5459: City of Detroit Partnership Renaissance Zone Schedule (2024)
Michigan · Michigan Treasury · Used for tax years 2024
Form 5459 is the 2024 City of Detroit Partnership Renaissance Zone Schedule. It uses property, rent and compensation amounts to calculate a Renaissance Zone apportionment percentage and figures each partner’s deduction for business and non-business income.
Who files this form
Form 5459 is used to calculate the Detroit Renaissance Zone deduction for a qualifying partnership. To claim the deduction, the partnership must:
- Have real and/or personal property in a Detroit Renaissance Zone and conduct business activity there.
- File a Statement of Eligibility with the City of Detroit and obtain approval for tax relief.
A partnership is disqualified if it is delinquent in filing or paying the state or local taxes listed in the instructions. Other disqualifiers include failing to file the required residential rental property affidavit, moving from elsewhere in Detroit into a zone without City approval, and certain job relocations that a local government objects to.
If the partnership elects to pay tax for its partners, it claims the deduction on Form 5458. Otherwise, the deduction passes through to the partners to claim on their Detroit individual income tax returns.
When it's due
For the 2024 schedule, a partnership that owns residential rental property must have filed an affidavit with the Detroit City Treasurer’s Office by December 31 of the prior tax year. The affidavit must attest that the property substantially complies with applicable state and local zoning, building, and housing laws or codes.
The supplied text does not state a filing deadline for Form 5459.
What you'll need
Have these forms and details available to complete the schedule:
- Form 5458, completed through Schedule E, including the partnership name, FEIN, partner letter designations, and allocated income.
- The beginning and ending dates the partnership qualified for the zone deduction during the tax year.
- Property net book values, gross rent, and employee compensation for Detroit locations and Renaissance Zone locations.
- Each partner’s net operating loss deduction and partnership-related retirement plan deduction claimed on Form 5118, 5119, or 5120, as applicable.
- Each partner’s relevant income amounts and, for qualified residents domiciled in a Detroit Renaissance Zone, beginning and ending qualification dates.
- The zone’s final year of designation, to determine the allowable deduction percentage.
Common mistakes
- Starting Form 5459 too soon. Complete Form 5458 through Schedule E first.
- Using different partner letters. Use the same partner designations, (a) through (e), on lines 8, 9, and 10 as on Form 5458.
- Using a full-year property average for a partial-year zone location. Line 6a requires a monthly average if the business was in the zone for less than a year.
- Including income that cannot qualify. Do not use income used to calculate another deduction under the income tax ordinance or income from illegal activity.
- Claiming a deduction after the zone designation expires. No deduction is allowed after expiration.
- Forgetting to transfer the deduction. The form directs you to carry each partner’s line 10, column 3 amount to the appropriate partner line on Form 5458, line 11a, column 2.
Questions people ask
What if the partnership has more than five partners?
Complete additional copies of page 2, or attach a separate document containing the required information for all partners on lines 8, 9, and 10. All other partnership information must still be completed on Form 5459.
How is the Renaissance Zone apportionment percentage calculated?
Divide zone property and rent on line 6c by Detroit property and rent on line 5c. Divide zone compensation on line 6d by Detroit compensation on line 5d. Add those percentages and divide by two.
Does the deduction decrease as the zone designation nears its end?
Yes. The allowable percentage is 100% for a tax period beginning in the third or an earlier year before the final designation year, 75% in the second year before the final year, 50% in the year immediately before the final year, and 25% in the final year. No deduction is allowed after the designation expires.
Can every partner include interest and dividend income?
No. On line 9, column 2, enter the partner’s share of interest and dividend income only for a partner who was a resident domiciled in a Detroit Renaissance Zone. Enter zero for all other partners.