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CITY OF HAMTRAMCK INCOME TAX
INSTRUCTIONS FOR SCHEDULE L OF H-1040(R)
General Information (5d) Gain (or loss) from the Sale or Exchange of Property
The Hamtramck Income Tax Ordinance imposes a tax rate of 1% Your residency status on the date that the sale or exchange
on income of residents of Hamtramck, and 1/2% on that income of of property took place determines whether the sale or
nonresidents of Hamtramck which is subject to the Hamtramck income exchange shall be considered as a transaction by a resident
tax. In addition, certain types of income may be taxed differently to or a nonresident.
residents and nonresidents.
Schedule L of H-1040(R) provides a means whereby an individual Sales or Exchange While a Resident - If the property was acquired
can arrive at his total tax liability if, during the taxable year, he earned and sold after Oct 1, 1962 and you were a resident on the date of
part of his income as a resident of Hamtramck and part of his income sale use the same gain or loss on the property which appears on
as a nonresident your Federal Retain. If the property was acquired prior to Oct 1,
Who Must Use Schedule L 1962, see instructions on Resident individual Return H-1040(R)
Schedule L must be filled out and attached to Form H-1040(R) if, on how to determine the taxable portion of the gain or loss. Gains
during the taxable year, part of your income was earned as a resident, or loss from both tangible and intangible property are taxable to
and part of your income subject to the Hamtramck tax was earned while residents. The location of the property is immaterial.
you were a nonresident. Do not use Schedule L unless you had income
subject to the Hamtramck tax both as a resident and in a nonresident. Sale or Exchange While a Nonresident - Only that portion of the
Be sure to indicate the time period you were a Hamtramck resident gain or loss which occurred after Oct 1, 1962 from the sale or
by answering Question C on the Resident Individual Return Form exchange of tangible property located in Hamtramck is taxable
H1040(R). to nonresidents.
Computation of Taxable Income
Lines I and 5 of Schedule L describe the types of income that are (5e) Income from Estates and Trusts
subject to tax. Enter in column I (“All income Earned While a Resident If you were a beneficiary of an estate or trust, enter in
of Hamtramck.”) the income subject to tax that was earned during the column I your share of the income from the estate or trust
year while a resident. Enter in column II (“Hamtramck Income While while you were a resident Do not report your portion of the
a Nonresident”), the income subject to tax that was earned during the income earned while you were a nonresident. The estate or
year while a nonresident. trust will file a return and pay the tax for nonresidents.
You must attach schedules to support each amount entered on (5g) Net Income (or low) from Business or Profession
Schedule L, lines 1 and 5. The schedule of each type of income should Attach information for each separate business to support
show: (1) the total amount of resident income and the total amount of entries on line 5(g)
nonresident income earned during the period of time you were a (5h) Net Operating Loss Carryover
resident and nonresident and (2) your computation of the portion of the Line 5(h) must be used to deduct a net operating loss
total amount of each type of resident and nonresident income, which carryover from prior years. If line 5(h) represents only a net
was subject to the Hamtramck tax, and which was used as a basis for operating loss carryover, circle these words on line 5(h). If
entry on lines 1 and 5 of Schedule L. both miscellaneous income and operating loss carryover are
Instructions for the Individual Resident Form H-1040(R) and for the combined, attach a schedule showing the amount of each..
individual Nonresident Form (H.1040(NR) should be carefully (7) Loss Transfers
reviewed before entries are made in columns I and II of Schedule L When a loss exists on line 6 in either columns I or II and
for each type of income there is income in the other column, line 7 must be used to
The following instructions for the specific types of income listed subtract the loss from the loss from the income column to
below should be used in conjunction with the instructions for the arrive at the net income (or loss) on line 8.
residents and nonresident forms.
(1) Income from Employers Exemptions
All wages and salaries earned while a resident are to The amount allowed for exemptions is first applied against resident
be reported, whether or not your work was performed in income. If the amount allowed for exemptions exceeds resident
Hamtramck. That portion of your wages and salaries earned income, such excess is then to be applied against nonresident income.
in Hamtramck as a nonresident is to be reported on the ratio Therefore, complete Schedule A of the Resident Individual Return
of the actual number of days worked in Hamtramck while a Form H-1 040(R) to arrive at the number of exemptions allowed; and
nonresident. then enter this total on Schedule L, column 1, line 9. If column 1, line
(3) Deduction from Resident Long Form, Schedule M, page 2 9, exceeds resident income, enter such excess in column II, line 11.
See instructions under “Deduction and Exclusions” on page Computation of Tax
2 of the Resident Long Form for description of the amounts to The tax rate for residents is 1% The tax rate for nonresidents is 1/2%
be entered on this line, Deductions applicable to nonresident on taxable income. Enter an Schedule L, line 13, 1% of the amount on
income to total nonresident income, line 10, column I Enter on Schedule L, line 14,1/2% of the amount on
(5a b) Income from Dividends, Interest and Royalties line 12, column 11. The total of lines 13 and 14 should be entered an
Enter in the resident column income from dividends, line 15. Transfer the amount appearing on Line 15 of Schedule L to
interest and royalties while a resident. Income of this nature is line 14, of the Resident Individual Return, H-1040(R) and check the
not taxable to a nonresident. Dividend income received from box on line 15 of H-1040(R)
taxable domestic corporations is subject to the same dividend Completion of Resident Form H-1040(R)
exclusion as provided by the Federal Internal Revenue Code. Schedule L is not a return in itself and must be attached to a Resident
(5c) Income (or loss) from Rents Individual Retain, Form H-1040(R). After entering your tax on line 12
All rental income earned while a resident is to be reported, of form H-1040(R) the instructions for the Resident Individual Return
regardless of the location of the property. However, residents should be followed to complete the remaining sections of the return.
should report only that portion of rental income derived from Sign the return and attach your check and W-2 form to the left hand
the rental of real and tangible personal property located in side of Form H-1040(R) in the place designated.
Hamtramck.
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