MI-4797: Adjustments of Gains and Losses From Sales of Business Property (2025)
Michigan · Michigan Treasury · Used for tax years 2025
Form MI-4797 reports Michigan adjustments to 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 2025 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 a Section 271 adjustment, you must file the equivalent Michigan forms, MI-1040D or MI-4797, and include all gains or losses realized during the tax year.
Do not use MI-4797 to apportion Michigan business income gains or losses. The instructions direct those amounts to MI-1040H or MI-461, if applicable.
What you'll need
- Your U.S. Form 4797. Include a copy with your return.
- Your MI-1040 or MI-1041, with MI-4797 attached.
- Property descriptions, acquisition and sale dates, federal gains or losses, and the portions subject to Michigan income tax.
- For individual filers, the filer’s name and full nine-digit Social Security number. For fiduciary filers, the estate or trust name and full Federal Employer Identification Number (FEIN).
- U.S. Forms 4684, 6252, or 8824, if you have amounts from those forms to report on MI-4797.
For line 3, include a copy of U.S. Form 4684 and a Michigan gain computation schedule if the gain came from more than one casualty or theft and some or all of the property was acquired before October 1, 1967.
For line 14, include a copy of U.S. 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 2025 MI-1040 or MI-1041. Also include a copy of your U.S. Form 4797 with your return.
Type or print in blue or black ink, and report all amounts in whole dollars. Complete and include page 2. The form states that it cannot be processed without it.
The supplied text does not give a mailing address or e-file instructions.
Common mistakes
- Leaving out page 2. MI-4797 cannot be processed unless page 2 is completed and included.
- Omitting the federal form. Include a copy of U.S. Form 4797 with your return.
- Using MI-4797 to apportion Michigan business income gains or losses. Use MI-1040H or MI-461, if applicable, as directed by the instructions.
- Leaving out gains or losses when electing a Section 271 adjustment. You must include all items of gain or loss realized during the tax year.
- Ignoring the form’s preparation directions. Type or print in blue or black ink and report amounts in whole dollars.
Questions people ask
Do I file MI-4797 by itself?
No. Include it with your MI-1040 or MI-1041, along with a copy of your U.S. Form 4797.
What goes in columns D and E on line 2?
Column D contains the corresponding federal gain or loss from U.S. Form 4797. Column E contains the gain or loss subject to Michigan income tax.
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 the property was acquired after the 15th, and exclude the last month if it was disposed of on or before the 15th.
What if I am a nonresident or part-year resident allocating capital gains or losses?
The instructions direct you to the instructions for Schedule NR, line 8. For individual returns, the form also directs nonresidents and part-year residents to carry the amount on line 18b to Schedule NR, line 8.