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Screen MICAdj - Michigan Composite Adjustments (1120)

Additions

Enter state and local income tax adjustments in the statement. Amounts in this statement transfer from the
Taxes and licenses
 statement in the federal Inc Screen, as well as from taxes entered in the federal Farm, Rent, and 4835 Screens. The application assumes these amounts aren't taxable to Michigan. Enter adjustments to state and local income taxes in the
State Amount
 column of the statement.
Enter interest on state and local obligations in the statement. The amounts in the statement transfer from the federal return. The application assumes these amounts aren't taxable in Michigan. Enter adjustments to interest on state and local obligations in the
State Amount
 column of the statement window.

Subtractions

Charitable contributions and amounts reported as itemized deductions on U.S. Schedule A aren't allowable subtractions in determining Michigan taxable income. Enter amounts such as interest from U.S. obligations and other deductions not included in determining ordinary income in the
State Amount
 column of the statement.

Sale or Exchange of Section 179 Property

Per the Form 4797 instructions, S Corporations are required to separately report to the shareholders the sale, exchange, or the other disposition of assets where a Section 179 expense deduction was claimed in a prior year. These asset dispositions are no longer reported on Forms 4797, 4684, 6252 or 8824, but instead are separately reported on federal Schedule K, line 17d and in the Schedule K-1 statements.
The gain or loss on the disposition of Section 179 assets is calculated from information entered in the federal SalePT and 8824PT Screens in the Income and activities folders, and the K1Sale and 8824 Screens in the K1 1065, 1041 folder. The application reduces the basis of the asset by that amount of the Section 179 deduction when calculating the gain or loss. This amount is included on Form 807, Page 2, line 33, the MI Composite Participants' Total Income Worksheet, and the MI Shareholder’s Share of Income and Modifications Worksheet. A Not Required statement prints, detailing this amount. Use Force to override the calculated amount. If
0
 (zero) is entered, no adjustment is made.
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