|
|  |
 Printer Friendly
 Text Version  Email Page
| Mi36. If a taxpayer that is a unitary business group has a business loss carry forward under MCL 208.1201(5), what happens to the business loss carry forward if membership in the unitary business group changes? |
When the membership of a taxpayer that is a unitary business group changes,
the business loss carryforward of the unitary business group is divided among
the unitary business group and the departing members in proportion to the losses
the members would have generated had each member filed separately. Specifically,
the portion of the business loss carryforward of a taxpayer that is a unitary
business group attributable to a departing member is an amount equal to the
business loss carryforward of the unitary business group multiplied by a
fraction, the numerator of which is what would have been the business loss of
that member had that member filed a separate return, and the denominator of
which is the sum of what would have been the separate business losses of all
members of the group in that year having business losses if those members filed
separate returns.
Example. Taxpayer LMNOP is a unitary business group comprised of Corporations L,
M, N, O, and P. The 2008 tax year generated an apportioned business loss of $100
to be carried forward to the 2009 tax year. However, due to a change in
ownership, Corporation P is not part of the unitary business group for the 2009
tax year. If each member calculated their business income tax base on a separate
basis for 2008, only Corporations N, O, and P showed losses of 50, 70, and 30
respectively. P gets a business loss carryforward of $20 [(30/(50+70+30))*100)
for the 2009 tax year. Taxpayer LMNO retains a business loss carryforward of
$80.
|
|
