Michigan Qualified Affordable Housing Seller's Deduction
Extracted from PDF file 2017-michigan-form-4579.pdf, last modified January 2018
Qualified Affordable Housing Seller's DeductionAttachment 23 Michigan Department of Treasury 4579 (Rev. 04-17) 2017 MICHIGAN Business Tax Qualified Affordable Housing Seller’s Deduction Issued under authority of Public Act 36 of 2007. PART 1: SELLER/BUYER IDENTIFICATION Note: Seller must obtain buyer’s signature and attach this form, and a copy of the buyer’s operation agreement, to the seller’s MBT Annual Return (Form 4567). Seller Name (If Unitary Business Group, Name of Designated Member) Federal Employer Identification Number (FEIN) or TR Number Unitary Business Groups Only: Name of Unitary Business Group Member Reporting on This Form Federal Employer Identification Number (FEIN) or TR Number Buyer Name Federal Employer Identification Number (FEIN) or TR Number PART 2: QUALIFIED AFFORDABLE HOUSING DEDUCTION PROPERTY INFORMATION Street Address of Property City Property Tax Parcel Identification Number State ZIP Code MI PART 3: CALCULATION OF SELLER’S DEDUCTION 1. Gain from the sale as reported on seller’s federal tax return for this period.......................................................... 2. Number of residential rental units in this property that the buyer committed in the operation agreement to operate as rent restricted units................................................. 1. 00 5. 00 6. 7. 00 00 2. 3. Total number of residential rental units in this property .................................................... 3. % 4. Divide line 2 by line 3 and enter as a percentage............................................................. 4. 5. Multiply line 1 by the percentage on line 4. Carry to the seller’s Form 4567, line 48i. (UBGs, see instructions) .. PART 4: CALCULATION OF LIEN FOR INSTALLMENT SALES Complete only if this is the first year of an installment sale. 6. Total gain over life of installment note ................................................................................................................... 7. Multiply line 6 by the percentage on line 4 ............................................................................................................ PART 5: SELLER/BUYER CERTIFICATION SELLER CERTIFICATION I certify, under penalty of perjury, that the information in this return and attachments is true and complete to the best of my knowledge. Authorized Signature for Seller’s Tax Matters Authorized Signer’s Name (print or type) Title Date Telephone Number BUYER CERTIFICATION n I certify that the buyer of the property identified above is a limited dividend housing association, corporation, or cooperative organized and qualified pursuant to Chapter 7 of the state housing development authority act of 1966, 1966 PA 346, MCL 125.1491 to 125.1496. n n n n I certify that the buyer of the property identified above is a qualified affordable housing project as defined in MCL 208.1201(9)(b), including having a limitation on the amount of dividends or other distributions that may be distributed to its owners in any given year and having received funding, subsidies, grants, operating support, or construction or permanent funding through one or more sources and programs named in that statute. I understand that the deductible amount of seller’s gain, as identified on line 5 or 7 above (whichever applies), proportionately reduced with the passage of time, must be reported by the buyer as recaptured tax liability if the buyer fails to qualify and operate as provided in the operation agreement within 15 years after the purchase. I understand that promptly after receiving this form the Michigan Department of Treasury will record a lien on this property in the amount identified on line 5 or 7 above (whichever applies), and maintain its lien for 15 years, to secure payment in the event recapture occurs during that time. I certify, under penalty of perjury, that the information on this form and the attached operation agreement is true and complete to the best of my knowledge. Authorized Signature for Buyer’s Tax Matters Authorized Signer’s Name (print or type) Title + 0000 2017 55 01 27 0 Date Telephone Number 4579, Page 2 Instructions for Form 4579 Michigan Business Tax (MBT) Qualified Affordable Housing Seller’s Deduction Purpose Public Act (PA) 168 of 2008 provides for deductions from the Business Income Tax base and Modified Gross Receipts Tax base for certain amounts associated with the sale of residential rental units to — and operation of those units by — a qualified affordable housing project. This form is used to calculate the seller’s deduction and establish the maximum recapture that the buyer may be liable for if it fails to qualify as a qualified affordable housing project or fails to operate in accordance with the operation agreement. NOTE: Beginning January 1, 2012, only those taxpayers with a certificated credit, which is awarded but not yet fully claimed or utilized, may elect to be MBT taxpayers. If a taxpayer files an MBT return and claims a certificated credit, the taxpayer makes the election to file and pay under the MBT until the certificated credit and any carryforward of that credit are exhausted. A taxpayer making a valid certificated credit election may also claim the credits on this form. Eligibility Qualified affordable housing project means a person that is organized, qualified, and operated as a Limited Dividend Housing Association that has a limitation on the amount of dividends or other distributions that may be distributed to its owners in any given year and has received funding, subsidies, grants, operating support, or construction or permanent funding through one or more sources, including those listed below: • Mortgage or other financing provided by the Michigan State Housing Development Authority, the Federal Department of Housing and Urban Development (HUD), the Federal Department of Agriculture for Rural Housing Service, the Michigan Interfaith Housing Trust Fund, Michigan Housing and Community Development Fund, Federal Home Loan Bank, Housing Commission Loan, Community Development Financial Institution, or mortgage or other funding or guaranteed by Fannie, Ginnie, Federal Housing Association, United States Department of Agriculture, or Federal Home Loan Mortgage Corporation. • A tax exempt bond issued by a nonprofit organization, local government, or other authority. • A payment in lieu of tax agreement or other tax abatement. • Funding from the state or local government unit through a HOME investments partnership program. • A grant or other funding from a federal home loan bank’s affordable housing program. • Financing or funding under the Federal New Markets Tax Credit Program. • Financing under HUD’s Hope VI Program as authorized by Section 803 of the National Affordable Housing Act, HUD’s Section 202 program authorized by Section 202 of the National Housing Act, and under the Low-Income Housing Tax Credit program under Internal Revenue Code § 42. • Financing or other subsidies from any new programs similar to any of the above. A limited dividend housing association is organized and qualified pursuant to Chapter 7 of the State Housing Development Authority Act (Michigan Compiled Law 125.1491 et seq). The seller and buyer of affordable rental units must enter into an “operation agreement” in which the buyer agrees to operate a specific number of the residential rental units sold as rent restricted units for a minimum of 15 years. If these requirements are satisfied, the seller may take a deduction from its Business Income Tax base – after apportionment – of the gain from the sale of the residential rental units to the qualified affordable housing project. If, under the agreement, the buyer agrees to operate something less than the full amount of the rental units as rent restricted units, then the deduction is limited to the gain on the sale of the rental units multiplied by a fraction, which is the number of rental units sold to be operated as rent restricted units over the total number of residential rental units sold. If a sale of qualifying property is reported on the installment method for Federal Income Tax purposes, the gain — or a proportional amount of the gain — may be deducted over time under the installment method so long as this treatment is consistent with the seller’s treatment of the transaction for Federal Income Tax purposes. Liens and Recapture The Michigan Department of Treasury must record a statutory lien against the property subject to the operation agreement for the full (maximum) amount of the deduction from the Business Income Tax base of the seller. If a sale of qualifying property is reported on the installment method for Federal Income Tax purposes, the lien will be filed in the initial year of the sale for the full amount of the cumulative deductions. If the buyer fails to qualify as a qualified affordable housing project or fails to operate any of the residential rental units as rent restricted units in accordance with the operation agreement within 15 years after the date of purchase, a proportionate amount of the lien becomes payable to the State. A qualified affordable housing project that converts some but not all of its rent restricted units to free market units in violation of the operation agreement would experience recapture. Failure to operate just one residential rental unit in accordance with an operation agreement constitutes failure to operate “all or some” of the residential rental units as rent restricted units in accordance with the operation agreement. The lien is payable through a “recapture” to be added to the tax liability of the buyer in the year the recapture event occurs, the amount of which is equal to the full amount of the deduction allowed the seller multiplied by a fraction, which is the difference between 15 and the years the affordable housing project qualified and complied with the terms of the agreement over 15. This recapture is reported on the MBT Schedule of Recapture of Certain Business Tax Credits and Deductions (Form 4587) and is mandatory even if a taxpayer does not meet the MBT gross receipts filing threshold. Line-by-Line Instructions Lines not listed are explained on the form. Name and Account Number: Enter name and account number as reported on page 1 of Form 4567. Unitary Business Groups (UBGs): Complete one form for each member for whom this schedule applies. Enter the Designated Member (DM) name in the Taxpayer Name field and the specific member of the UBG for which this form is filed on the line below. Line 5: Multiply line 1 by the percentage on line 4. Carry this amount to the seller’s Form 4567, line 48i. UBGs: Carry amount on line 5 to the MBT Unitary Business Group Combined Filing Schedule for Standard Members (Form 4580), Part 2A, line 45i.
4579, 2017 Michigan Business Tax Qualified Affordable Housing Seller’s Deduction
More about the Michigan Form 4579 Corporate Income Tax
We last updated the Qualified Affordable Housing Seller's Deduction in February 2018, and the latest form we have available is for tax year 2017. This means that we don't yet have the updated form for the current tax year. Please check this page regularly, as we will post the updated form as soon as it is released by the Michigan Department of Treasury. You can print other Michigan tax forms here.
Other Michigan Corporate Income Tax Forms:
|Form Code||Form Name|
|Form MI W-4P||Withholding Certificate for Michigan Pension or Annuity Payments|
|Form 4884||Pension Schedule|
|Form 4891||CIT Annual Return|
|Form 4918||Annual Flow-Through Withholding Reconciliation Return|
|Form 4920||Flow-Through Withholding Opt-Out Schedule|
Michigan usually releases forms for the current tax year between January and April. We last updated Michigan Form 4579 from the Department of Treasury in February 2018.
About the Corporate Income Tax
The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.
Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).
Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.
Historical Past-Year Versions of Michigan Form 4579
We have a total of seven past-year versions of Form 4579 in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
4579, 2017 Michigan Business Tax Qualified Affordable Housing Seller’s Deduction
4579, 2016 Michigan Business Tax Qualified Affordable Housing Seller’s Deduction
Form 4579, 2011 Michigan Business Tax Qualified Affordable Housing Seller's Deduction
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