Section 206.8. Losses on sale or exchange of United States obligations; reporting.

Losses on the sale or exchange of United States obligations, the income of which the state is prohibited from taxing, shall be subtracted from federal adjusted gross income. To do this, file form  MI-1040D  and enter a zero in column "Z" of the line on which the loss is reported.

(a)   Example:

Mr. Smith is reporting a gain from the sale of stock in the amount of $2,100.00 and a loss from the                             sale of United States obligations in the amount of $900.00

(b)   These transactions are reported on form MI-1040D as follows:

Michigan Gain

Co. Z

Federal

Date                    Date                 Gain

Acquired              Sold                Col. Y

6. Stock                                                                   9-30-68          10-1-77       $2,100.00

$2,100.00

U.S. Obligation                                                     4-1-69            7-10-77          (900.00)

- 0 -

7.  Capital gain distribution

8.  Enter gain if applicable from form MI-4797 line 4(a)(1)

9.  Enter your share of net ling-term gain or (loss) from partnerships and fiduciaries

10.  Enter  your  share  of  net  long-term gain  from small business corporations (subchapter S)

11.  Net gain or (loss) combine  lines

6 through 19                                                                                                      $1,200.00

$2,100.00

12.   Long-term capital loss carryover attributable to                                              (        ) (        )

years beginning after 1969

13.  Net long term gain of (loss)  combine  lines 11  and  12                            $1,200.00

$2,100.00

14.  Combine the amounts shown on line 5 and 13                                           $1,200.00

$2,100.00

and enter the net gain (loss) here

15.  If line 14 shows a gain -

(a)   Enter 50% of line 13 or 50% of line 14, whichever

is smaller.  Enter zero if there is a loss or no entry on line 13                              $600.00

$1,050.00

(b)   Subtract line 15(a) from line 14. Enter

here and carry amount in column Y to MI-1040 line 39(a)

carry amount in column Z to MI-1040 line 32(a)                                                $600.00

$1,050.00

History: 1979 AC.