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093_HB3454
LRB093 05097 SJM 05157 b
1 AN ACT concerning taxes.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Income Tax Act is amended by
5 changing Section 203 as follows:
6 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
7 Sec. 203. Base income defined.
8 (a) Individuals.
9 (1) In general. In the case of an individual, base
10 income means an amount equal to the taxpayer's adjusted
11 gross income for the taxable year as modified by
12 paragraph (2).
13 (2) Modifications. The adjusted gross income
14 referred to in paragraph (1) shall be modified by adding
15 thereto the sum of the following amounts:
16 (A) An amount equal to all amounts paid or
17 accrued to the taxpayer as interest or dividends
18 during the taxable year to the extent excluded from
19 gross income in the computation of adjusted gross
20 income, except stock dividends of qualified public
21 utilities described in Section 305(e) of the
22 Internal Revenue Code;
23 (B) An amount equal to the amount of tax
24 imposed by this Act to the extent deducted from
25 gross income in the computation of adjusted gross
26 income for the taxable year;
27 (C) An amount equal to the amount received
28 during the taxable year as a recovery or refund of
29 real property taxes paid with respect to the
30 taxpayer's principal residence under the Revenue Act
31 of 1939 and for which a deduction was previously
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1 taken under subparagraph (L) of this paragraph (2)
2 prior to July 1, 1991, the retrospective application
3 date of Article 4 of Public Act 87-17. In the case
4 of multi-unit or multi-use structures and farm
5 dwellings, the taxes on the taxpayer's principal
6 residence shall be that portion of the total taxes
7 for the entire property which is attributable to
8 such principal residence;
9 (D) An amount equal to the amount of the
10 capital gain deduction allowable under the Internal
11 Revenue Code, to the extent deducted from gross
12 income in the computation of adjusted gross income;
13 (D-5) An amount, to the extent not included in
14 adjusted gross income, equal to the amount of money
15 withdrawn by the taxpayer in the taxable year from a
16 medical care savings account and the interest earned
17 on the account in the taxable year of a withdrawal
18 pursuant to subsection (b) of Section 20 of the
19 Medical Care Savings Account Act or subsection (b)
20 of Section 20 of the Medical Care Savings Account
21 Act of 2000;
22 (D-10) For taxable years ending after December
23 31, 1997, an amount equal to any eligible
24 remediation costs that the individual deducted in
25 computing adjusted gross income and for which the
26 individual claims a credit under subsection (l) of
27 Section 201;
28 (D-15) For taxable years 2001 and thereafter,
29 an amount equal to the bonus depreciation deduction
30 (30% of the adjusted basis of the qualified
31 property) taken on the taxpayer's federal income tax
32 return for the taxable year under subsection (k) of
33 Section 168 of the Internal Revenue Code; and
34 (D-16) If the taxpayer reports a capital gain
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1 or loss on the taxpayer's federal income tax return
2 for the taxable year based on a sale or transfer of
3 property for which the taxpayer was required in any
4 taxable year to make an addition modification under
5 subparagraph (D-15), then an amount equal to the
6 aggregate amount of the deductions taken in all
7 taxable years under subparagraph (Z) with respect to
8 that property.;
9 The taxpayer is required to make the addition
10 modification under this subparagraph only once with
11 respect to any one piece of property;. and
12 (D-20)(D-15) For taxable years beginning on
13 or after January 1, 2002, in the case of a
14 distribution from a qualified tuition program under
15 Section 529 of the Internal Revenue Code, other than
16 (i) a distribution from a College Savings Pool
17 created under Section 16.5 of the State Treasurer
18 Act or (ii) a distribution from the Illinois Prepaid
19 Tuition Trust Fund, an amount equal to the amount
20 excluded from gross income under Section
21 529(c)(3)(B);
22 and by deducting from the total so obtained the sum of
23 the following amounts:
24 (E) For taxable years ending before December
25 31, 2001, any amount included in such total in
26 respect of any compensation (including but not
27 limited to any compensation paid or accrued to a
28 serviceman while a prisoner of war or missing in
29 action) paid to a resident by reason of being on
30 active duty in the Armed Forces of the United States
31 and in respect of any compensation paid or accrued
32 to a resident who as a governmental employee was a
33 prisoner of war or missing in action, and in respect
34 of any compensation paid to a resident in 1971 or
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1 thereafter for annual training performed pursuant to
2 Sections 502 and 503, Title 32, United States Code
3 as a member of the Illinois National Guard. For
4 taxable years ending on or after December 31, 2001,
5 any amount included in such total in respect of any
6 compensation (including but not limited to any
7 compensation paid or accrued to a serviceman while a
8 prisoner of war or missing in action) paid to a
9 resident by reason of being a member of any
10 component of the Armed Forces of the United States
11 and in respect of any compensation paid or accrued
12 to a resident who as a governmental employee was a
13 prisoner of war or missing in action, and in respect
14 of any compensation paid to a resident in 2001 or
15 thereafter by reason of being a member of the
16 Illinois National Guard. The provisions of this
17 amendatory Act of the 92nd General Assembly are
18 exempt from the provisions of Section 250;
19 (F) An amount equal to all amounts included in
20 such total pursuant to the provisions of Sections
21 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
22 408 of the Internal Revenue Code, or included in
23 such total as distributions under the provisions of
24 any retirement or disability plan for employees of
25 any governmental agency or unit, or retirement
26 payments to retired partners, which payments are
27 excluded in computing net earnings from self
28 employment by Section 1402 of the Internal Revenue
29 Code and regulations adopted pursuant thereto;
30 (G) The valuation limitation amount;
31 (H) An amount equal to the amount of any tax
32 imposed by this Act which was refunded to the
33 taxpayer and included in such total for the taxable
34 year;
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1 (I) An amount equal to all amounts included in
2 such total pursuant to the provisions of Section 111
3 of the Internal Revenue Code as a recovery of items
4 previously deducted from adjusted gross income in
5 the computation of taxable income;
6 (J) An amount equal to those dividends
7 included in such total which were paid by a
8 corporation which conducts business operations in an
9 Enterprise Zone or zones created under the Illinois
10 Enterprise Zone Act, and conducts substantially all
11 of its operations in an Enterprise Zone or zones;
12 (K) An amount equal to those dividends
13 included in such total that were paid by a
14 corporation that conducts business operations in a
15 federally designated Foreign Trade Zone or Sub-Zone
16 and that is designated a High Impact Business
17 located in Illinois; provided that dividends
18 eligible for the deduction provided in subparagraph
19 (J) of paragraph (2) of this subsection shall not be
20 eligible for the deduction provided under this
21 subparagraph (K);
22 (L) For taxable years ending after December
23 31, 1983, an amount equal to all social security
24 benefits and railroad retirement benefits included
25 in such total pursuant to Sections 72(r) and 86 of
26 the Internal Revenue Code;
27 (M) With the exception of any amounts
28 subtracted under subparagraph (N), an amount equal
29 to the sum of all amounts disallowed as deductions
30 by (i) Sections 171(a) (2), and 265(2) of the
31 Internal Revenue Code of 1954, as now or hereafter
32 amended, and all amounts of expenses allocable to
33 interest and disallowed as deductions by Section
34 265(1) of the Internal Revenue Code of 1954, as now
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1 or hereafter amended; and (ii) for taxable years
2 ending on or after August 13, 1999, Sections
3 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
4 Internal Revenue Code; the provisions of this
5 subparagraph are exempt from the provisions of
6 Section 250;
7 (N) An amount equal to all amounts included in
8 such total which are exempt from taxation by this
9 State either by reason of its statutes or
10 Constitution or by reason of the Constitution,
11 treaties or statutes of the United States; provided
12 that, in the case of any statute of this State that
13 exempts income derived from bonds or other
14 obligations from the tax imposed under this Act, the
15 amount exempted shall be the interest net of bond
16 premium amortization;
17 (O) An amount equal to any contribution made
18 to a job training project established pursuant to
19 the Tax Increment Allocation Redevelopment Act;
20 (P) An amount equal to the amount of the
21 deduction used to compute the federal income tax
22 credit for restoration of substantial amounts held
23 under claim of right for the taxable year pursuant
24 to Section 1341 of the Internal Revenue Code of
25 1986;
26 (Q) An amount equal to any amounts included in
27 such total, received by the taxpayer as an
28 acceleration in the payment of life, endowment or
29 annuity benefits in advance of the time they would
30 otherwise be payable as an indemnity for a terminal
31 illness;
32 (R) An amount equal to the amount of any
33 federal or State bonus paid to veterans of the
34 Persian Gulf War;
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1 (S) An amount, to the extent included in
2 adjusted gross income, equal to the amount of a
3 contribution made in the taxable year on behalf of
4 the taxpayer to a medical care savings account
5 established under the Medical Care Savings Account
6 Act or the Medical Care Savings Account Act of 2000
7 to the extent the contribution is accepted by the
8 account administrator as provided in that Act;
9 (T) An amount, to the extent included in
10 adjusted gross income, equal to the amount of
11 interest earned in the taxable year on a medical
12 care savings account established under the Medical
13 Care Savings Account Act or the Medical Care Savings
14 Account Act of 2000 on behalf of the taxpayer, other
15 than interest added pursuant to item (D-5) of this
16 paragraph (2);
17 (U) For one taxable year beginning on or after
18 January 1, 1994, an amount equal to the total amount
19 of tax imposed and paid under subsections (a) and
20 (b) of Section 201 of this Act on grant amounts
21 received by the taxpayer under the Nursing Home
22 Grant Assistance Act during the taxpayer's taxable
23 years 1992 and 1993;
24 (V) Beginning with tax years ending on or
25 after December 31, 1995 and ending with tax years
26 ending on or before December 31, 2004, an amount
27 equal to the amount paid by a taxpayer who is a
28 self-employed taxpayer, a partner of a partnership,
29 or a shareholder in a Subchapter S corporation for
30 health insurance or long-term care insurance for
31 that taxpayer or that taxpayer's spouse or
32 dependents, to the extent that the amount paid for
33 that health insurance or long-term care insurance
34 may be deducted under Section 213 of the Internal
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1 Revenue Code of 1986, has not been deducted on the
2 federal income tax return of the taxpayer, and does
3 not exceed the taxable income attributable to that
4 taxpayer's income, self-employment income, or
5 Subchapter S corporation income; except that no
6 deduction shall be allowed under this item (V) if
7 the taxpayer is eligible to participate in any
8 health insurance or long-term care insurance plan of
9 an employer of the taxpayer or the taxpayer's
10 spouse. The amount of the health insurance and
11 long-term care insurance subtracted under this item
12 (V) shall be determined by multiplying total health
13 insurance and long-term care insurance premiums paid
14 by the taxpayer times a number that represents the
15 fractional percentage of eligible medical expenses
16 under Section 213 of the Internal Revenue Code of
17 1986 not actually deducted on the taxpayer's federal
18 income tax return;
19 (W) For taxable years beginning on or after
20 January 1, 1998, all amounts included in the
21 taxpayer's federal gross income in the taxable year
22 from amounts converted from a regular IRA to a Roth
23 IRA. This paragraph is exempt from the provisions of
24 Section 250;
25 (X) For taxable year 1999 and thereafter, an
26 amount equal to the amount of any (i) distributions,
27 to the extent includible in gross income for federal
28 income tax purposes, made to the taxpayer because of
29 his or her status as a victim of persecution for
30 racial or religious reasons by Nazi Germany or any
31 other Axis regime or as an heir of the victim and
32 (ii) items of income, to the extent includible in
33 gross income for federal income tax purposes,
34 attributable to, derived from or in any way related
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1 to assets stolen from, hidden from, or otherwise
2 lost to a victim of persecution for racial or
3 religious reasons by Nazi Germany or any other Axis
4 regime immediately prior to, during, and immediately
5 after World War II, including, but not limited to,
6 interest on the proceeds receivable as insurance
7 under policies issued to a victim of persecution for
8 racial or religious reasons by Nazi Germany or any
9 other Axis regime by European insurance companies
10 immediately prior to and during World War II;
11 provided, however, this subtraction from federal
12 adjusted gross income does not apply to assets
13 acquired with such assets or with the proceeds from
14 the sale of such assets; provided, further, this
15 paragraph shall only apply to a taxpayer who was the
16 first recipient of such assets after their recovery
17 and who is a victim of persecution for racial or
18 religious reasons by Nazi Germany or any other Axis
19 regime or as an heir of the victim. The amount of
20 and the eligibility for any public assistance,
21 benefit, or similar entitlement is not affected by
22 the inclusion of items (i) and (ii) of this
23 paragraph in gross income for federal income tax
24 purposes. This paragraph is exempt from the
25 provisions of Section 250;
26 (Y) For taxable years beginning on or after
27 January 1, 2002, moneys contributed in the taxable
28 year to a College Savings Pool account under Section
29 16.5 of the State Treasurer Act, except that amounts
30 excluded from gross income under Section
31 529(c)(3)(C)(i) of the Internal Revenue Code shall
32 not be considered moneys contributed under this
33 subparagraph (Y). This subparagraph (Y) is exempt
34 from the provisions of Section 250;
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1 (Z) For taxable years 2001 and thereafter, for
2 the taxable year in which the bonus depreciation
3 deduction (30% of the adjusted basis of the
4 qualified property) is taken on the taxpayer's
5 federal income tax return under subsection (k) of
6 Section 168 of the Internal Revenue Code and for
7 each applicable taxable year thereafter, an amount
8 equal to "x", where:
9 (1) "y" equals the amount of the
10 depreciation deduction taken for the taxable
11 year on the taxpayer's federal income tax
12 return on property for which the bonus
13 depreciation deduction (30% of the adjusted
14 basis of the qualified property) was taken in
15 any year under subsection (k) of Section 168 of
16 the Internal Revenue Code, but not including
17 the bonus depreciation deduction; and
18 (2) "x" equals "y" multiplied by 30 and
19 then divided by 70 (or "y" multiplied by
20 0.429).
21 The aggregate amount deducted under this
22 subparagraph in all taxable years for any one piece
23 of property may not exceed the amount of the bonus
24 depreciation deduction (30% of the adjusted basis of
25 the qualified property) taken on that property on
26 the taxpayer's federal income tax return under
27 subsection (k) of Section 168 of the Internal
28 Revenue Code; and
29 (AA) If the taxpayer reports a capital gain or
30 loss on the taxpayer's federal income tax return for
31 the taxable year based on a sale or transfer of
32 property for which the taxpayer was required in any
33 taxable year to make an addition modification under
34 subparagraph (D-15), then an amount equal to that
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1 addition modification.
2 The taxpayer is allowed to take the deduction
3 under this subparagraph only once with respect to
4 any one piece of property; and
5 (BB)(Z) Any amount included in adjusted gross
6 income, other than salary, received by a driver in a
7 ridesharing arrangement using a motor vehicle ; and
8 (CC) For taxable years ending on or after
9 December 31, 2003, any amount included in adjusted
10 gross income received by a teacher for work at a
11 qualifying school. For purposes of this
12 subparagraph, "teacher" means a person employed in
13 an instructional position at a qualifying school and
14 "qualifying school" means either (i) a nonprofit
15 elementary or secondary school in Illinois, other
16 than a public school, that is in compliance with
17 Title VI of the Civil Rights Act of 1964 and
18 attendance at which satisfies the requirements of
19 Section 26-1 of the School Code or (ii) a public
20 elementary or secondary school. This subparagraph is
21 exempt from the provisions of Section 250.
22 (b) Corporations.
23 (1) In general. In the case of a corporation, base
24 income means an amount equal to the taxpayer's taxable
25 income for the taxable year as modified by paragraph (2).
26 (2) Modifications. The taxable income referred to
27 in paragraph (1) shall be modified by adding thereto the
28 sum of the following amounts:
29 (A) An amount equal to all amounts paid or
30 accrued to the taxpayer as interest and all
31 distributions received from regulated investment
32 companies during the taxable year to the extent
33 excluded from gross income in the computation of
34 taxable income;
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1 (B) An amount equal to the amount of tax
2 imposed by this Act to the extent deducted from
3 gross income in the computation of taxable income
4 for the taxable year;
5 (C) In the case of a regulated investment
6 company, an amount equal to the excess of (i) the
7 net long-term capital gain for the taxable year,
8 over (ii) the amount of the capital gain dividends
9 designated as such in accordance with Section
10 852(b)(3)(C) of the Internal Revenue Code and any
11 amount designated under Section 852(b)(3)(D) of the
12 Internal Revenue Code, attributable to the taxable
13 year (this amendatory Act of 1995 (Public Act 89-89)
14 is declarative of existing law and is not a new
15 enactment);
16 (D) The amount of any net operating loss
17 deduction taken in arriving at taxable income, other
18 than a net operating loss carried forward from a
19 taxable year ending prior to December 31, 1986;
20 (E) For taxable years in which a net operating
21 loss carryback or carryforward from a taxable year
22 ending prior to December 31, 1986 is an element of
23 taxable income under paragraph (1) of subsection (e)
24 or subparagraph (E) of paragraph (2) of subsection
25 (e), the amount by which addition modifications
26 other than those provided by this subparagraph (E)
27 exceeded subtraction modifications in such earlier
28 taxable year, with the following limitations applied
29 in the order that they are listed:
30 (i) the addition modification relating to
31 the net operating loss carried back or forward
32 to the taxable year from any taxable year
33 ending prior to December 31, 1986 shall be
34 reduced by the amount of addition modification
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1 under this subparagraph (E) which related to
2 that net operating loss and which was taken
3 into account in calculating the base income of
4 an earlier taxable year, and
5 (ii) the addition modification relating
6 to the net operating loss carried back or
7 forward to the taxable year from any taxable
8 year ending prior to December 31, 1986 shall
9 not exceed the amount of such carryback or
10 carryforward;
11 For taxable years in which there is a net
12 operating loss carryback or carryforward from more
13 than one other taxable year ending prior to December
14 31, 1986, the addition modification provided in this
15 subparagraph (E) shall be the sum of the amounts
16 computed independently under the preceding
17 provisions of this subparagraph (E) for each such
18 taxable year;
19 (E-5) For taxable years ending after December
20 31, 1997, an amount equal to any eligible
21 remediation costs that the corporation deducted in
22 computing adjusted gross income and for which the
23 corporation claims a credit under subsection (l) of
24 Section 201;
25 (E-10) For taxable years 2001 and thereafter,
26 an amount equal to the bonus depreciation deduction
27 (30% of the adjusted basis of the qualified
28 property) taken on the taxpayer's federal income tax
29 return for the taxable year under subsection (k) of
30 Section 168 of the Internal Revenue Code; and
31 (E-11) If the taxpayer reports a capital gain
32 or loss on the taxpayer's federal income tax return
33 for the taxable year based on a sale or transfer of
34 property for which the taxpayer was required in any
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1 taxable year to make an addition modification under
2 subparagraph (E-10), then an amount equal to the
3 aggregate amount of the deductions taken in all
4 taxable years under subparagraph (T) with respect to
5 that property.;
6 The taxpayer is required to make the addition
7 modification under this subparagraph only once with
8 respect to any one piece of property;
9 and by deducting from the total so obtained the sum of
10 the following amounts:
11 (F) An amount equal to the amount of any tax
12 imposed by this Act which was refunded to the
13 taxpayer and included in such total for the taxable
14 year;
15 (G) An amount equal to any amount included in
16 such total under Section 78 of the Internal Revenue
17 Code;
18 (H) In the case of a regulated investment
19 company, an amount equal to the amount of exempt
20 interest dividends as defined in subsection (b) (5)
21 of Section 852 of the Internal Revenue Code, paid to
22 shareholders for the taxable year;
23 (I) With the exception of any amounts
24 subtracted under subparagraph (J), an amount equal
25 to the sum of all amounts disallowed as deductions
26 by (i) Sections 171(a) (2), and 265(a)(2) and
27 amounts disallowed as interest expense by Section
28 291(a)(3) of the Internal Revenue Code, as now or
29 hereafter amended, and all amounts of expenses
30 allocable to interest and disallowed as deductions
31 by Section 265(a)(1) of the Internal Revenue Code,
32 as now or hereafter amended; and (ii) for taxable
33 years ending on or after August 13, 1999, Sections
34 171(a)(2), 265, 280C, 291(a)(3), and 832(b)(5)(B)(i)
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1 of the Internal Revenue Code; the provisions of this
2 subparagraph are exempt from the provisions of
3 Section 250;
4 (J) An amount equal to all amounts included in
5 such total which are exempt from taxation by this
6 State either by reason of its statutes or
7 Constitution or by reason of the Constitution,
8 treaties or statutes of the United States; provided
9 that, in the case of any statute of this State that
10 exempts income derived from bonds or other
11 obligations from the tax imposed under this Act, the
12 amount exempted shall be the interest net of bond
13 premium amortization;
14 (K) An amount equal to those dividends
15 included in such total which were paid by a
16 corporation which conducts business operations in an
17 Enterprise Zone or zones created under the Illinois
18 Enterprise Zone Act and conducts substantially all
19 of its operations in an Enterprise Zone or zones;
20 (L) An amount equal to those dividends
21 included in such total that were paid by a
22 corporation that conducts business operations in a
23 federally designated Foreign Trade Zone or Sub-Zone
24 and that is designated a High Impact Business
25 located in Illinois; provided that dividends
26 eligible for the deduction provided in subparagraph
27 (K) of paragraph 2 of this subsection shall not be
28 eligible for the deduction provided under this
29 subparagraph (L);
30 (M) For any taxpayer that is a financial
31 organization within the meaning of Section 304(c) of
32 this Act, an amount included in such total as
33 interest income from a loan or loans made by such
34 taxpayer to a borrower, to the extent that such a
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1 loan is secured by property which is eligible for
2 the Enterprise Zone Investment Credit. To determine
3 the portion of a loan or loans that is secured by
4 property eligible for a Section 201(f) investment
5 credit to the borrower, the entire principal amount
6 of the loan or loans between the taxpayer and the
7 borrower should be divided into the basis of the
8 Section 201(f) investment credit property which
9 secures the loan or loans, using for this purpose
10 the original basis of such property on the date that
11 it was placed in service in the Enterprise Zone.
12 The subtraction modification available to taxpayer
13 in any year under this subsection shall be that
14 portion of the total interest paid by the borrower
15 with respect to such loan attributable to the
16 eligible property as calculated under the previous
17 sentence;
18 (M-1) For any taxpayer that is a financial
19 organization within the meaning of Section 304(c) of
20 this Act, an amount included in such total as
21 interest income from a loan or loans made by such
22 taxpayer to a borrower, to the extent that such a
23 loan is secured by property which is eligible for
24 the High Impact Business Investment Credit. To
25 determine the portion of a loan or loans that is
26 secured by property eligible for a Section 201(h)
27 investment credit to the borrower, the entire
28 principal amount of the loan or loans between the
29 taxpayer and the borrower should be divided into the
30 basis of the Section 201(h) investment credit
31 property which secures the loan or loans, using for
32 this purpose the original basis of such property on
33 the date that it was placed in service in a
34 federally designated Foreign Trade Zone or Sub-Zone
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1 located in Illinois. No taxpayer that is eligible
2 for the deduction provided in subparagraph (M) of
3 paragraph (2) of this subsection shall be eligible
4 for the deduction provided under this subparagraph
5 (M-1). The subtraction modification available to
6 taxpayers in any year under this subsection shall be
7 that portion of the total interest paid by the
8 borrower with respect to such loan attributable to
9 the eligible property as calculated under the
10 previous sentence;
11 (N) Two times any contribution made during the
12 taxable year to a designated zone organization to
13 the extent that the contribution (i) qualifies as a
14 charitable contribution under subsection (c) of
15 Section 170 of the Internal Revenue Code and (ii)
16 must, by its terms, be used for a project approved
17 by the Department of Commerce and Community Affairs
18 under Section 11 of the Illinois Enterprise Zone
19 Act;
20 (O) An amount equal to: (i) 85% for taxable
21 years ending on or before December 31, 1992, or, a
22 percentage equal to the percentage allowable under
23 Section 243(a)(1) of the Internal Revenue Code of
24 1986 for taxable years ending after December 31,
25 1992, of the amount by which dividends included in
26 taxable income and received from a corporation that
27 is not created or organized under the laws of the
28 United States or any state or political subdivision
29 thereof, including, for taxable years ending on or
30 after December 31, 1988, dividends received or
31 deemed received or paid or deemed paid under
32 Sections 951 through 964 of the Internal Revenue
33 Code, exceed the amount of the modification provided
34 under subparagraph (G) of paragraph (2) of this
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1 subsection (b) which is related to such dividends;
2 plus (ii) 100% of the amount by which dividends,
3 included in taxable income and received, including,
4 for taxable years ending on or after December 31,
5 1988, dividends received or deemed received or paid
6 or deemed paid under Sections 951 through 964 of the
7 Internal Revenue Code, from any such corporation
8 specified in clause (i) that would but for the
9 provisions of Section 1504 (b) (3) of the Internal
10 Revenue Code be treated as a member of the
11 affiliated group which includes the dividend
12 recipient, exceed the amount of the modification
13 provided under subparagraph (G) of paragraph (2) of
14 this subsection (b) which is related to such
15 dividends;
16 (P) An amount equal to any contribution made
17 to a job training project established pursuant to
18 the Tax Increment Allocation Redevelopment Act;
19 (Q) An amount equal to the amount of the
20 deduction used to compute the federal income tax
21 credit for restoration of substantial amounts held
22 under claim of right for the taxable year pursuant
23 to Section 1341 of the Internal Revenue Code of
24 1986;
25 (R) In the case of an attorney-in-fact with
26 respect to whom an interinsurer or a reciprocal
27 insurer has made the election under Section 835 of
28 the Internal Revenue Code, 26 U.S.C. 835, an amount
29 equal to the excess, if any, of the amounts paid or
30 incurred by that interinsurer or reciprocal insurer
31 in the taxable year to the attorney-in-fact over the
32 deduction allowed to that interinsurer or reciprocal
33 insurer with respect to the attorney-in-fact under
34 Section 835(b) of the Internal Revenue Code for the
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1 taxable year;
2 (S) For taxable years ending on or after
3 December 31, 1997, in the case of a Subchapter S
4 corporation, an amount equal to all amounts of
5 income allocable to a shareholder subject to the
6 Personal Property Tax Replacement Income Tax imposed
7 by subsections (c) and (d) of Section 201 of this
8 Act, including amounts allocable to organizations
9 exempt from federal income tax by reason of Section
10 501(a) of the Internal Revenue Code. This
11 subparagraph (S) is exempt from the provisions of
12 Section 250;
13 (T) For taxable years 2001 and thereafter, for
14 the taxable year in which the bonus depreciation
15 deduction (30% of the adjusted basis of the
16 qualified property) is taken on the taxpayer's
17 federal income tax return under subsection (k) of
18 Section 168 of the Internal Revenue Code and for
19 each applicable taxable year thereafter, an amount
20 equal to "x", where:
21 (1) "y" equals the amount of the
22 depreciation deduction taken for the taxable
23 year on the taxpayer's federal income tax
24 return on property for which the bonus
25 depreciation deduction (30% of the adjusted
26 basis of the qualified property) was taken in
27 any year under subsection (k) of Section 168 of
28 the Internal Revenue Code, but not including
29 the bonus depreciation deduction; and
30 (2) "x" equals "y" multiplied by 30 and
31 then divided by 70 (or "y" multiplied by
32 0.429).
33 The aggregate amount deducted under this
34 subparagraph in all taxable years for any one piece
-20- LRB093 05097 SJM 05157 b
1 of property may not exceed the amount of the bonus
2 depreciation deduction (30% of the adjusted basis of
3 the qualified property) taken on that property on
4 the taxpayer's federal income tax return under
5 subsection (k) of Section 168 of the Internal
6 Revenue Code; and
7 (U) If the taxpayer reports a capital gain or
8 loss on the taxpayer's federal income tax return for
9 the taxable year based on a sale or transfer of
10 property for which the taxpayer was required in any
11 taxable year to make an addition modification under
12 subparagraph (E-10), then an amount equal to that
13 addition modification.
14 The taxpayer is allowed to take the deduction
15 under this subparagraph only once with respect to
16 any one piece of property.
17 (3) Special rule. For purposes of paragraph (2)
18 (A), "gross income" in the case of a life insurance
19 company, for tax years ending on and after December 31,
20 1994, shall mean the gross investment income for the
21 taxable year.
22 (c) Trusts and estates.
23 (1) In general. In the case of a trust or estate,
24 base income means an amount equal to the taxpayer's
25 taxable income for the taxable year as modified by
26 paragraph (2).
27 (2) Modifications. Subject to the provisions of
28 paragraph (3), the taxable income referred to in
29 paragraph (1) shall be modified by adding thereto the sum
30 of the following amounts:
31 (A) An amount equal to all amounts paid or
32 accrued to the taxpayer as interest or dividends
33 during the taxable year to the extent excluded from
34 gross income in the computation of taxable income;
-21- LRB093 05097 SJM 05157 b
1 (B) In the case of (i) an estate, $600; (ii) a
2 trust which, under its governing instrument, is
3 required to distribute all of its income currently,
4 $300; and (iii) any other trust, $100, but in each
5 such case, only to the extent such amount was
6 deducted in the computation of taxable income;
7 (C) An amount equal to the amount of tax
8 imposed by this Act to the extent deducted from
9 gross income in the computation of taxable income
10 for the taxable year;
11 (D) The amount of any net operating loss
12 deduction taken in arriving at taxable income, other
13 than a net operating loss carried forward from a
14 taxable year ending prior to December 31, 1986;
15 (E) For taxable years in which a net operating
16 loss carryback or carryforward from a taxable year
17 ending prior to December 31, 1986 is an element of
18 taxable income under paragraph (1) of subsection (e)
19 or subparagraph (E) of paragraph (2) of subsection
20 (e), the amount by which addition modifications
21 other than those provided by this subparagraph (E)
22 exceeded subtraction modifications in such taxable
23 year, with the following limitations applied in the
24 order that they are listed:
25 (i) the addition modification relating to
26 the net operating loss carried back or forward
27 to the taxable year from any taxable year
28 ending prior to December 31, 1986 shall be
29 reduced by the amount of addition modification
30 under this subparagraph (E) which related to
31 that net operating loss and which was taken
32 into account in calculating the base income of
33 an earlier taxable year, and
34 (ii) the addition modification relating
-22- LRB093 05097 SJM 05157 b
1 to the net operating loss carried back or
2 forward to the taxable year from any taxable
3 year ending prior to December 31, 1986 shall
4 not exceed the amount of such carryback or
5 carryforward;
6 For taxable years in which there is a net
7 operating loss carryback or carryforward from more
8 than one other taxable year ending prior to December
9 31, 1986, the addition modification provided in this
10 subparagraph (E) shall be the sum of the amounts
11 computed independently under the preceding
12 provisions of this subparagraph (E) for each such
13 taxable year;
14 (F) For taxable years ending on or after
15 January 1, 1989, an amount equal to the tax deducted
16 pursuant to Section 164 of the Internal Revenue Code
17 if the trust or estate is claiming the same tax for
18 purposes of the Illinois foreign tax credit under
19 Section 601 of this Act;
20 (G) An amount equal to the amount of the
21 capital gain deduction allowable under the Internal
22 Revenue Code, to the extent deducted from gross
23 income in the computation of taxable income;
24 (G-5) For taxable years ending after December
25 31, 1997, an amount equal to any eligible
26 remediation costs that the trust or estate deducted
27 in computing adjusted gross income and for which the
28 trust or estate claims a credit under subsection (l)
29 of Section 201;
30 (G-10) For taxable years 2001 and thereafter,
31 an amount equal to the bonus depreciation deduction
32 (30% of the adjusted basis of the qualified
33 property) taken on the taxpayer's federal income tax
34 return for the taxable year under subsection (k) of
-23- LRB093 05097 SJM 05157 b
1 Section 168 of the Internal Revenue Code; and
2 (G-11) If the taxpayer reports a capital gain
3 or loss on the taxpayer's federal income tax return
4 for the taxable year based on a sale or transfer of
5 property for which the taxpayer was required in any
6 taxable year to make an addition modification under
7 subparagraph (G-10), then an amount equal to the
8 aggregate amount of the deductions taken in all
9 taxable years under subparagraph (R) with respect to
10 that property.;
11 The taxpayer is required to make the addition
12 modification under this subparagraph only once with
13 respect to any one piece of property;
14 and by deducting from the total so obtained the sum of
15 the following amounts:
16 (H) An amount equal to all amounts included in
17 such total pursuant to the provisions of Sections
18 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and
19 408 of the Internal Revenue Code or included in such
20 total as distributions under the provisions of any
21 retirement or disability plan for employees of any
22 governmental agency or unit, or retirement payments
23 to retired partners, which payments are excluded in
24 computing net earnings from self employment by
25 Section 1402 of the Internal Revenue Code and
26 regulations adopted pursuant thereto;
27 (I) The valuation limitation amount;
28 (J) An amount equal to the amount of any tax
29 imposed by this Act which was refunded to the
30 taxpayer and included in such total for the taxable
31 year;
32 (K) An amount equal to all amounts included in
33 taxable income as modified by subparagraphs (A),
34 (B), (C), (D), (E), (F) and (G) which are exempt
-24- LRB093 05097 SJM 05157 b
1 from taxation by this State either by reason of its
2 statutes or Constitution or by reason of the
3 Constitution, treaties or statutes of the United
4 States; provided that, in the case of any statute of
5 this State that exempts income derived from bonds or
6 other obligations from the tax imposed under this
7 Act, the amount exempted shall be the interest net
8 of bond premium amortization;
9 (L) With the exception of any amounts
10 subtracted under subparagraph (K), an amount equal
11 to the sum of all amounts disallowed as deductions
12 by (i) Sections 171(a) (2) and 265(a)(2) of the
13 Internal Revenue Code, as now or hereafter amended,
14 and all amounts of expenses allocable to interest
15 and disallowed as deductions by Section 265(1) of
16 the Internal Revenue Code of 1954, as now or
17 hereafter amended; and (ii) for taxable years ending
18 on or after August 13, 1999, Sections 171(a)(2),
19 265, 280C, and 832(b)(5)(B)(i) of the Internal
20 Revenue Code; the provisions of this subparagraph
21 are exempt from the provisions of Section 250;
22 (M) An amount equal to those dividends
23 included in such total which were paid by a
24 corporation which conducts business operations in an
25 Enterprise Zone or zones created under the Illinois
26 Enterprise Zone Act and conducts substantially all
27 of its operations in an Enterprise Zone or Zones;
28 (N) An amount equal to any contribution made
29 to a job training project established pursuant to
30 the Tax Increment Allocation Redevelopment Act;
31 (O) An amount equal to those dividends
32 included in such total that were paid by a
33 corporation that conducts business operations in a
34 federally designated Foreign Trade Zone or Sub-Zone
-25- LRB093 05097 SJM 05157 b
1 and that is designated a High Impact Business
2 located in Illinois; provided that dividends
3 eligible for the deduction provided in subparagraph
4 (M) of paragraph (2) of this subsection shall not be
5 eligible for the deduction provided under this
6 subparagraph (O);
7 (P) An amount equal to the amount of the
8 deduction used to compute the federal income tax
9 credit for restoration of substantial amounts held
10 under claim of right for the taxable year pursuant
11 to Section 1341 of the Internal Revenue Code of
12 1986;
13 (Q) For taxable year 1999 and thereafter, an
14 amount equal to the amount of any (i) distributions,
15 to the extent includible in gross income for federal
16 income tax purposes, made to the taxpayer because of
17 his or her status as a victim of persecution for
18 racial or religious reasons by Nazi Germany or any
19 other Axis regime or as an heir of the victim and
20 (ii) items of income, to the extent includible in
21 gross income for federal income tax purposes,
22 attributable to, derived from or in any way related
23 to assets stolen from, hidden from, or otherwise
24 lost to a victim of persecution for racial or
25 religious reasons by Nazi Germany or any other Axis
26 regime immediately prior to, during, and immediately
27 after World War II, including, but not limited to,
28 interest on the proceeds receivable as insurance
29 under policies issued to a victim of persecution for
30 racial or religious reasons by Nazi Germany or any
31 other Axis regime by European insurance companies
32 immediately prior to and during World War II;
33 provided, however, this subtraction from federal
34 adjusted gross income does not apply to assets
-26- LRB093 05097 SJM 05157 b
1 acquired with such assets or with the proceeds from
2 the sale of such assets; provided, further, this
3 paragraph shall only apply to a taxpayer who was the
4 first recipient of such assets after their recovery
5 and who is a victim of persecution for racial or
6 religious reasons by Nazi Germany or any other Axis
7 regime or as an heir of the victim. The amount of
8 and the eligibility for any public assistance,
9 benefit, or similar entitlement is not affected by
10 the inclusion of items (i) and (ii) of this
11 paragraph in gross income for federal income tax
12 purposes. This paragraph is exempt from the
13 provisions of Section 250;
14 (R) For taxable years 2001 and thereafter, for
15 the taxable year in which the bonus depreciation
16 deduction (30% of the adjusted basis of the
17 qualified property) is taken on the taxpayer's
18 federal income tax return under subsection (k) of
19 Section 168 of the Internal Revenue Code and for
20 each applicable taxable year thereafter, an amount
21 equal to "x", where:
22 (1) "y" equals the amount of the
23 depreciation deduction taken for the taxable
24 year on the taxpayer's federal income tax
25 return on property for which the bonus
26 depreciation deduction (30% of the adjusted
27 basis of the qualified property) was taken in
28 any year under subsection (k) of Section 168 of
29 the Internal Revenue Code, but not including
30 the bonus depreciation deduction; and
31 (2) "x" equals "y" multiplied by 30 and
32 then divided by 70 (or "y" multiplied by
33 0.429).
34 The aggregate amount deducted under this
-27- LRB093 05097 SJM 05157 b
1 subparagraph in all taxable years for any one piece
2 of property may not exceed the amount of the bonus
3 depreciation deduction (30% of the adjusted basis of
4 the qualified property) taken on that property on
5 the taxpayer's federal income tax return under
6 subsection (k) of Section 168 of the Internal
7 Revenue Code; and
8 (S) If the taxpayer reports a capital gain or
9 loss on the taxpayer's federal income tax return for
10 the taxable year based on a sale or transfer of
11 property for which the taxpayer was required in any
12 taxable year to make an addition modification under
13 subparagraph (G-10), then an amount equal to that
14 addition modification.
15 The taxpayer is allowed to take the deduction
16 under this subparagraph only once with respect to
17 any one piece of property.
18 (3) Limitation. The amount of any modification
19 otherwise required under this subsection shall, under
20 regulations prescribed by the Department, be adjusted by
21 any amounts included therein which were properly paid,
22 credited, or required to be distributed, or permanently
23 set aside for charitable purposes pursuant to Internal
24 Revenue Code Section 642(c) during the taxable year.
25 (d) Partnerships.
26 (1) In general. In the case of a partnership, base
27 income means an amount equal to the taxpayer's taxable
28 income for the taxable year as modified by paragraph (2).
29 (2) Modifications. The taxable income referred to
30 in paragraph (1) shall be modified by adding thereto the
31 sum of the following amounts:
32 (A) An amount equal to all amounts paid or
33 accrued to the taxpayer as interest or dividends
34 during the taxable year to the extent excluded from
-28- LRB093 05097 SJM 05157 b
1 gross income in the computation of taxable income;
2 (B) An amount equal to the amount of tax
3 imposed by this Act to the extent deducted from
4 gross income for the taxable year;
5 (C) The amount of deductions allowed to the
6 partnership pursuant to Section 707 (c) of the
7 Internal Revenue Code in calculating its taxable
8 income;
9 (D) An amount equal to the amount of the
10 capital gain deduction allowable under the Internal
11 Revenue Code, to the extent deducted from gross
12 income in the computation of taxable income;
13 (D-5) For taxable years 2001 and thereafter,
14 an amount equal to the bonus depreciation deduction
15 (30% of the adjusted basis of the qualified
16 property) taken on the taxpayer's federal income tax
17 return for the taxable year under subsection (k) of
18 Section 168 of the Internal Revenue Code; and
19 (D-6) If the taxpayer reports a capital gain
20 or loss on the taxpayer's federal income tax return
21 for the taxable year based on a sale or transfer of
22 property for which the taxpayer was required in any
23 taxable year to make an addition modification under
24 subparagraph (D-5), then an amount equal to the
25 aggregate amount of the deductions taken in all
26 taxable years under subparagraph (O) with respect to
27 that property.;
28 The taxpayer is required to make the addition
29 modification under this subparagraph only once with
30 respect to any one piece of property;
31 and by deducting from the total so obtained the following
32 amounts:
33 (E) The valuation limitation amount;
34 (F) An amount equal to the amount of any tax
-29- LRB093 05097 SJM 05157 b
1 imposed by this Act which was refunded to the
2 taxpayer and included in such total for the taxable
3 year;
4 (G) An amount equal to all amounts included in
5 taxable income as modified by subparagraphs (A),
6 (B), (C) and (D) which are exempt from taxation by
7 this State either by reason of its statutes or
8 Constitution or by reason of the Constitution,
9 treaties or statutes of the United States; provided
10 that, in the case of any statute of this State that
11 exempts income derived from bonds or other
12 obligations from the tax imposed under this Act, the
13 amount exempted shall be the interest net of bond
14 premium amortization;
15 (H) Any income of the partnership which
16 constitutes personal service income as defined in
17 Section 1348 (b) (1) of the Internal Revenue Code
18 (as in effect December 31, 1981) or a reasonable
19 allowance for compensation paid or accrued for
20 services rendered by partners to the partnership,
21 whichever is greater;
22 (I) An amount equal to all amounts of income
23 distributable to an entity subject to the Personal
24 Property Tax Replacement Income Tax imposed by
25 subsections (c) and (d) of Section 201 of this Act
26 including amounts distributable to organizations
27 exempt from federal income tax by reason of Section
28 501(a) of the Internal Revenue Code;
29 (J) With the exception of any amounts
30 subtracted under subparagraph (G), an amount equal
31 to the sum of all amounts disallowed as deductions
32 by (i) Sections 171(a) (2), and 265(2) of the
33 Internal Revenue Code of 1954, as now or hereafter
34 amended, and all amounts of expenses allocable to
-30- LRB093 05097 SJM 05157 b
1 interest and disallowed as deductions by Section
2 265(1) of the Internal Revenue Code, as now or
3 hereafter amended; and (ii) for taxable years ending
4 on or after August 13, 1999, Sections 171(a)(2),
5 265, 280C, and 832(b)(5)(B)(i) of the Internal
6 Revenue Code; the provisions of this subparagraph
7 are exempt from the provisions of Section 250;
8 (K) An amount equal to those dividends
9 included in such total which were paid by a
10 corporation which conducts business operations in an
11 Enterprise Zone or zones created under the Illinois
12 Enterprise Zone Act, enacted by the 82nd General
13 Assembly, and conducts substantially all of its
14 operations in an Enterprise Zone or Zones;
15 (L) An amount equal to any contribution made
16 to a job training project established pursuant to
17 the Real Property Tax Increment Allocation
18 Redevelopment Act;
19 (M) An amount equal to those dividends
20 included in such total that were paid by a
21 corporation that conducts business operations in a
22 federally designated Foreign Trade Zone or Sub-Zone
23 and that is designated a High Impact Business
24 located in Illinois; provided that dividends
25 eligible for the deduction provided in subparagraph
26 (K) of paragraph (2) of this subsection shall not be
27 eligible for the deduction provided under this
28 subparagraph (M);
29 (N) An amount equal to the amount of the
30 deduction used to compute the federal income tax
31 credit for restoration of substantial amounts held
32 under claim of right for the taxable year pursuant
33 to Section 1341 of the Internal Revenue Code of
34 1986;
-31- LRB093 05097 SJM 05157 b
1 (O) For taxable years 2001 and thereafter, for
2 the taxable year in which the bonus depreciation
3 deduction (30% of the adjusted basis of the
4 qualified property) is taken on the taxpayer's
5 federal income tax return under subsection (k) of
6 Section 168 of the Internal Revenue Code and for
7 each applicable taxable year thereafter, an amount
8 equal to "x", where:
9 (1) "y" equals the amount of the
10 depreciation deduction taken for the taxable
11 year on the taxpayer's federal income tax
12 return on property for which the bonus
13 depreciation deduction (30% of the adjusted
14 basis of the qualified property) was taken in
15 any year under subsection (k) of Section 168 of
16 the Internal Revenue Code, but not including
17 the bonus depreciation deduction; and
18 (2) "x" equals "y" multiplied by 30 and
19 then divided by 70 (or "y" multiplied by
20 0.429).
21 The aggregate amount deducted under this
22 subparagraph in all taxable years for any one piece
23 of property may not exceed the amount of the bonus
24 depreciation deduction (30% of the adjusted basis of
25 the qualified property) taken on that property on
26 the taxpayer's federal income tax return under
27 subsection (k) of Section 168 of the Internal
28 Revenue Code; and
29 (P) If the taxpayer reports a capital gain or
30 loss on the taxpayer's federal income tax return for
31 the taxable year based on a sale or transfer of
32 property for which the taxpayer was required in any
33 taxable year to make an addition modification under
34 subparagraph (D-5), then an amount equal to that
-32- LRB093 05097 SJM 05157 b
1 addition modification.
2 The taxpayer is allowed to take the deduction
3 under this subparagraph only once with respect to
4 any one piece of property.
5 (e) Gross income; adjusted gross income; taxable income.
6 (1) In general. Subject to the provisions of
7 paragraph (2) and subsection (b) (3), for purposes of
8 this Section and Section 803(e), a taxpayer's gross
9 income, adjusted gross income, or taxable income for the
10 taxable year shall mean the amount of gross income,
11 adjusted gross income or taxable income properly
12 reportable for federal income tax purposes for the
13 taxable year under the provisions of the Internal Revenue
14 Code. Taxable income may be less than zero. However, for
15 taxable years ending on or after December 31, 1986, net
16 operating loss carryforwards from taxable years ending
17 prior to December 31, 1986, may not exceed the sum of
18 federal taxable income for the taxable year before net
19 operating loss deduction, plus the excess of addition
20 modifications over subtraction modifications for the
21 taxable year. For taxable years ending prior to December
22 31, 1986, taxable income may never be an amount in excess
23 of the net operating loss for the taxable year as defined
24 in subsections (c) and (d) of Section 172 of the Internal
25 Revenue Code, provided that when taxable income of a
26 corporation (other than a Subchapter S corporation),
27 trust, or estate is less than zero and addition
28 modifications, other than those provided by subparagraph
29 (E) of paragraph (2) of subsection (b) for corporations
30 or subparagraph (E) of paragraph (2) of subsection (c)
31 for trusts and estates, exceed subtraction modifications,
32 an addition modification must be made under those
33 subparagraphs for any other taxable year to which the
34 taxable income less than zero (net operating loss) is
-33- LRB093 05097 SJM 05157 b
1 applied under Section 172 of the Internal Revenue Code or
2 under subparagraph (E) of paragraph (2) of this
3 subsection (e) applied in conjunction with Section 172 of
4 the Internal Revenue Code.
5 (2) Special rule. For purposes of paragraph (1) of
6 this subsection, the taxable income properly reportable
7 for federal income tax purposes shall mean:
8 (A) Certain life insurance companies. In the
9 case of a life insurance company subject to the tax
10 imposed by Section 801 of the Internal Revenue Code,
11 life insurance company taxable income, plus the
12 amount of distribution from pre-1984 policyholder
13 surplus accounts as calculated under Section 815a of
14 the Internal Revenue Code;
15 (B) Certain other insurance companies. In the
16 case of mutual insurance companies subject to the
17 tax imposed by Section 831 of the Internal Revenue
18 Code, insurance company taxable income;
19 (C) Regulated investment companies. In the
20 case of a regulated investment company subject to
21 the tax imposed by Section 852 of the Internal
22 Revenue Code, investment company taxable income;
23 (D) Real estate investment trusts. In the
24 case of a real estate investment trust subject to
25 the tax imposed by Section 857 of the Internal
26 Revenue Code, real estate investment trust taxable
27 income;
28 (E) Consolidated corporations. In the case of
29 a corporation which is a member of an affiliated
30 group of corporations filing a consolidated income
31 tax return for the taxable year for federal income
32 tax purposes, taxable income determined as if such
33 corporation had filed a separate return for federal
34 income tax purposes for the taxable year and each
-34- LRB093 05097 SJM 05157 b
1 preceding taxable year for which it was a member of
2 an affiliated group. For purposes of this
3 subparagraph, the taxpayer's separate taxable income
4 shall be determined as if the election provided by
5 Section 243(b) (2) of the Internal Revenue Code had
6 been in effect for all such years;
7 (F) Cooperatives. In the case of a
8 cooperative corporation or association, the taxable
9 income of such organization determined in accordance
10 with the provisions of Section 1381 through 1388 of
11 the Internal Revenue Code;
12 (G) Subchapter S corporations. In the case
13 of: (i) a Subchapter S corporation for which there
14 is in effect an election for the taxable year under
15 Section 1362 of the Internal Revenue Code, the
16 taxable income of such corporation determined in
17 accordance with Section 1363(b) of the Internal
18 Revenue Code, except that taxable income shall take
19 into account those items which are required by
20 Section 1363(b)(1) of the Internal Revenue Code to
21 be separately stated; and (ii) a Subchapter S
22 corporation for which there is in effect a federal
23 election to opt out of the provisions of the
24 Subchapter S Revision Act of 1982 and have applied
25 instead the prior federal Subchapter S rules as in
26 effect on July 1, 1982, the taxable income of such
27 corporation determined in accordance with the
28 federal Subchapter S rules as in effect on July 1,
29 1982; and
30 (H) Partnerships. In the case of a
31 partnership, taxable income determined in accordance
32 with Section 703 of the Internal Revenue Code,
33 except that taxable income shall take into account
34 those items which are required by Section 703(a)(1)
-35- LRB093 05097 SJM 05157 b
1 to be separately stated but which would be taken
2 into account by an individual in calculating his
3 taxable income.
4 (f) Valuation limitation amount.
5 (1) In general. The valuation limitation amount
6 referred to in subsections (a) (2) (G), (c) (2) (I) and
7 (d)(2) (E) is an amount equal to:
8 (A) The sum of the pre-August 1, 1969
9 appreciation amounts (to the extent consisting of
10 gain reportable under the provisions of Section 1245
11 or 1250 of the Internal Revenue Code) for all
12 property in respect of which such gain was reported
13 for the taxable year; plus
14 (B) The lesser of (i) the sum of the
15 pre-August 1, 1969 appreciation amounts (to the
16 extent consisting of capital gain) for all property
17 in respect of which such gain was reported for
18 federal income tax purposes for the taxable year, or
19 (ii) the net capital gain for the taxable year,
20 reduced in either case by any amount of such gain
21 included in the amount determined under subsection
22 (a) (2) (F) or (c) (2) (H).
23 (2) Pre-August 1, 1969 appreciation amount.
24 (A) If the fair market value of property
25 referred to in paragraph (1) was readily
26 ascertainable on August 1, 1969, the pre-August 1,
27 1969 appreciation amount for such property is the
28 lesser of (i) the excess of such fair market value
29 over the taxpayer's basis (for determining gain) for
30 such property on that date (determined under the
31 Internal Revenue Code as in effect on that date), or
32 (ii) the total gain realized and reportable for
33 federal income tax purposes in respect of the sale,
34 exchange or other disposition of such property.
-36- LRB093 05097 SJM 05157 b
1 (B) If the fair market value of property
2 referred to in paragraph (1) was not readily
3 ascertainable on August 1, 1969, the pre-August 1,
4 1969 appreciation amount for such property is that
5 amount which bears the same ratio to the total gain
6 reported in respect of the property for federal
7 income tax purposes for the taxable year, as the
8 number of full calendar months in that part of the
9 taxpayer's holding period for the property ending
10 July 31, 1969 bears to the number of full calendar
11 months in the taxpayer's entire holding period for
12 the property.
13 (C) The Department shall prescribe such
14 regulations as may be necessary to carry out the
15 purposes of this paragraph.
16 (g) Double deductions. Unless specifically provided
17 otherwise, nothing in this Section shall permit the same item
18 to be deducted more than once.
19 (h) Legislative intention. Except as expressly provided
20 by this Section there shall be no modifications or
21 limitations on the amounts of income, gain, loss or deduction
22 taken into account in determining gross income, adjusted
23 gross income or taxable income for federal income tax
24 purposes for the taxable year, or in the amount of such items
25 entering into the computation of base income and net income
26 under this Act for such taxable year, whether in respect of
27 property values as of August 1, 1969 or otherwise.
28 (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99;
29 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676, eff.
30 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01; 92-16,
31 eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff. 8-17-01;
32 92-603, eff. 6-28-02; 92-626, eff. 7-11-02; 92-651, eff.
33 7-11-02; 92-846, eff. 8-23-02; revised 11-15-02.)
-37- LRB093 05097 SJM 05157 b
1 Section 99. Effective date. This Act takes effect upon
2 becoming law.
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