MI-4797: Adjustments of Gains and Losses From Sales of Business Property (2024)
Michigan · Michigan Treasury · Used for tax years 2024
Michigan Form MI-4797 adjusts gains and losses from sales of business property reported on U.S. Form 4797. It compares federal gains and losses with the amounts subject to Michigan income tax and is filed with Form MI-1040 or MI-1041.
Who files this form
Use 2024 MI-4797 only to adjust Michigan taxable income for capital gains or losses attributable to:
- Sales of certain types of property located in other states and/or subject to Michigan’s allocation provisions.
- Periods before October 1, 1967, under the Section 271 adjustment.
If you file U.S. Schedule D or Form 4797 and elect the Section 271 adjustment, you must file the equivalent Michigan forms, MI-1040D or MI-4797, and include all gains and losses realized during the tax year.
Do not use MI-4797 to apportion Michigan business income gains or losses. The form directs those amounts to MI-1040H or MI-461, if applicable.
What you'll need
- U.S. Form 4797: Use it to complete the corresponding entries and include a copy with your return.
- Property details: Descriptions, acquisition dates, sale dates, and federal and Michigan gains or losses.
- Filer identification: Individuals enter their name and full nine-digit Social Security number. Fiduciary filers enter the estate or trust name and full Federal Employer Identification Number (FEIN).
- Other federal forms, if applicable: Form 4684 for casualty or theft amounts, Form 6252 for installment sales, and Form 8824 for like-kind exchanges.
- Additional casualty or theft attachments: For line 3, include Form 4684 and a Michigan gain computation schedule if the gain came from more than one casualty or theft and some or all property was acquired before October 1, 1967. For line 14, include Form 4684 and a Michigan gain or loss computation schedule if the gain or loss came from more than one casualty or theft.
How to file
Include MI-4797 with your Michigan MI-1040 or MI-1041 return. Also include a copy of your U.S. Form 4797.
Type or print in blue or black ink and report all amounts in whole dollars. Complete and include page 2, or the form cannot be processed.
The supplied text does not provide a mailing address or e-file directions.
Common mistakes
- Leaving out page 2: The form cannot be processed unless page 2 is completed and included.
- Omitting U.S. Form 4797: A copy must be included with your return.
- Using MI-4797 to apportion business income: Use MI-1040H or MI-461, if applicable, instead.
- Leaving out gains or losses when electing Section 271: You must include all items of gain or loss realized during the tax year.
- Ignoring entry requirements: Use blue or black ink and report whole-dollar amounts.
Questions people ask
Can an estate or trust use MI-4797?
Yes. The form provides for fiduciary filers and is filed with MI-1041. Enter the estate or trust name and full FEIN.
Where do I enter federal and Michigan gains or losses?
For line 2, copy the corresponding U.S. Form 4797 information into columns A through D. Enter the gain or loss subject to Michigan income tax in column E.
What if I am a nonresident or part-year resident allocating capital gains or losses?
The form directs you to the instructions for Schedule NR, line 8.
How is the Section 271 adjustment calculated?
Multiply the gain or loss in column D by the number of months the property was held after September 30, 1967, then divide by the total number of months held. Enter the result in column E. Exclude the first month if acquisition occurred after the 15th, and exclude the last month if disposal occurred on or before the 15th.