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Instructions for Form 4898
Corporate Income Tax: Non-Unitary Relationships with Flow-Through Entities
between corporations. This act DID NOT create a
Purpose
corresponding “affiliated group” test for finding a unitary
The purpose of this form is to gather information on the relationship between a corporation and an FTE. The existence
distributive share of flow-through income (loss) attributable of a unitary relationship between a corporation and an FTE is
to flow-through entities (FTEs) that are directly or indirectly still based exclusively on the traditional two-part test described
owned but not unitary for apportionment purposes with the above.
taxpayer, or with the member of a Unitary Business Group
NOTE: An FTE owned directly or indirectly by a taxpayer or
(UBG).
a member of a UBG may or may not be unitary with ataxpayer
General Information or UBG member. This form asks for information only about the
FTEs that are NOT unitary for apportionment purposes with
This form is intended to only be used by a Corporate Income the taxpayer or UBG member. For those FTEs that are unitary
Tax (CIT) taxpayer (or member of a UBG) to report the for apportionment purposes with the taxpayer, use the CIT
distributive income (loss) from its interests in FTEs that are not Unitary Relationships with FTEs (Form 4900).
unitary for apportionment purposes with the taxpayer or UBG.
This form must be filed by any taxpayer that has a distributive Line-by-Line Instructions
share of income (loss) attributable to an FTE with which the
taxpayer is not unitary for apportionment purposes. If the Lines
not listed are explained on the form.
taxpayer is a UBG, then each member of the UBG that has a Taxpayer Name and Account Number: Enter taxpayer name
distributive share of income (loss) from an FTE that the UBG and account number as reported on page 1 of the CIT Annual
is not unitary with for apportionment purposes must file this Return (Form 4891).
form. If more space is needed, use additional copies of Form
4898. Repeat the taxpayer’s and UBG member’s name and Unitary Business Groups (UBGs):
Complete one form for
Federal Employer Identification Number (FEIN) (if applicable) each
member included in the standard return that received a
at the top of every copy of Form 4898. distributive
share of income (loss) from an FTE not unitary for
apportionment purposes with the UBG. Enter the Designated
Flow-through entity means an entity that for the applicable Member’s (DM’s) name and FEIN in the Taxpayer Name and
tax year is treated as a subchapter S Corporation under FEIN fields and the name and FEIN of the member to which
section 1362(a) of the Internal Revenue Code (IRC), a general the schedule applies on the line below.
partnership, a trust, a limited partnership, a limited liability
partnership, or a limited liability company, that for the tax Column A and B:
Identify each non-unitary FTE by name and
year is not taxed as a C Corporation for federal income tax FEIN.
purposes. Column C: To the extent included in federal taxable income
and the corporate income tax base before apportionment, enter
A taxpayer is unitary for apportionment purposes with an FTE
the distributive share of income (loss) attributable to the non-
if the taxpayer:
unitary FTE listed inColumns A and B. Enter loss negative. as
• Owns or controls, directly or indirectly, more than 50% A UBG member will enter the amount of distributive income
of the ownership interests with voting rights (or ownership (loss) from each non-unitary FTE listed inColumns A and B.
interests that confer comparable rights to voting rights) of the For each UBG member, the sum of all distributive shares of
FTE; AND flow-through income (loss) entered in Column C shall equal
• The taxpayer and FTE have activities or operations which the sum all of distributive shares flow-through of income (loss)
result in a flow of value between the taxpayer and the FTE, or entered on line 32 the of CIT Data on Unitary Business Group
between the FTE and another FTE unitary with the taxpayer, Members (Form 4897).
or has business activities or operations that are integrated with, To compute the amount required be to reported Column in C,
are dependant upon, or contribute to each other. for each FTE listed inColumns A and B:
The determination of whether a taxpayer is unitary for • Begin with the amount distributive of share income of (loss)
apportionment purposes with an FTE is made at the taxpayer included federal in taxable income.
level. If the taxpayer at issue is a UBG, the ownership
requirement will be made at the UBG level. So, if the combined Adjust
• that amount by amounts attributable to the FTE
ownership of the FTE by the UBG is greater than 50%, then that
are included on the following lines of Form 4891: 12, 13,
the ownership requirement will be satisfied. 14c,18,
19, 20, 21, 22, 23, 27, 28, 29, and 30.
• Report the result Column in C.
An FTE is not unitary with a taxpayer when either of the tests
above is not met. Exclusion of MBT Filer Distributive Shares
Public Act 233 of 2013 provides that, in the case of an FTE
Public Act (PA) 266 of 2013
that made the election to remain taxable under the MBT,
PA 266 of 2013 authorizes an affiliated group election that each member of the FTE that does not file as a member of a
applies an alternate test for finding a unitary relationship
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