Enter the distributable net income received by the estate or     ASSISTANCE
trust.                                                                     If you have any questions not answered in these instructions, or if you
Line 10c.  Divide line 10a by line 10b to determine the resident           need assistance in preparing your return, call (231) 724-6770 or visit the
                                                                           Income Tax Department in City Hall at 933 Terrace, Muskegon, Michigan.



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                                                CITY OF MUSKEGON
                                                 FIDUCIARY INCOME TAX RETURN
YEAR ________                                                                                                                                         M-1041
FOR CALENDAR YEAR ________ OR OTHER TAXABLE PERIOD BEGINNING ___________________ , _______ AND ENDING _______________ , _______ .
                                                         IDENTIFICATION AND INFORMATION
       NAME OF ESTATE OR TRUST                                                               EMPLOYER IDENTIFICATION NUMBER OF ESTATE OR TRUST
PLEASE
  TYPE NAME, ADDRESS AND TITLE OF FIDUCIARY                                                             FOR AUDIT USE ONLY
  OR
  PRINT

                                                                 INCOME AND TAX COMPUTATION
1.TOTAL BUSINESS INCOME (LOSS) FOR THE PERIOD (FROM FEDERAL FORM 1041)                                                                               $
2.ADD CITY OF MUSKEGON INCOME TAX DEDUCTED FROM INCOME
3.TOTAL ALLOCATABLE INCOME (ADD LINES 1 AND 2)                                                                                                       $
4.BUSINESS ALLOCATION PERCENTAGE (FROM SCHEDULE A, PAGE 2)
5.ALLOCATED INCOME (MULTIPLY LINE 3 BY LINE 4)
6.NET INCOME (LOSS FROM RENTAL PROPERTY LOCATED IN THE CITY OF MUSKEGON (FROM FEDERAL FORM 1041)
7.NET INCOME (LOSS) FROM SALE OR EXCHANGE OF PROPERTY LOCATED IN MUSKEGON (FEDERAL FORM 1041)
8.OTHER CITY OF MUSKEGON INCOME
9.TOTAL CITY OF MUSKEGON INCOME (ADD LINES 5, 6, 7 AND 8)                                                                                            $
10. LESS AMOUNT OF MUSKEGON INCOME APPLICABLE TO BENEFICIARIES WHO ARE RESIDENTS OF MUSKEGON
  COMPUTE THE AMOUNT ON LINE 10 AS FOLLOWS:
  a.ENTER RESIDENT BENEFICIARIES' SHARE OF DISTRIBUTABLE NET INCOME RECEIVED BY THE ESTATE OR TRUST (FROM SCHEDULE B, PAGE 2)$
  b.ENTER TOTAL DISTRIBUTABLE NET INCOME RECEIVED                                                                            $
  c.DIVIDE LINE 10a BY LINE 10b AND ENTER THE PERCENTAGE                                                                                            %
  d.ENTER THE NON-DISTRIBUTABLE INCOME INCLUDED IN LINE 9                                                                    $
  e.SUBTRACT LINE 10d FROM LINE 9                                                                                            $
  f.MULTIPLY LINE 10e BY THE PERCENTAGE ON LINE 10c (RESIDENTS' SHARE MUSKEGON DISTRIBUTABLE INCOME)                         $
11. AMOUNT SUBJECT TO TAX (LINE 9 LESS LINE 10f)                                                                                                     $
12. AMOUNT OF TAX DUE (MULTIPLY LINE 11 BY ONE-HALF OF 1%) (.005)                                                                                    $

                                                                 PAYMENTS AND CREDITS
13. a. TAX PAID WITH TENTATIVE RETURN                                                                                                                $
  b. PAYMENTS ON DECLARATION OF ESTIMATED MUSKEGON INCOME TAX                                                                                        $
14. TOTAL (ADD LINES 13a, AND b)                                                                                                                     $

                                                                 TAX DUE OR REFUND
15. IF THE TAX (LINE 12) IS LARGER THAN THE PAYMENTS (LINE 14), ENTER BALANCE DUE. MAKE REMITTANCE PAYABLE TO: CITY OF MUSKEGON. MAIL TO: INCOME TAX $
  DEPARTMENT, P.O. BOX 29, MUSKEGON, MICHIGAN 49443-0029
16. IF THE PAYMENTS (LINE 14) ARE LARGER THAN THE TAX DUE (LINE 12), ENTER OVERPAYMENT TO BE REFUNDED                                                $

                                                MAKE CHECK PAYABLE TO: CITY OF MUSKEGON
           MAIL TO: INCOME TAX DEPARTMENT, P.O. BOX 29, MUSKEGON, MICHIGAN 49443-0029

       I DECLARE THAT I HAVE EXAMINED THIS RETURN (INCLUDING ACCOMPANYING SCHEDULES) AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, IT IS TRUE, CORRECT AND COM-
       PLETE. IF PREPARED BY A PERSON OTHER THAN THE TAXPAYER, THIS DECLARATION IS BASED ON ALL INFORMATION OF WHICH THE PREPARER HAS ANY KNOWLEDGE.
       � I AUTHORIZE THE INCOME TAX DEPARTMENT TO DISCUSS THIS RETURN AND ATTACHMENTS WITH THE PREPARER.
  SIGN DATE                     FIDUCIARY SIGNATURE OR OFFICER REPRESENTING FIDUCIARY        TITLE                            PHONE
  HERE
       DATE                     INDIVIDUAL OR FIRM SIGNATURE OF PREPARER OTHER THAN FIDUCIARYADDRESS                          PHONE

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                                     SCHEDULE A - BUSINESS ALLOCATION FORMULA
                                                                                             COLUMN 1                   COLUMN 2              COLUMN 3
                                                                                             LOCATED EVERY-             LOCATED IN            PERCENTAGE
                                                                                                              WHERE     MUSKEGON            (COLUMN 2 DIVIDED BY
                                                                                                                                              COLUMN 1)
1.  a. AVERAGE NET BOOK VALUE OF REAL AND TANGIBLE PERSONAL PROPERTY                         $$
    b. GROSS ANNUAL RENT PAID FOR REAL PROPERTY ONLY, MULTIPLIED BY 8
    c. TOTALS (ADD LINES 1a AND b)                                                                                                                              %
2.  TOTAL WAGES, SALARIES, COMMISSIONS AND OTHER COMPENSATION OF ALL EMPLOYEES                                                                                  %
3.  GROSS RECEIPTS FROM SALES MADE OR SERVICES RENDERED                                                                                                         %
4.  TOTAL PERCENTAGES - ADD THE THREE PERCENTAGES COMPUTED IN COLUMN 3, LINES 1c, 2 AND 3 (A PERCENTAGE MUST BE COMPUTED FOR EACH LINE)                         %
5.  BUSINESS ALLOCATION PERCENTAGE (ONE-THIRD OF LINE 4) ENTER HERE AND ON PAGE 1, LINE 8                                                                       %
NOTE: IN DETERMINING THE AVERAGE PERCENTAGE (LINE 5), IF A FACTOR DOES NOT EXIST, THE SUM OF THE PERCENTAGES SHALL BE DIVIDED BY THE NUMBER OF FACTORS ACTUALLY USED.
IN THE CASE OF A TAXPAYER AUTHORIZED BY THE INCOME TAX ADMINISTRATOR TO USE ONE OF THE SPECIAL FORMULAE, ATTACH AN EXPLANATION AND USE THE LINES PROVIDED BELOW:
a. NUMERATOR                                                                  c. PERCENTAGE (a. DIVIDED b.) ENTER HERE AND ON PAGE 1, LINE 8
b. DENOMINATOR                                                                d. DATE OF ADMINISTRATOR'S APPROVAL LETTER

                                                        SCHEDULE B - RESIDENT BENEFICIARIES
  1.NAME OF EACH RESIDENT BENEFICIARY                       2.ADDRESS OF RESIDENT BENEFICIARY                   3. SOCIAL SECURITY NUMBER   4.SHARE OF
                                                                                                                                              DISTRIBUTABLE INCOME
a.

b.

c.

d.

e.

5. RESIDENT BENEFICIARIES TOTAL DISTRIBUTABLE INCOME (ENTER HERE AND ON LINE 10a)

                                  SCHEDULE C - RESIDENT BENEFICIARIES' SHARE OF EXCLUSIONS
  1.EXCLUSION FOR CAPITAL GAINS AND LOSSES FOR THE        2.EXCLUSION FOR INTEREST FROM GOVERNMENT OBLI-        3. MISCELLANEOUS INCOME EXCLUSIONS ATTACH
    PERIOD PRIOR TO JULY 1, 1993. (ENTER ON LINE 5, COL-    GATIONS. (ENTER ON LINE 2, COLUMN II, FORM M-1040)     EXPLANATION AND SUPPORT. (ENTER ON LINE 14,
    UMN II, FORM M-1040)                                                                                           COLUMN II, FORM M-1040)
a.                                                      a.                                                    a.
b.                                                      b.                                                    b.
c.                                                      c.                                                    c.
d.                                                      d.                                                    d.
e.                                                      e.                                                    e.
                        NOTE: FIDUCIARY SHALL REPORT AMOUNTS IN COLUMNS 1, 2 AND 3 TO EACH RESIDENT BENEFICIARY

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