Fillable MI-1045 609063 7 2017 Application for Michigan Net Operating Loss Refund MI-1045

Fill Online, Printable, Fillable, Blank MI-1045 609063 7 2017 Application for Michigan Net Operating Loss Refund MI-1045 Form

Use Fill to complete blank online MICHIGAN pdf forms for free. Once completed you can sign your fillable form or send for signing. All forms are printable and downloadable.

MI-1045 609063 7 2017 Application for Michigan Net Operating Loss Refund MI-1045

On average this form takes 52 minutes to complete

The MI-1045 609063 7 2017 Application for Michigan Net Operating Loss Refund MI-1045 form is 3 pages long and contains:

  • 0 signatures
  • 2 check-boxes
  • 209 other fields

Country of origin: US
File type: PDF

BROWSE MICHIGAN FORMS

Related forms
Fill has a huge library of thousands of forms all set up to be filled in easily and signed.
Fill in your chosen form
Sign the form using our drawing tool
Send to someone else to fill in and sign.
find another form
 
Michigan Department of Treasury (Rev. 06-17), Page 1 of 3
Application for Michigan Net Operating Loss Refund MI-1045
Issued under authority of Public Act 281 of 1967, as amended. Type or print in blue or black ink.
Year (YYYY) Month-Year (MM-YYYY) Month-Year (MM-YYYY)
For loss year or for loss year beginning
and ending
Filer’s First Name M.I. Last Name
Filer’s Full Social Security No. (Example: 123-45-6789)
If a Joint Return, Spouse’s First Name M.I. Last Name
Spouse’s Full Social Security No. (Example: 123-45-6789)
Home Address (Number, Street, or P.O. Box)
City or Town State ZIP Code
Check the box to forgo the entire carryback period for the NOL. When you check the box, you are electing to carry the NOL
forward instead of carrying it back to previous years. Once the election is made, it is irrevocable.
IMPORTANT: Use your U.S. Form 1040 to complete this form. Do not consider net operating losses from other years. Do not include
income and losses sourced to other states; income and losses from oil and gas production and nonferrous metallic minerals extraction
that are subject to Michigan severance tax and the related production expenses; or a federal net operating loss deduction (NOLD).
PART 1: COMPUTE THE NET OPERATING LOSS (NOL)
1. Wages, salaries, tips, etc. ...................................................................................................................... 1. 00
2. Interest income ...................................................................................................................................... 2. 00
3. Dividends. .............................................................................................................................................. 3. 00
4. Business income or loss (include U.S. Schedules C and F) ................................................................. 4. 00
5. Capital gain or loss (include U.S. Schedule D)...................................................................................... 5. 00
6. Other gains or losses (include U.S. Form 4797)
................................................................................... 6. 00
7. Pension, IRA, and annuities included in Adjusted Gross Income (AGI) ................................................ 7. 00
8. Net rent or royalty income ..................................................................................................................... 8. 00
9. Income or losses from partnerships, estates, trusts and S corporations (include U.S. Schedule E) ...... 9. 00
10.
Other (e.g., all state and local refunds, alimony, taxable Social Security, unemployment
compensation) Describe:____________________________________________________________ 10. 00
11. Total Michigan Gross Income. Add lines 1 through 10. ......................................................................... 11. 00
12. ADJUSTMENTS: Only list adjustments to Michigan-sourced income
a. Payments to a retirement plan as an individual or self-employed person 12a. 00
b. Deduction for self-employment tax and self-employed health insurance 12b. 00
12d. 00
e. Domestic production activities deduction (DPAD) sourced to Michigan
Other adjustments to income including health savings account deduction 12f.
c. Educator expenses and/or moving expenses
.......................................... 12c. 00
d. Alimony paid and/or penalty for early withdrawal of savings ...................
.. 12e. 00
f. 00
13. Total adjustments. Add lines 12a through 12f
....................................................................................... 13. 00
14. Michigan AGI. Subtract line 13 from line 11. If greater than zero, you do not have an NOL. ................ 14. 00
15. Nonbusiness deductions: Add lines 12a, 12d and 12f ................................. 15. 00
16.
Nonbusiness income included in line 1
1
a. Interest income .............................................
16a. 00
b. Dividend income ...........................................
16b. 00
c. Net nonbusiness capital gains
(before any allowable exclusion) ..................
16c. 00
d. Pension, IRA, and annuities .........................
16d. 00
e. Alimony received ..........................................
16e. 00
f. Other income .................................................
16f. 00
17.
Total nonbusiness income. Add lines 16a through 16f ................................
17.
00
18.
Excess of nonbusiness deductions over nonbusiness income, subtract
line 17 from line 15. If less than zero, enter “0” ............................................
18. 00
19. Excess capital loss deduction (enter as a positive number. See instr.) ........ 19.
00
20.
DPAD sourced to Michigan (enter as a positive number) .............................
20.
00
21.
Add lines 18, 19 and 20 .........................................................................................................................
21. 00
22.
Net operating loss. Combine lines 14 and 21. If greater than zero, STOP; you do not have an NOL ..
22. 00
+ 0000 2017 73 01 27 2 Continue on page 2. This form cannot be processed as a carryback if page 2 is not completed and included.
Reset Form
2017 MI-1045, Page 2 of 3
Filer’s Full Social Security Number
PART 2: COMPUTE A REFUND FROM AN NOL CARRYBACK
Step 1: Redetermine Michigan Income Tax
A B C
23. Year to which NOL is being carried back .......................................
00
Additions from MI-1040, Schedule 1 ............................................. 00 00 00
26. Balance. Add lines 24 and 25 ........................................................ 00
24. Reported federal AGI for the year indicated on line 23 ................. 00 00
25.
00 00
27. Subtractions from MI-1040, Schedule 1 ........................................ 00 00 00
28. Balance. Subtract line 27 from line 26 ........................................... 00 00 00
29. Enter Net Operating Loss from line 22 .......................................... 00 00 00
30. Balance. Subtract line 29 from line 28 ........................................... 00 00 00
31. Michigan exemption allowance...................................................... 00 00 00
32. Taxable balance. Subtract line 31 from line 30
............................. 00 00 00
ax. Multiply line 32 by tax rate of carryback year.
If less than zero, enter “0”.............................................................. 00 00 00
34. Nonrefundable tax credits.............................................................. 00 00 00
35. Tax due. Subtract line 34 from line 33. If less than zero, enter “0” 00 00 00
36. a. Refundable tax credits ............................................................... 00 00 00
ax withheld ............................................................................... 00 00 00
c. Tax paid with prior returns ..........................................................
33.
T
b. T
00 00 00
d. Estimated tax payments ............................................................ 00 00 00
37. Total of items 36a through 36d ...................................................... 00 00 00
38. Tax previously refunded or carried to next year............................. 00
39.
00 00
Balance of tax paid. Subtract line 38 from line 37
......................... 00 00 00
40. Overpayment. Subtract line 35 from line 39 ................................. 00 00 00
Step 2: Compute the NOL deduction for subsequent carryback year(s). Enter all numbers as positive numbers.
41. Enter the NOL balance from line 30 .............................................
00 00
00
42. Excess Capital Loss deduction included on line 28....................... 00 00 00
43. DPAD included on line 28 ....................................................... 00 00 00
44.
NOL carryforward. Subtract line 42 and 43 from line 41.
Enter line 44 on line 29 of subsequent year .................................. 00 00 00
PART 3: COMPUTE THE NOL CARRYFORWARD. Enter all numbers as positive numbers.
45. Year to which you are applying NOL ......................................................................................................
46. Prior year NOL carryforward(s) .............................................................................................................. 00
47. NOLD. Amount of NOL absorbed in year on line 45 ............................................................................... 00
48. Subtract line 47 from line 46. If less than zero, enter “0”, no carryforward remains. .............................. 00
49. Excess Capital Loss deduction attributable to Michigan claimed in the year on line 45 ........................
DPAD attributable to Michigan claimed in the year on line 45 ................................................................
00
50. 00
51.
Subtract line 49 and 50 from line 48. This is the NOL carryforward available for the subsequent tax year ...
00
Taxpayer Certication. I declare under penalty of perjury that the information in this
Preparer Certication. I declare under penalty of perjury that this
return and attachments is true and complete to the best of my knowledge.
return is based on all information of which I have any knowledge.
Filer’s Signature Date Preparer’s PTIN, FEIN or SSN
Spouse’s Signature Date Preparer’s Name (print or type)
Preparer’s Business Name, Address and Telephone Number
By checking this box, I authorize Treasury to discuss my return with my preparer.
Mail your completed form to:
M
ichigan Department of Treasury,
Lansing, MI 48956
+ 0000 2017 73 02 27 0
2017 MI-1045, Page 3 of 3
Filer’s Full Social Security Number
Computation of Federal Modied Taxable Income (FMTI) for Household Income Only
The purpose of Part 4 is to compute the allowable NOLD when determining eligibility for a Farmland Preservation Tax Credit. An NOLD
allowed in household income cannot exceed Federal Modied Taxable Income (FMTI).
PART 4: ADJUST THE NOL FOR HOUSEHOLD INCOME
Step 1: Compute the FMTI
A B C
52. Year to which NOL is being carried ...............................................
..............
53. Reported AGI for year shown on line 52 without current NOLD .... 00 00 00
54. a. Adjustments to AGI including DPAD (see instructions) 00 00 00
b. Capital losses, in excess of capital gains ($3,000 maximum)
... 00 00 00
55. MODIFIED federal AGI. Add lines 53, 54a and 54b ...................... 00 00 00
56. a. Medical (see instructions for limitations).................................... 00 00 00
b. Taxes
......................................................................................... 00 00 00
c. Contributions.............................................................................. 00 00 00
d. Interest....................................................................................... 00 00 00
e. Casualty loss
............................................................................. 00 00 00
f. Moving expenses....................................................................... 00 00 00
g. Miscellaneous (include U.S. Schedule A; see instructions)
....... 00 00 00
h. Limit on itemized deductions ..................................................... 00 00 00
i. If you did not itemize, use the standard deduction .................... 00 00
56i
00
57. Enter the total of 56a through 56h, or if you did not itemize .... 00 00 00
58. FMTI. Subtract line 57 from line 55. If less than zero, enter “0” .... 00 00 00
Step 2: Compute the Carryback (If you are not carrying the loss back, go to Step 3)
59.
Unabsorbed NOL. Enter your federal NOL as a positive amount
in column A .................................................................................... 00 00 00
60.
NOL to be carried to next succeeding year.
Subtract line 58 from line 59. Carry the amount on this line to
the next column, line 59. If less than zero, enter “0”...................... 00 00 00
Step 3: Compute the Carryforward
61. Year the federal NOL occurred ......................................................
62. Enter the amount of the original federal NOL as a positive amount
................................... 00 00
00 00 00
63. Total of all NOLDs used for previous years 00
64.
Subtract line 63 from line 62. This is the remaining NOL that can
be carried forward to the year on line 52 ....................................... 00 00 00
65.
Subtract line 58 (FMTI) from line 64. This is the remaining
NOL to carry forward. If less than zero, enter “0” .......................... 00 00 00
Complete and submit this page only if ling a Farmland Preservation Tax Credit (MI-1040CR-5).
+ 0000 2017 73 03 27 8
Instructions for Form MI-1045, Application for
Michigan Net Operating Loss Refund
2017 MI-1045, Page 4
What is a Net Operating Loss?
A net operating loss (NOL) occurs when business losses exceed
income in a particular year. In general terms, a federal NOL is
computed by starting with federal taxable income and making
the following modications by eliminating:
• Personal exemption allowance
• Capital losses in excess of capital gains and any excluded
capital gains
• NOL carryovers from other years
• Excess of nonbusiness deductions over nonbusiness income
• Domestic production activities deduction (DPAD).
If the end result is negative, a federal NOL has been created
for use in another tax year. The excess capital loss deduction is
calculated on a U.S. Form 1045 Schedule A, line 21 or 22. An
excess capital loss includes a U.S. Form 1040 Schedule D loss
that is limited to $3,000. The capital loss may be greater than
$3,000 if nonbusiness capital losses were offset by business
gains that are also reported on U.S. Form 1040 Schedule D.
Example: $10,000 nonbusiness stock loss and $50,000 gain from
the sale of a business asset (U.S. Form 4797) produce a U.S.
Form Schedule D gain of $40,000. The $10,000 stock loss is an
excess capital loss.
The Michigan NOL
In order to determine whether an NOL was incurred from
Michigan sources, regardless of whether or not there was a
corresponding federal NOL, complete Form MI-1045:
• Page 1 of Form MI-1045 is used to compute the Michigan
NOL for the year of the loss
• Page 2 is used to compute a refund from a carryback or to
determine the amount of a carryforward
• Page 3 is used to compute the federal net operating loss
deduction (NOLD) allowed in household income for the
farmland preservation tax credit.
The Michigan NOL is computed independently from the federal
NOL. The calculation of a Michigan NOL (for taxable income
purposes) follows the same general format of the federal NOL
calculation but begins with federal adjusted gross income
(AGI) as a starting point, rather than federal taxable income.
Therefore, federal itemized deductions that may be used to
create or contribute to the federal NOL are not taken into
consideration when calculating the Michigan NOL.
In addition to the federal modications, the Michigan NOL
calculation must be further modied to remove, to the extent
included in federal AGI:
• Any income and losses sourced to other states
• Income from Michigan oil and gas production and
nonferrous metallic minerals extraction subject to Michigan
severance tax and related production expenses
• A federal NOLD.
The Michigan NOL is subject to allocation and apportionment
as required by the Michigan Income Tax Act. See
Revenue Administrative Bulletin 2017-14 for additional
guidance.
A claim for refund based on an NOL must be led within the
four-year statute of limitations period. Therefore, when carrying
back an NOL to prior years, the MI-1045 must be led within
four years of the date set for ling the return for the year in
which the NOL was incurred. If an NOL is determined to have
been sustained in a year that is outside the four-year statute of
limitations period, a taxpayer may still claim the NOLD for
the open tax years. However, the taxpayer must calculate the
amount of the Michigan NOL that would have been absorbed
by Michigan income subject to tax in the closed tax year(s)
to determine the amount that can be carried over to the open
year(s). The Michigan Department of Treasury may redetermine
the correct taxable income in a closed tax year in order to
ascertain either the amount of an NOL or the amount of an NOL
that is absorbed in the closed tax year to determine the correct
NOLD for an open tax year.
Carryover of a Michigan NOL
The Michigan NOL may be carried over in the same manner
and to the same time periods as provided for in Section 172
of the Internal Revenue Code (IRC) in effect for the year the
loss was incurred. The amount of the Michigan NOL used in
carryover years must be reduced by any excess capital loss and/
or DPAD, attributable to Michigan, claimed in the carryover
year. For example, an NOL carryforward claimed in 2017 must
be reduced by any Michigan-sourced excess capital loss and/or
DPAD included in your 2016 AGI, to the extent the deduction(s)
reduced Michigan taxable income.
The amount of the NOLD for a given taxable year is equal to the
sum of all NOL carryforwards and carrybacks for the taxable
year. The entire amount of the NOL for a loss year must be
carried back to the earliest of the taxable years to which the loss
may be carried. The earliest year’s loss must be used rst until
it is completely absorbed or lost. Later years’ losses can then be
used until they are also absorbed or lost.
A copy of the U.S. Form 1040 and all supporting federal tax
schedules and statements for the loss year(s) that substantiate
the NOL (see “Required Supporting Documentation” on page 5)
must be included with Form MI-1045. If a carryover remains,
this documentation must be submitted for every year an NOLD
is claimed.
When there is a change in ling status, special rules apply to
carrying over a Michigan NOL, which follow the federal rules.
For additional information, see Internal Revenue Service (IRS)
Publication 536.
Carryback
The carryback period is generally limited to two years for
both federal and Michigan taxes, and any unused loss may
carry forward for 20 consecutive years following the loss
year. Exceptions to the general carryback periods used
for federal NOLs also apply to Michigan. Page 2 of the
Form MI-1045 is used to request a refund for the prior year(s).
It is not necessary to amend an MI-1040 return to claim a
refund of an NOL carryback.
When carrying back a Michigan NOL to prior years,
Form MI-1045 and supporting documentation must be led
within four years after the date set for ling the return for
the year in which the NOL was incurred. For example, if
the original NOL was incurred in 2013, the original 2013
return was due April 15, 2014. Form MI-1045 must be led by
April 15, 2018 to carry back the 2013 Michigan NOL to a
year that is otherwise outside the general four-year statute of
limitations period to claim a refund. If Form MI-1045 is led
after the four-year statutory period has expired, no refund is
allowed for the carryback year. However, after absorbing the
NOL in those carryback periods, a carryforward may still exist
to offset income in subsequent years.
Carryforward
The carryforward period is limited to 20 consecutive years
following the loss year for both federal and Michigan taxes.
Include a copy of the originally led Form MI-1045 with
each Form MI-1040 that claims the NOLD until that loss is
exhausted. A schedule demonstrating how the Michigan NOL
has been used must be included. See instructions for “Part 3:
Compute the NOL Carryforward for the Subsequent Years” on
page 6. The NOL carryover must be used in consecutive years.
The total amount of the federal NOLD used to arrive at
federal AGI must be added back on Michigan Schedule 1. The
Michigan NOLD is entered as a subtraction on the Michigan
Schedule 1. If there are Michigan NOLs from multiple tax
years, the total unused losses must be combined. This amount is
the NOL determined on Form MI-1045, line 22, less any of the
loss used in previous years.
Keep all records for the loss year(s) until the NOL has been
exhausted or the carryforward period expired.
Farmland Preservation Tax Credit
The farmland preservation tax credit is computed using
household income, not total household resources which does not
allow for an NOL.
The NOLD allowed in household income cannot exceed Federal
Modied Taxable Income (FMTI) in the year to which it is
being carried back or carried forward as dened in section
172(b)(2) of the IRC. FMTI is computed by modifying federal
taxable income to remove the federal exemption allowance,
the capital loss deduction, DPAD, and the NOLD. For more
information about FMTI, see IRS Publication 536.
When ling a refund claim from the carryback of a Michigan
NOL for the farmland preservation tax credit, prepare an
amended Form MI-1040CR-5 for each year the loss is being
carried back and include with Form MI-1045. The amount of the
allowable NOLD for use in household income is calculated on
page 3 of Form MI-1045 for both carrybacks and carryforwards.
The amount of the carryback deduction is the lesser of lines 58
or 59 and the amount of the carryforward deduction is the lesser
of lines 58 or 64. Claim the amount of the NOLD allowed on the
“federal net operating loss deduction” line on Form MI-1040CR-5
for each applicable year.
Example: Your 2015 FMTI is $20,000, and your 2015 federal
NOLD is $50,000. The amount of the 2015 NOLD of $50,000
that may be used in 2015 household income for a farmland
preservation tax credit is limited to $20,000. The balance
of $30,000 will be available for use on your 2016 farmland
preservation tax credit, limited to your 2016 FMTI.
NOTE: To deduct an NOLD from household income, there
must be a corresponding federal NOLD. If there is no federal
NOLD in AGI, there is no NOLD to claim in household income.
Nonresidents and Part-Year Residents
Nonresidents and part-year residents may also be entitled to
a Michigan NOLD. To determine if a Michigan NOL was
incurred, complete Part 1 of Form MI-1045. Only Michigan-
sourced income, losses or deductions may create a Michigan
NOL. In a carryforward year, the federal NOLD must be
removed from taxable income to the extent included in federal
AGI. Nonresidents and part-year residents enter the entire
federal NOLD in Column C on Michigan Schedule NR. The
Michigan NOL is claimed on the Michigan Schedule 1 as a
subtraction.
NOTE: Do not report a Michigan NOL on Michigan Schedule
NR or claim the federal NOLD as an addition on Michigan
Schedule 1.
Required Supporting Documentation
Include a copy of the federal income tax return with applicable
schedules and statements that substantiate the Michigan NOL:
• U.S. Form 1040, pages 1 and 2
• U.S. Form 1040 Schedule(s) A, B, C, D, E, F
• U.S. Form 4797
• U.S. Form 4835
• Any other applicable documents, including Schedule(s) K-1
from U.S. Form 1040 and the detailed schedule explained in
the instructions for Part 3
• MI-1041 and nal Schedule K-1 from the U.S Form 1041
when an NOL is created from the termination of a trust.
Be sure to indicate the business activity and location (city and
state) of each source of income or loss. If there is income or loss
subject to apportionment, a Schedule of Apportionment (Form
MI-1040H) must be included.
Amending the NOL
To amend an NOL carryforward, complete a revised Form
MI-1045 and le an amended MI-1040. Beginning with tax
year 2017, check the Amended return box at the top of page 1
of the MI-1040 form and include the Michigan Amended Return
Explanation of Changes (Schedule AMD) and all applicable
schedules and supporting documentation to amend your return.
To amend an NOL carryback, complete Form MI-1045. Write
“Amended” across the top and provide all required supporting
documentation to substantiate the change(s). It is not necessary
to amend a Form MI-1040 return for the carryback year to claim
a refund of an NOL carryback.
2017 MI-1045, Page 5
Lines not listed are explained on the form.
Part 1: Compute the Net Operating Loss
To complete Part 1, use the entries on your U.S. Form 1040 for
the year the loss occurred.
Do not include:
• Income and losses sourced to other states
• Income and losses from oil and gas production and
nonferrous metallic minerals extraction that are subject to
Michigan severance tax and the related production expenses
• A federal net operating loss deduction (NOLD)
• NOLs from other years.
Line 10: Include all state and local refunds, alimony, taxable
Social Security, unemployment compensation, and other income
in your federal adjusted gross income sourced to Michigan.
Line 14: Michigan AGI will equal your federal AGI, less any
federal NOLD, unless you have income or losses sourced to
other states, income or losses subject to Michigan severance tax,
or NOLs from other years.
Line 19: The excess capital loss deduction must be calculated
on a U.S. Form 1045 Schedule A, line 21 or 22, then entered
on this line. An excess capital loss includes a U.S. Form 1040
Schedule D loss that is limited to $3,000. The capital loss may
be greater than $3,000 if non-business capital losses were offset
by business gains that are also reported on U.S. Form 1040
Schedule D.
Line 20: Enter the (DPAD) reported on line 12e as a positive
number.
Part 2: Compute a Refund From an NOL
Carryback
Step 1: Redetermine Michigan income tax for
carryback year(s)
Line 36a: Enter the total of refundable credits for homestead
property tax, farmland preservation and any other refundable
credits claimed for the tax year(s) to which you are carrying
back the loss. A farmland preservation tax credit entered here
must be recomputed for the NOLD adjustment to household
income, if applicable. Include an amended Form MI-1040CR-5.
Line 36c: For the year listed on line 23, enter total tax paid with
Form MI-1040 plus any additional tax paid after the original
return was led. Do not include penalty or interest that was
reported on the return or included with any payment(s).
Step 2: Compute the NOL deduction for subsequent
carryback year(s)
Lines 41 through 43 remove the excess capital loss and DPAD
from the amount of the NOL available to be carried forward to
the next year.
Part 3: Compute the NOL Carryforward for the
Subsequent Years
The purpose of Part 3 is to calculate the NOL carryforward
after utilizing an NOL carryback or after making an election to
forgo a carryback. If an NOL carryforward exists in subsequent
years, provide a detailed schedule that: (1) shows the calculation
in the same manner as Part 3 and (2) tracks how the NOL is
being exhausted.
Part 4: Adjust the NOL for Household Income
Line 53: Include NOL carryovers or carrybacks from earlier
years.
Line 54a: Adjustments to AGI, such as taxable Social Security
benets and IRA deductions, must be recalculated based on
modied federal AGI. Add back any DPAD.
Line 56: Enter itemized deductions claimed on U.S. Form 1040
Schedule A on lines 56 a through 56h. If the standard deduction
was claimed enter that amount on line 56i.
56a: Medical adjustments. The amount of medical adjustments
allowed varies with federal law from year to year. You must
recalculate your medical expense deduction based on modied
federal AGI and the federal limitation in effect for the year
entered on line 52.
56c: Percentage limitations on charitable contributions are
based on modied federal AGI.
56g: Miscellaneous deductions are limited to 2 percent of AGI.
This amount cannot exceed 2 percent of modied federal AGI.
56h: If modied federal AGI exceeds certain amounts, itemized
deductions may be limited. See limitations in effect for the year
entered on line 52.
Line 58: This is your federal modied taxable income (FMTI).
Your NOLD will be the amount on this line or the amount from
line 59 (or line 64 for carryforwards), whichever is smaller. This
amount cannot be less than zero.
Line 59: Enter your federal NOL in column A as a positive
amount. Each succeeding year will be the unabsorbed portion,
if any, from line 60 of the preceding column.
Line 60: Subtract line 58 from line 59. If the result is more
than zero, this is the excess NOL to be carried forward to the
next year. If it is less than zero, the NOLD is limited to the
unabsorbed portion on line 59. This is the last year affected by
the NOL.
Line 65: If line 58 is less than line 64, subtract line 58 from
line 64 and enter here; then use line 58 as your NOLD to
recalculate your farmland preservation tax credit. If line 58 is
greater than line 64 enter “0” and use line 64 as your NOLD to
recalculate your credits.
Forms or Questions
Michigan tax forms are available at www.michigan.gov/taxes.
Call 517-636-4486 if you have questions or to request tax forms.
2017 MI-1045, Page 6
LINE-BY-LINE INSTRUCTIONS
Michigan NOL Carryforward Example
A full-year Michigan resident born in 1942 has the
following business and rental activity reported on their
U.S. Form 1040 in tax Year 00:
• Schedule C
$18,000 Michigan and $2,500 Indiana
• Schedule E, Part 1, rental income
$6,500 Arizona
• Schedule E, Part 2, ow-through income or (loss)
($87,000) Michigan and ($8,500) Ohio
• Self-employment tax deduction
$202 Michigan and $28 Indiana
• Domestic Production Activities Deduction [DPAD]
$2,000 Michigan and $1,200 Ohio
Federal adjusted gross income [AGI] is ($41,170) for Year 00.
Form MI-1040 for tax Year 00 reports the following:
• Federal AGI ($41,170)
• Additions
• Schedule 1, line 2: Deduction for SE taxes $230
• Schedule 1, line 4: Business loss, Ohio $8,500
• Schedule 1, line 7: Federal NOLD $4,000
• Schedule 1, line 8: DPAD, Ohio $1,200
• Subtractions
• Schedule 1, line 13: Business income, Indiana $2,500
• Schedule 1, line 13: Rental income, Arizona $6,500
• Schedule 1, line 16: Michigan income tax
refunds included in AGI $560
• Schedule 1, line 25: Pension subtraction $12,500
• Michigan income subject to tax ($49,300)
The taxpayer must complete the rst page of the MI-1045 to determine (1) if a Year 00 Michigan NOL exists, and (2) the
amount of the Year 00 Michigan NOL. In this example, a Michigan NOL exists and the taxpayer elects to forgo an NOL
carryback. The full NOL will be carried forward beginning with Year 01. The Michigan Year 00 NOL is calculated below.
Federal AGI
Year 00
Michigan
Adjustments
MI-1045 Part 1
Year 00
Wages $25,000 $25,000
Interest Income 120 120
Dividend Income 80 80
Schedule C Income or (Loss)
20,500 2,500 Indiana 18,000
Business income attributable to Michigan
Capital Gain or (Loss) (3,000) (3,000)
Pension 12,500 12,500
Schedule E, Part 1, Income or (Loss)
6,500 6,500 Arizona 0
Schedule E, Part 2, Income or (Loss)
(95,500) (8,500) Ohio (87,000) Business loss attributable to Michigan
Misc: State Tax Refunds 560 560
Other: Prior Year Federal NOL (4,000) 0 A federal NOL does not affect a Michigan
NOL calculation.
Total Income ($37,240) ($33,740)
Adjustments
Retirement Plan Contributions 500 500
Deductions for Self-Employment Tax 230 28 Indiana 202
DPAD 3,200 1,200 Ohio 2,000 DPAD attributable to Michigan
Total Adjustments 3,930 2,702
Federal AGI ($41,170) ($36,442)
Federal AGI attributable to Michigan
For demonstration purposes,
assume for Year 00 the federal
NOL computes to $66,200. The
carryforward to Year 01, minus
the DPAD, is $63,000.
The excess capital loss and DPAD
are removed in the initial calculation
of an NOL and cannot be used to
create or increase an NOL.
3,000 Excess capital loss deduction
(MI-1045, line 19)
2,000 DPAD (MI-1045, line 20)
($31,442) Michigan NOL for Year 00
2017 MI-1045, Page 7
The Year 01 federal AGI is ($30,700), which consists of the
following:
Wages $10,000
Schedule C - MI (2,000)
Schedule C - IN 3,000
Schedule E, Part 1 – AZ (4,000)
Schedule E, Part 2 – MI 15,000
Schedule E, Part 2 – OH (1,500)
Pension 12,500
Total Income $33,000
Federal NOLD from Year 00 carryforward (63,000)
Adjustment for DPAD – MI (500)
Adjustment for DPAD – IN (200)
Federa l AGI ($30,70 0)
To determine the amount of a Michigan NOL that remains
after being carried to another year, a calculation must be made
to determine how much Michigan income was offset in the
carryover year. To calculate this amount, determine income
subject to tax (before the exemption allowance) without regard to
the subtraction allowed for the Michigan NOLD. If this amount is
greater than the NOLD, the entire NOL is used and not available
to carry to the next year. If this gure is less than the NOLD, the
difference will be the NOL available to be carried to the next
year after removing excess capital loss deduction and DPAD
sourced to Michigan.
The NOL available for carryover from Year 0 0 ($31,442)
exceeds Michigan taxable income ($22,500) in Year 01, which is
calculated without regard to the Michigan NOLD and Michigan
exemptions. The Michigan NOL absorbed in Year 01 equals
Michigan taxable income without regard to the Michigan
NOLD and Michigan exemptions. A subtraction is taken on
the Michigan Schedule 1 for a Michigan NOLD, reporting the
entire NOLD balance available in the tax year $31,442. The NOL
carryforward to Yea
r 02 computes to $8,442.
Year 01: Michigan NOL Carryforward Computation
Federal AGI ($30,700)
Michigan Additions:
Schedule E, Part 1 – AZ 4,000
Schedule E, Part 2 – OH 1,500
Federal NOLD 63,000
Adjustment for DPAD – IN 200
Subtotal 38,000
Michigan Subtractions:
Schedule C – IN 3,000
Pension 12,500
Total income subject to MI tax, without regard
to the MI NOLD or MI exemptions $22,500
Michigan NOL carryover available from Year 00 31,442
Total income subject to MI tax, without regard
to the MI NOLD or MI exemptions 22,500
MI NOL available for carryforward to Year 02
before adjustment for Michigan DPAD. $8,942
DPAD attributable to Michigan (500)
Total MI NOLD available for Year 02 $8,442
According to IRC section 172(b)(2) and modications
referred to in IRC section 172(d), any remaining NOL, after
redetermining the tax must be reduced by the amount of
DPAD reported in that year before carrying the NOL to
another year.
The Michigan NOL available as a carryforward to Year 02,
($8,942) was reduced by DPAD attributed to Michigan ($500),
thereby decreasing the Michigan NOL amount to $8,442.
The Year 02 federal AGI is $19,350, which consists of the
following:
Wages $15,000
Interest 250
Dividend 100
Schedule C – MI 14,000
Schedule C – IN 2,500
Schedule E, Part 1 – AZ 5,000
Schedule E, Part 2 – MI (5,000)
Schedule E, Part 2 – OH 5,000
Pension 12,500
Total Income $49,350
Remaining federal NOLD from Year 01
carryforward after adjusting for DPAD of $700 (30,000)
Federal AGI $19,350
In Year 02 a subtraction is taken on the Michigan
Schedule 1 for a Michigan NOLD reporting the full amount
available of $8,442. The available Michigan NOL does not
exceed Michigan taxable income of $24,350, calculated
without regard to the Michigan NOLD and Michigan
exemptions. The balance of the Michigan NOL from loss
Year 0 0 is exhausted in the carryforward used in Year 02.
Year 02: Michigan NOL Carryforward Computation
Federal AGI $19,350
Michigan Additions:
Federal NOLD 30,000
Subtotal 49,350
Michigan Subtractions:
Schedule C – IN 2,500
Schedule E, Part 1 – AZ 5,000
Schedule E, Part 2 – OH 5,000
Pension 12,500
Total income subject to MI tax, without
regard to the MI NOLD or MI exemptions
$24,350
Michigan NOL carryforward available from Year 01 $8,442
Total income subject to MI tax after applying
MI NOL (NOL absorbed) $15,908
MI NOL available for carryforward to Year 03 $0
2017 MI-1045, Page 8
Download
Save PDF to desktop
Email
Email completed PDF
Send for Signing
Email for others to sign
Print
Print document
Choose a Field
Click on a field and
select the person that should complete it
Want to add a signature?
You can add a signature field
and assign it to someone else
to sign
Choose a Field
Click on a field and
select the person that should complete it

MI-1045 609063 7 2017 Application for Michigan Net Operating Loss Refund MI-1045

This document is locked as it has been sent for signing.

You have successfully completed this document.

Other parties need to complete fields in the document. You will recieve an email notification when the document has been completed by all parties.

This document has been signed by all parties.

Completed 10 March 2020

Message

View Audit Log
Print With Audit Log
Duplicate Document