HB6806 Engrossed LRB093 20530 SJM 46335 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 paragraph
12 (2).
13         (2) Modifications. The adjusted gross income referred
14 to in paragraph (1) shall be modified by adding thereto the
15 sum of the following amounts:
16             (A) An amount equal to all amounts paid or accrued
17 to the taxpayer as interest or dividends during the
18 taxable year to the extent excluded from gross income
19 in the computation of adjusted gross income, except
20 stock dividends of qualified public utilities
21 described in Section 305(e) of the Internal Revenue
22 Code;
23             (B) An amount equal to the amount of tax imposed by
24 this Act to the extent deducted from gross income in
25 the computation of adjusted gross income for the
26 taxable year;
27             (C) An amount equal to the amount received during
28 the taxable year as a recovery or refund of real
29 property taxes paid with respect to the taxpayer's
30 principal residence under the Revenue Act of 1939 and
31 for which a deduction was previously taken under
32 subparagraph (L) of this paragraph (2) prior to July 1,

 

 

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1 1991, the retrospective application date of Article 4
2 of Public Act 87-17. In the case of multi-unit or
3 multi-use structures and farm dwellings, the taxes on
4 the taxpayer's principal residence shall be that
5 portion of the total taxes for the entire property
6 which is attributable to such principal residence;
7             (D) An amount equal to the amount of the capital
8 gain deduction allowable under the Internal Revenue
9 Code, to the extent deducted from gross income in the
10 computation of adjusted gross income;
11             (D-5) An amount, to the extent not included in
12 adjusted gross income, equal to the amount of money
13 withdrawn by the taxpayer in the taxable year from a
14 medical care savings account and the interest earned on
15 the account in the taxable year of a withdrawal
16 pursuant to subsection (b) of Section 20 of the Medical
17 Care Savings Account Act or subsection (b) of Section
18 20 of the Medical Care Savings Account Act of 2000;
19             (D-10) For taxable years ending after December 31,
20 1997, an amount equal to any eligible remediation costs
21 that the individual deducted in computing adjusted
22 gross income and for which the individual claims a
23 credit under subsection (l) of Section 201;
24             (D-15) For taxable years 2001 and thereafter, an
25 amount equal to the bonus depreciation deduction (30%
26 of the adjusted basis of the qualified property) taken
27 on the taxpayer's federal income tax return for the
28 taxable year under subsection (k) of Section 168 of the
29 Internal Revenue Code; and
30             (D-16) If the taxpayer reports a capital gain or
31 loss on the taxpayer's federal income tax return for
32 the taxable year based on a sale or transfer of
33 property for which the taxpayer was required in any
34 taxable year to make an addition modification under
35 subparagraph (D-15), then an amount equal to the
36 aggregate amount of the deductions taken in all taxable

 

 

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1 years under subparagraph (Z) with respect to that
2 property. ;
3             The taxpayer is required to make the addition
4 modification under this subparagraph only once with
5 respect to any one piece of property; . and
6             (D-20) (D-15) For taxable years beginning on or
7 after January 1, 2002, in the case of a distribution
8 from a qualified tuition program under Section 529 of
9 the Internal Revenue Code, other than (i) a
10 distribution from a College Savings Pool created under
11 Section 16.5 of the State Treasurer Act or (ii) a
12 distribution from the Illinois Prepaid Tuition Trust
13 Fund, an amount equal to the amount excluded from gross
14 income under Section 529(c)(3)(B);
15     and by deducting from the total so obtained the sum of the
16 following amounts:
17             (E) For taxable years ending before December 31,
18 2001, any amount included in such total in respect of
19 any compensation (including but not limited to any
20 compensation paid or accrued to a serviceman while a
21 prisoner of war or missing in action) paid to a
22 resident by reason of being on active duty in the Armed
23 Forces of the United States and in respect of any
24 compensation paid or accrued to a resident who as a
25 governmental employee was a prisoner of war or missing
26 in action, and in respect of any compensation paid to a
27 resident in 1971 or thereafter for annual training
28 performed pursuant to Sections 502 and 503, Title 32,
29 United States Code as a member of the Illinois National
30 Guard. For taxable years ending on or after December
31 31, 2001, any amount included in such total in respect
32 of any compensation (including but not limited to any
33 compensation paid or accrued to a serviceman while a
34 prisoner of war or missing in action) paid to a
35 resident by reason of being a member of any component
36 of the Armed Forces of the United States and in respect

 

 

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1 of any compensation paid or accrued to a resident who
2 as a governmental employee was a prisoner of war or
3 missing in action, and in respect of any compensation
4 paid to a resident in 2001 or thereafter by reason of
5 being a member of the Illinois National Guard. The
6 provisions of this amendatory Act of the 92nd General
7 Assembly are exempt from the provisions of Section 250;
8             (F) An amount equal to all amounts included in such
9 total pursuant to the provisions of Sections 402(a),
10 402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
11 Internal Revenue Code, or included in such total as
12 distributions under the provisions of any retirement
13 or disability plan for employees of any governmental
14 agency or unit, or retirement payments to retired
15 partners, which payments are excluded in computing net
16 earnings from self employment by Section 1402 of the
17 Internal Revenue Code and regulations adopted pursuant
18 thereto;
19             (G) The valuation limitation amount;
20             (H) An amount equal to the amount of any tax
21 imposed by this Act which was refunded to the taxpayer
22 and included in such total for the taxable year;
23             (I) An amount equal to all amounts included in such
24 total pursuant to the provisions of Section 111 of the
25 Internal Revenue Code as a recovery of items previously
26 deducted from adjusted gross income in the computation
27 of taxable income;
28             (J) An amount equal to those dividends included in
29 such total which were paid by a corporation which
30 conducts business operations in an Enterprise Zone or
31 zones created under the Illinois Enterprise Zone Act,
32 and conducts substantially all of its operations in an
33 Enterprise Zone or zones;
34             (K) An amount equal to those dividends included in
35 such total that were paid by a corporation that
36 conducts business operations in a federally designated

 

 

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1 Foreign Trade Zone or Sub-Zone and that is designated a
2 High Impact Business located in Illinois; provided
3 that dividends eligible for the deduction provided in
4 subparagraph (J) of paragraph (2) of this subsection
5 shall not be eligible for the deduction provided under
6 this subparagraph (K);
7             (L) For taxable years ending after December 31,
8 1983, an amount equal to all social security benefits
9 and railroad retirement benefits included in such
10 total pursuant to Sections 72(r) and 86 of the Internal
11 Revenue Code;
12             (M) With the exception of any amounts subtracted
13 under subparagraph (N), an amount equal to the sum of
14 all amounts disallowed as deductions by (i) Sections
15 171(a) (2), and 265(2) of the Internal Revenue Code of
16 1954, as now or hereafter amended, and all amounts of
17 expenses allocable to interest and disallowed as
18 deductions by Section 265(1) of the Internal Revenue
19 Code of 1954, as now or hereafter amended; and (ii) for
20 taxable years ending on or after August 13, 1999,
21 Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
22 the Internal Revenue Code; the provisions of this
23 subparagraph are exempt from the provisions of Section
24 250;
25             (N) An amount equal to all amounts included in such
26 total which are exempt from taxation by this State
27 either by reason of its statutes or Constitution or by
28 reason of the Constitution, treaties or statutes of the
29 United States; provided that, in the case of any
30 statute of this State that exempts income derived from
31 bonds or other obligations from the tax imposed under
32 this Act, the amount exempted shall be the interest net
33 of bond premium amortization;
34             (O) An amount equal to any contribution made to a
35 job training project established pursuant to the Tax
36 Increment Allocation Redevelopment Act;

 

 

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1             (P) An amount equal to the amount of the deduction
2 used to compute the federal income tax credit for
3 restoration of substantial amounts held under claim of
4 right for the taxable year pursuant to Section 1341 of
5 the Internal Revenue Code of 1986;
6             (Q) An amount equal to any amounts included in such
7 total, received by the taxpayer as an acceleration in
8 the payment of life, endowment or annuity benefits in
9 advance of the time they would otherwise be payable as
10 an indemnity for a terminal illness;
11             (R) An amount equal to the amount of any federal or
12 State bonus paid to veterans of the Persian Gulf War;
13             (S) An amount, to the extent included in adjusted
14 gross income, equal to the amount of a contribution
15 made in the taxable year on behalf of the taxpayer to a
16 medical care savings account established under the
17 Medical Care Savings Account Act or the Medical Care
18 Savings Account Act of 2000 to the extent the
19 contribution is accepted by the account administrator
20 as provided in that Act;
21             (T) An amount, to the extent included in adjusted
22 gross income, equal to the amount of interest earned in
23 the taxable year on a medical care savings account
24 established under the Medical Care Savings Account Act
25 or the Medical Care Savings Account Act of 2000 on
26 behalf of the taxpayer, other than interest added
27 pursuant to item (D-5) of this paragraph (2);
28             (U) For one taxable year beginning on or after
29 January 1, 1994, an amount equal to the total amount of
30 tax imposed and paid under subsections (a) and (b) of
31 Section 201 of this Act on grant amounts received by
32 the taxpayer under the Nursing Home Grant Assistance
33 Act during the taxpayer's taxable years 1992 and 1993;
34             (V) Beginning with tax years ending on or after
35 December 31, 1995 and ending with tax years ending on
36 or before December 31, 2004, an amount equal to the

 

 

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1 amount paid by a taxpayer who is a self-employed
2 taxpayer, a partner of a partnership, or a shareholder
3 in a Subchapter S corporation for health insurance or
4 long-term care insurance for that taxpayer or that
5 taxpayer's spouse or dependents, to the extent that the
6 amount paid for that health insurance or long-term care
7 insurance may be deducted under Section 213 of the
8 Internal Revenue Code of 1986, has not been deducted on
9 the federal income tax return of the taxpayer, and does
10 not exceed the taxable income attributable to that
11 taxpayer's income, self-employment income, or
12 Subchapter S corporation income; except that no
13 deduction shall be allowed under this item (V) if the
14 taxpayer is eligible to participate in any health
15 insurance or long-term care insurance plan of an
16 employer of the taxpayer or the taxpayer's spouse. The
17 amount of the health insurance and long-term care
18 insurance subtracted under this item (V) shall be
19 determined by multiplying total health insurance and
20 long-term care insurance premiums paid by the taxpayer
21 times a number that represents the fractional
22 percentage of eligible medical expenses under Section
23 213 of the Internal Revenue Code of 1986 not actually
24 deducted on the taxpayer's federal income tax return;
25             (W) For taxable years beginning on or after January
26 1, 1998, all amounts included in the taxpayer's federal
27 gross income in the taxable year from amounts converted
28 from a regular IRA to a Roth IRA. This paragraph is
29 exempt from the provisions of Section 250;
30             (X) For taxable year 1999 and thereafter, an amount
31 equal to the amount of any (i) distributions, to the
32 extent includible in gross income for federal income
33 tax purposes, made to the taxpayer because of his or
34 her status as a victim of persecution for racial or
35 religious reasons by Nazi Germany or any other Axis
36 regime or as an heir of the victim and (ii) items of

 

 

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1 income, to the extent includible in gross income for
2 federal income tax purposes, attributable to, derived
3 from or in any way related to assets stolen from,
4 hidden from, or otherwise lost to a victim of
5 persecution for racial or religious reasons by Nazi
6 Germany or any other Axis regime immediately prior to,
7 during, and immediately after World War II, including,
8 but not limited to, interest on the proceeds receivable
9 as insurance under policies issued to a victim of
10 persecution for racial or religious reasons by Nazi
11 Germany or any other Axis regime by European insurance
12 companies immediately prior to and during World War II;
13 provided, however, this subtraction from federal
14 adjusted gross income does not apply to assets acquired
15 with such assets or with the proceeds from the sale of
16 such assets; provided, further, this paragraph shall
17 only apply to a taxpayer who was the first recipient of
18 such assets after their recovery and who is a victim of
19 persecution for racial or religious reasons by Nazi
20 Germany or any other Axis regime or as an heir of the
21 victim. The amount of and the eligibility for any
22 public assistance, benefit, or similar entitlement is
23 not affected by the inclusion of items (i) and (ii) of
24 this paragraph in gross income for federal income tax
25 purposes. This paragraph is exempt from the provisions
26 of Section 250;
27             (Y) For taxable years beginning on or after January
28 1, 2002, moneys contributed in the taxable year to a
29 College Savings Pool account under Section 16.5 of the
30 State Treasurer Act, except that amounts excluded from
31 gross income under Section 529(c)(3)(C)(i) of the
32 Internal Revenue Code shall not be considered moneys
33 contributed under this subparagraph (Y). This
34 subparagraph (Y) is exempt from the provisions of
35 Section 250;
36             (Z) For taxable years 2001 and thereafter, for the

 

 

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1 taxable year in which the bonus depreciation deduction
2 (30% of the adjusted basis of the qualified property)
3 is taken on the taxpayer's federal income tax return
4 under subsection (k) of Section 168 of the Internal
5 Revenue Code and for each applicable taxable year
6 thereafter, an amount equal to "x", where:
7                 (1) "y" equals the amount of the depreciation
8 deduction taken for the taxable year on the
9 taxpayer's federal income tax return on property
10 for which the bonus depreciation deduction (30% of
11 the adjusted basis of the qualified property) was
12 taken in any year under subsection (k) of Section
13 168 of the Internal Revenue Code, but not including
14 the bonus depreciation deduction; and
15                 (2) "x" equals "y" multiplied by 30 and then
16 divided by 70 (or "y" multiplied by 0.429).
17             The aggregate amount deducted under this
18 subparagraph in all taxable years for any one piece of
19 property may not exceed the amount of the bonus
20 depreciation deduction (30% of the adjusted basis of
21 the qualified property) taken on that property on the
22 taxpayer's federal income tax return under subsection
23 (k) of Section 168 of the Internal Revenue Code; and
24             (AA) If the taxpayer reports a capital gain or loss
25 on the taxpayer's federal income tax return for the
26 taxable year based on a sale or transfer of property
27 for which the taxpayer was required in any taxable year
28 to make an addition modification under subparagraph
29 (D-15), then an amount equal to that addition
30 modification.
31             The taxpayer is allowed to take the deduction under
32 this subparagraph only once with respect to any one
33 piece of property; and
34             (BB) (Z) Any amount included in adjusted gross
35 income, other than salary, received by a driver in a
36 ridesharing arrangement using a motor vehicle; and .

 

 

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1             (CC) For taxable years ending on or after December
2 31, 2004, subject to the conditions in this
3 subparagraph, up to $10,000, if the taxpayer, while
4 living, donates one or more of his or her human organs
5 to another human being for human organ
6 transplantation. A deduction that is claimed under
7 this subparagraph may be claimed for the taxable year
8 in which the human organ transplantation occurs. An
9 individual may claim the deduction under this
10 subparagraph only once, and the deduction may be
11 claimed for only the following unreimbursed expenses
12 that are incurred by the claimant and related to the
13 claimant's organ donation:
14                 (I) travel expenses;
15                 (II) lodging expenses; and
16                 (III) lost wages.
17         The deduction under this subparagraph may not be
18 claimed by a part-year resident or a nonresident of
19 this State. As used in this subparagraph, "human organ"
20 means all or part of a liver, pancreas, kidney,
21 intestine, lung, or bone marrow, and "human organ
22 transplantation" means the medical procedure by which
23 transfer of a human organ is made from the body of a
24 person to the body of another person. This subparagraph
25 is exempt from the provisions of Section 250 of the
26 Act.
 
27     (b) Corporations.
28         (1) In general. In the case of a corporation, base
29 income means an amount equal to the taxpayer's taxable
30 income for the taxable year as modified by paragraph (2).
31         (2) Modifications. The taxable income referred to in
32 paragraph (1) shall be modified by adding thereto the sum
33 of the following amounts:
34             (A) An amount equal to all amounts paid or accrued
35 to the taxpayer as interest and all distributions

 

 

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1 received from regulated investment companies during
2 the taxable year to the extent excluded from gross
3 income in the computation of taxable income;
4             (B) An amount equal to the amount of tax imposed by
5 this Act to the extent deducted from gross income in
6 the computation of taxable income for the taxable year;
7             (C) In the case of a regulated investment company,
8 an amount equal to the excess of (i) the net long-term
9 capital gain for the taxable year, over (ii) the amount
10 of the capital gain dividends designated as such in
11 accordance with Section 852(b)(3)(C) of the Internal
12 Revenue Code and any amount designated under Section
13 852(b)(3)(D) of the Internal Revenue Code,
14 attributable to the taxable year (this amendatory Act
15 of 1995 (Public Act 89-89) is declarative of existing
16 law and is not a new enactment);
17             (D) The amount of any net operating loss deduction
18 taken in arriving at taxable income, other than a net
19 operating loss carried forward from a taxable year
20 ending prior to December 31, 1986;
21             (E) For taxable years in which a net operating loss
22 carryback or carryforward from a taxable year ending
23 prior to December 31, 1986 is an element of taxable
24 income under paragraph (1) of subsection (e) or
25 subparagraph (E) of paragraph (2) of subsection (e),
26 the amount by which addition modifications other than
27 those provided by this subparagraph (E) exceeded
28 subtraction modifications in such earlier taxable
29 year, with the following limitations applied in the
30 order that they are listed:
31                 (i) the addition modification relating to the
32 net operating loss carried back or forward to the
33 taxable year from any taxable year ending prior to
34 December 31, 1986 shall be reduced by the amount of
35 addition modification under this subparagraph (E)
36 which related to that net operating loss and which

 

 

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1 was taken into account in calculating the base
2 income of an earlier taxable year, and
3                 (ii) the addition modification relating to the
4 net operating loss carried back or forward to the
5 taxable year from any taxable year ending prior to
6 December 31, 1986 shall not exceed the amount of
7 such carryback or carryforward;
8             For taxable years in which there is a net operating
9 loss carryback or carryforward from more than one other
10 taxable year ending prior to December 31, 1986, the
11 addition modification provided in this subparagraph
12 (E) shall be the sum of the amounts computed
13 independently under the preceding provisions of this
14 subparagraph (E) for each such taxable year;
15             (E-5) For taxable years ending after December 31,
16 1997, an amount equal to any eligible remediation costs
17 that the corporation deducted in computing adjusted
18 gross income and for which the corporation claims a
19 credit under subsection (l) of Section 201;
20             (E-10) For taxable years 2001 and thereafter, an
21 amount equal to the bonus depreciation deduction (30%
22 of the adjusted basis of the qualified property) taken
23 on the taxpayer's federal income tax return for the
24 taxable year under subsection (k) of Section 168 of the
25 Internal Revenue Code; and
26             (E-11) If the taxpayer reports a capital gain or
27 loss on the taxpayer's federal income tax return for
28 the taxable year based on a sale or transfer of
29 property for which the taxpayer was required in any
30 taxable year to make an addition modification under
31 subparagraph (E-10), then an amount equal to the
32 aggregate amount of the deductions taken in all taxable
33 years under subparagraph (T) with respect to that
34 property. ;
35             The taxpayer is required to make the addition
36 modification under this subparagraph only once with

 

 

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1 respect to any one piece of property;
2     and by deducting from the total so obtained the sum of the
3 following amounts:
4             (F) An amount equal to the amount of any tax
5 imposed by this Act which was refunded to the taxpayer
6 and included in such total for the taxable year;
7             (G) An amount equal to any amount included in such
8 total under Section 78 of the Internal Revenue Code;
9             (H) In the case of a regulated investment company,
10 an amount equal to the amount of exempt interest
11 dividends as defined in subsection (b) (5) of Section
12 852 of the Internal Revenue Code, paid to shareholders
13 for the taxable year;
14             (I) With the exception of any amounts subtracted
15 under subparagraph (J), an amount equal to the sum of
16 all amounts disallowed as deductions by (i) Sections
17 171(a) (2), and 265(a)(2) and amounts disallowed as
18 interest expense by Section 291(a)(3) of the Internal
19 Revenue Code, as now or hereafter amended, and all
20 amounts of expenses allocable to interest and
21 disallowed as deductions by Section 265(a)(1) of the
22 Internal Revenue Code, as now or hereafter amended; and
23 (ii) for taxable years ending on or after August 13,
24 1999, Sections 171(a)(2), 265, 280C, 291(a)(3), and
25 832(b)(5)(B)(i) of the Internal Revenue Code; the
26 provisions of this subparagraph are exempt from the
27 provisions of Section 250;
28             (J) An amount equal to all amounts included in such
29 total which are exempt from taxation by this State
30 either by reason of its statutes or Constitution or by
31 reason of the Constitution, treaties or statutes of the
32 United States; provided that, in the case of any
33 statute of this State that exempts income derived from
34 bonds or other obligations from the tax imposed under
35 this Act, the amount exempted shall be the interest net
36 of bond premium amortization;

 

 

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1             (K) An amount equal to those dividends included in
2 such total which were paid by a corporation which
3 conducts business operations in an Enterprise Zone or
4 zones created under the Illinois Enterprise Zone Act
5 and conducts substantially all of its operations in an
6 Enterprise Zone or zones;
7             (L) An amount equal to those dividends included in
8 such total that were paid by a corporation that
9 conducts business operations in a federally designated
10 Foreign Trade Zone or Sub-Zone and that is designated a
11 High Impact Business located in Illinois; provided
12 that dividends eligible for the deduction provided in
13 subparagraph (K) of paragraph 2 of this subsection
14 shall not be eligible for the deduction provided under
15 this subparagraph (L);
16             (M) For any taxpayer that is a financial
17 organization within the meaning of Section 304(c) of
18 this Act, an amount included in such total as interest
19 income from a loan or loans made by such taxpayer to a
20 borrower, to the extent that such a loan is secured by
21 property which is eligible for the Enterprise Zone
22 Investment Credit. To determine the portion of a loan
23 or loans that is secured by property eligible for a
24 Section 201(f) investment credit to the borrower, the
25 entire principal amount of the loan or loans between
26 the taxpayer and the borrower should be divided into
27 the basis of the Section 201(f) investment credit
28 property which secures the loan or loans, using for
29 this purpose the original basis of such property on the
30 date that it was placed in service in the Enterprise
31 Zone. The subtraction modification available to
32 taxpayer in any year under this subsection shall be
33 that portion of the total interest paid by the borrower
34 with respect to such loan attributable to the eligible
35 property as calculated under the previous sentence;
36             (M-1) For any taxpayer that is a financial

 

 

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1 organization within the meaning of Section 304(c) of
2 this Act, an amount included in such total as interest
3 income from a loan or loans made by such taxpayer to a
4 borrower, to the extent that such a loan is secured by
5 property which is eligible for the High Impact Business
6 Investment Credit. To determine the portion of a loan
7 or loans that is secured by property eligible for a
8 Section 201(h) investment credit to the borrower, the
9 entire principal amount of the loan or loans between
10 the taxpayer and the borrower should be divided into
11 the basis of the Section 201(h) investment credit
12 property which secures the loan or loans, using for
13 this purpose the original basis of such property on the
14 date that it was placed in service in a federally
15 designated Foreign Trade Zone or Sub-Zone located in
16 Illinois. No taxpayer that is eligible for the
17 deduction provided in subparagraph (M) of paragraph
18 (2) of this subsection shall be eligible for the
19 deduction provided under this subparagraph (M-1). The
20 subtraction modification available to taxpayers in any
21 year under this subsection shall be that portion of the
22 total interest paid by the borrower with respect to
23 such loan attributable to the eligible property as
24 calculated under the previous sentence;
25             (N) Two times any contribution made during the
26 taxable year to a designated zone organization to the
27 extent that the contribution (i) qualifies as a
28 charitable contribution under subsection (c) of
29 Section 170 of the Internal Revenue Code and (ii) must,
30 by its terms, be used for a project approved by the
31 Department of Commerce and Economic Opportunity
32 Community Affairs under Section 11 of the Illinois
33 Enterprise Zone Act;
34             (O) An amount equal to: (i) 85% for taxable years
35 ending on or before December 31, 1992, or, a percentage
36 equal to the percentage allowable under Section

 

 

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1 243(a)(1) of the Internal Revenue Code of 1986 for
2 taxable years ending after December 31, 1992, of the
3 amount by which dividends included in taxable income
4 and received from a corporation that is not created or
5 organized under the laws of the United States or any
6 state or political subdivision thereof, including, for
7 taxable years ending on or after December 31, 1988,
8 dividends received or deemed received or paid or deemed
9 paid under Sections 951 through 964 of the Internal
10 Revenue Code, exceed the amount of the modification
11 provided under subparagraph (G) of paragraph (2) of
12 this subsection (b) which is related to such dividends;
13 plus (ii) 100% of the amount by which dividends,
14 included in taxable income and received, including,
15 for taxable years ending on or after December 31, 1988,
16 dividends received or deemed received or paid or deemed
17 paid under Sections 951 through 964 of the Internal
18 Revenue Code, from any such corporation specified in
19 clause (i) that would but for the provisions of Section
20 1504 (b) (3) of the Internal Revenue Code be treated as
21 a member of the affiliated group which includes the
22 dividend recipient, exceed the amount of the
23 modification provided under subparagraph (G) of
24 paragraph (2) of this subsection (b) which is related
25 to such dividends;
26             (P) An amount equal to any contribution made to a
27 job training project established pursuant to the Tax
28 Increment Allocation Redevelopment Act;
29             (Q) An amount equal to the amount of the deduction
30 used to compute the federal income tax credit for
31 restoration of substantial amounts held under claim of
32 right for the taxable year pursuant to Section 1341 of
33 the Internal Revenue Code of 1986;
34             (R) In the case of an attorney-in-fact with respect
35 to whom an interinsurer or a reciprocal insurer has
36 made the election under Section 835 of the Internal

 

 

HB6806 Engrossed - 17 - LRB093 20530 SJM 46335 b

1 Revenue Code, 26 U.S.C. 835, an amount equal to the
2 excess, if any, of the amounts paid or incurred by that
3 interinsurer or reciprocal insurer in the taxable year
4 to the attorney-in-fact over the deduction allowed to
5 that interinsurer or reciprocal insurer with respect
6 to the attorney-in-fact under Section 835(b) of the
7 Internal Revenue Code for the taxable year;
8             (S) For taxable years ending on or after December
9 31, 1997, in the case of a Subchapter S corporation, an
10 amount equal to all amounts of income allocable to a
11 shareholder subject to the Personal Property Tax
12 Replacement Income Tax imposed by subsections (c) and
13 (d) of Section 201 of this Act, including amounts
14 allocable to organizations exempt from federal income
15 tax by reason of Section 501(a) of the Internal Revenue
16 Code. This subparagraph (S) is exempt from the
17 provisions of Section 250;
18             (T) For taxable years 2001 and thereafter, for the
19 taxable year in which the bonus depreciation deduction
20 (30% of the adjusted basis of the qualified property)
21 is taken on the taxpayer's federal income tax return
22 under subsection (k) of Section 168 of the Internal
23 Revenue Code and for each applicable taxable year
24 thereafter, an amount equal to "x", where:
25                 (1) "y" equals the amount of the depreciation
26 deduction taken for the taxable year on the
27 taxpayer's federal income tax return on property
28 for which the bonus depreciation deduction (30% of
29 the adjusted basis of the qualified property) was
30 taken in any year under subsection (k) of Section
31 168 of the Internal Revenue Code, but not including
32 the bonus depreciation deduction; and
33                 (2) "x" equals "y" multiplied by 30 and then
34 divided by 70 (or "y" multiplied by 0.429).
35             The aggregate amount deducted under this
36 subparagraph in all taxable years for any one piece of

 

 

HB6806 Engrossed - 18 - LRB093 20530 SJM 46335 b

1 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 the
4 taxpayer's federal income tax return under subsection
5 (k) of Section 168 of the Internal Revenue Code; and
6             (U) If the taxpayer reports a capital gain or loss
7 on the taxpayer's federal income tax return for the
8 taxable year based on a sale or transfer of property
9 for which the taxpayer was required in any taxable year
10 to make an addition modification under subparagraph
11 (E-10), then an amount equal to that addition
12 modification.
13             The taxpayer is allowed to take the deduction under
14 this subparagraph only once with respect to any one
15 piece of property.
16         (3) Special rule. For purposes of paragraph (2) (A),
17 "gross income" in the case of a life insurance company, for
18 tax years ending on and after December 31, 1994, shall mean
19 the gross investment income for the taxable year.
 
20     (c) Trusts and estates.
21         (1) In general. In the case of a trust or estate, base
22 income means an amount equal to the taxpayer's taxable
23 income for the taxable year as modified by paragraph (2).
24         (2) Modifications. Subject to the provisions of
25 paragraph (3), the taxable income referred to in paragraph
26 (1) shall be modified by adding thereto the sum of the
27 following amounts:
28             (A) An amount equal to all amounts paid or accrued
29 to the taxpayer as interest or dividends during the
30 taxable year to the extent excluded from gross income
31 in the computation of taxable income;
32             (B) In the case of (i) an estate, $600; (ii) a
33 trust which, under its governing instrument, is
34 required to distribute all of its income currently,
35 $300; and (iii) any other trust, $100, but in each such

 

 

HB6806 Engrossed - 19 - LRB093 20530 SJM 46335 b

1 case, only to the extent such amount was deducted in
2 the computation of taxable income;
3             (C) An amount equal to the amount of tax imposed by
4 this Act to the extent deducted from gross income in
5 the computation of taxable income for the taxable year;
6             (D) The amount of any net operating loss deduction
7 taken in arriving at taxable income, other than a net
8 operating loss carried forward from a taxable year
9 ending prior to December 31, 1986;
10             (E) For taxable years in which a net operating loss
11 carryback or carryforward from a taxable year ending
12 prior to December 31, 1986 is an element of taxable
13 income under paragraph (1) of subsection (e) or
14 subparagraph (E) of paragraph (2) of subsection (e),
15 the amount by which addition modifications other than
16 those provided by this subparagraph (E) exceeded
17 subtraction modifications in such taxable year, with
18 the following limitations applied in the order that
19 they are listed:
20                 (i) the addition modification relating to the
21 net operating loss carried back or forward to the
22 taxable year from any taxable year ending prior to
23 December 31, 1986 shall be reduced by the amount of
24 addition modification under this subparagraph (E)
25 which related to that net operating loss and which
26 was taken into account in calculating the base
27 income of an earlier taxable year, and
28                 (ii) the addition modification relating to the
29 net operating loss carried back or forward to the
30 taxable year from any taxable year ending prior to
31 December 31, 1986 shall not exceed the amount of
32 such carryback or carryforward;
33             For taxable years in which there is a net operating
34 loss carryback or carryforward from more than one other
35 taxable year ending prior to December 31, 1986, the
36 addition modification provided in this subparagraph

 

 

HB6806 Engrossed - 20 - LRB093 20530 SJM 46335 b

1 (E) shall be the sum of the amounts computed
2 independently under the preceding provisions of this
3 subparagraph (E) for each such taxable year;
4             (F) For taxable years ending on or after January 1,
5 1989, an amount equal to the tax deducted pursuant to
6 Section 164 of the Internal Revenue Code if the trust
7 or estate is claiming the same tax for purposes of the
8 Illinois foreign tax credit under Section 601 of this
9 Act;
10             (G) An amount equal to the amount of the capital
11 gain deduction allowable under the Internal Revenue
12 Code, to the extent deducted from gross income in the
13 computation of taxable income;
14             (G-5) For taxable years ending after December 31,
15 1997, an amount equal to any eligible remediation costs
16 that the trust or estate deducted in computing adjusted
17 gross income and for which the trust or estate claims a
18 credit under subsection (l) of Section 201;
19             (G-10) For taxable years 2001 and thereafter, an
20 amount equal to the bonus depreciation deduction (30%
21 of the adjusted basis of the qualified property) taken
22 on the taxpayer's federal income tax return for the
23 taxable year under subsection (k) of Section 168 of the
24 Internal Revenue Code; and
25             (G-11) If the taxpayer reports a capital gain or
26 loss on the taxpayer's federal income tax return for
27 the taxable year based on a sale or transfer of
28 property for which the taxpayer was required in any
29 taxable year to make an addition modification under
30 subparagraph (G-10), then an amount equal to the
31 aggregate amount of the deductions taken in all taxable
32 years under subparagraph (R) with respect to that
33 property. ;
34             The taxpayer is required to make the addition
35 modification under this subparagraph only once with
36 respect to any one piece of property;

 

 

HB6806 Engrossed - 21 - LRB093 20530 SJM 46335 b

1     and by deducting from the total so obtained the sum of the
2 following amounts:
3             (H) An amount equal to all amounts included in such
4 total pursuant to the provisions of Sections 402(a),
5 402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
6 Internal Revenue Code or included in such total as
7 distributions under the provisions of any retirement
8 or disability plan for employees of any governmental
9 agency or unit, or retirement payments to retired
10 partners, which payments are excluded in computing net
11 earnings from self employment by Section 1402 of the
12 Internal Revenue Code and regulations adopted pursuant
13 thereto;
14             (I) The valuation limitation amount;
15             (J) An amount equal to the amount of any tax
16 imposed by this Act which was refunded to the taxpayer
17 and included in such total for the taxable year;
18             (K) An amount equal to all amounts included in
19 taxable income as modified by subparagraphs (A), (B),
20 (C), (D), (E), (F) and (G) which are exempt from
21 taxation by this State either by reason of its statutes
22 or Constitution or by reason of the Constitution,
23 treaties or statutes of the United States; provided
24 that, in the case of any statute of this State that
25 exempts income derived from bonds or other obligations
26 from the tax imposed under this Act, the amount
27 exempted shall be the interest net of bond premium
28 amortization;
29             (L) With the exception of any amounts subtracted
30 under subparagraph (K), an amount equal to the sum of
31 all amounts disallowed as deductions by (i) Sections
32 171(a) (2) and 265(a)(2) of the Internal Revenue Code,
33 as now or hereafter amended, and all amounts of
34 expenses allocable to interest and disallowed as
35 deductions by Section 265(1) of the Internal Revenue
36 Code of 1954, as now or hereafter amended; and (ii) for

 

 

HB6806 Engrossed - 22 - LRB093 20530 SJM 46335 b

1 taxable years ending on or after August 13, 1999,
2 Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
3 the Internal Revenue Code; the provisions of this
4 subparagraph are exempt from the provisions of Section
5 250;
6             (M) An amount equal to those dividends included in
7 such total which were paid by a corporation which
8 conducts business operations in an Enterprise Zone or
9 zones created under the Illinois Enterprise Zone Act
10 and conducts substantially all of its operations in an
11 Enterprise Zone or Zones;
12             (N) An amount equal to any contribution made to a
13 job training project established pursuant to the Tax
14 Increment Allocation Redevelopment Act;
15             (O) An amount equal to those dividends included in
16 such total that were paid by a corporation that
17 conducts business operations in a federally designated
18 Foreign Trade Zone or Sub-Zone and that is designated a
19 High Impact Business located in Illinois; provided
20 that dividends eligible for the deduction provided in
21 subparagraph (M) of paragraph (2) of this subsection
22 shall not be eligible for the deduction provided under
23 this subparagraph (O);
24             (P) An amount equal to the amount of the deduction
25 used to compute the federal income tax credit for
26 restoration of substantial amounts held under claim of
27 right for the taxable year pursuant to Section 1341 of
28 the Internal Revenue Code of 1986;
29             (Q) For taxable year 1999 and thereafter, an amount
30 equal to the amount of any (i) distributions, to the
31 extent includible in gross income for federal income
32 tax purposes, made to the taxpayer because of his or
33 her status as a victim of persecution for racial or
34 religious reasons by Nazi Germany or any other Axis
35 regime or as an heir of the victim and (ii) items of
36 income, to the extent includible in gross income for

 

 

HB6806 Engrossed - 23 - LRB093 20530 SJM 46335 b

1 federal income tax purposes, attributable to, derived
2 from or in any way related to assets stolen from,
3 hidden from, or otherwise lost to a victim of
4 persecution for racial or religious reasons by Nazi
5 Germany or any other Axis regime immediately prior to,
6 during, and immediately after World War II, including,
7 but not limited to, interest on the proceeds receivable
8 as insurance under policies issued to a victim of
9 persecution for racial or religious reasons by Nazi
10 Germany or any other Axis regime by European insurance
11 companies immediately prior to and during World War II;
12 provided, however, this subtraction from federal
13 adjusted gross income does not apply to assets acquired
14 with such assets or with the proceeds from the sale of
15 such assets; provided, further, this paragraph shall
16 only apply to a taxpayer who was the first recipient of
17 such assets after their recovery and who is a victim of
18 persecution for racial or religious reasons by Nazi
19 Germany or any other Axis regime or as an heir of the
20 victim. The amount of and the eligibility for any
21 public assistance, benefit, or similar entitlement is
22 not affected by the inclusion of items (i) and (ii) of
23 this paragraph in gross income for federal income tax
24 purposes. This paragraph is exempt from the provisions
25 of Section 250;
26             (R) For taxable years 2001 and thereafter, for the
27 taxable year in which the bonus depreciation deduction
28 (30% of the adjusted basis of the qualified property)
29 is taken on the taxpayer's federal income tax return
30 under subsection (k) of Section 168 of the Internal
31 Revenue Code and for each applicable taxable year
32 thereafter, an amount equal to "x", where:
33                 (1) "y" equals the amount of the depreciation
34 deduction taken for the taxable year on the
35 taxpayer's federal income tax return on property
36 for which the bonus depreciation deduction (30% of

 

 

HB6806 Engrossed - 24 - LRB093 20530 SJM 46335 b

1 the adjusted basis of the qualified property) was
2 taken in any year under subsection (k) of Section
3 168 of the Internal Revenue Code, but not including
4 the bonus depreciation deduction; and
5                 (2) "x" equals "y" multiplied by 30 and then
6 divided by 70 (or "y" multiplied by 0.429).
7             The aggregate amount deducted under this
8 subparagraph in all taxable years for any one piece of
9 property may not exceed the amount of the bonus
10 depreciation deduction (30% of the adjusted basis of
11 the qualified property) taken on that property on the
12 taxpayer's federal income tax return under subsection
13 (k) of Section 168 of the Internal Revenue Code; and
14             (S) If the taxpayer reports a capital gain or loss
15 on the taxpayer's federal income tax return for the
16 taxable year based on a sale or transfer of property
17 for which the taxpayer was required in any taxable year
18 to make an addition modification under subparagraph
19 (G-10), then an amount equal to that addition
20 modification.
21             The taxpayer is allowed to take the deduction under
22 this subparagraph only once with respect to any one
23 piece of property.
24         (3) Limitation. The amount of any modification
25 otherwise required under this subsection shall, under
26 regulations prescribed by the Department, be adjusted by
27 any amounts included therein which were properly paid,
28 credited, or required to be distributed, or permanently set
29 aside for charitable purposes pursuant to Internal Revenue
30 Code Section 642(c) during the taxable year.
 
31     (d) Partnerships.
32         (1) In general. In the case of a partnership, base
33 income means an amount equal to the taxpayer's taxable
34 income for the taxable year as modified by paragraph (2).
35         (2) Modifications. The taxable income referred to in

 

 

HB6806 Engrossed - 25 - LRB093 20530 SJM 46335 b

1 paragraph (1) shall be modified by adding thereto the sum
2 of the following amounts:
3             (A) An amount equal to all amounts paid or accrued
4 to the taxpayer as interest or dividends during the
5 taxable year to the extent excluded from gross income
6 in the computation of taxable income;
7             (B) An amount equal to the amount of tax imposed by
8 this Act to the extent deducted from gross income for
9 the taxable year;
10             (C) The amount of deductions allowed to the
11 partnership pursuant to Section 707 (c) of the Internal
12 Revenue Code in calculating its taxable income;
13             (D) An amount equal to the amount of the capital
14 gain deduction allowable under the Internal Revenue
15 Code, to the extent deducted from gross income in the
16 computation of taxable income;
17             (D-5) For taxable years 2001 and thereafter, an
18 amount equal to the bonus depreciation deduction (30%
19 of the adjusted basis of the qualified property) taken
20 on the taxpayer's federal income tax return for the
21 taxable year under subsection (k) of Section 168 of the
22 Internal Revenue Code; and
23             (D-6) If the taxpayer reports a capital gain or
24 loss on the taxpayer's federal income tax return for
25 the taxable year based on a sale or transfer of
26 property for which the taxpayer was required in any
27 taxable year to make an addition modification under
28 subparagraph (D-5), then an amount equal to the
29 aggregate amount of the deductions taken in all taxable
30 years under subparagraph (O) with respect to that
31 property. ;
32             The taxpayer is required to make the addition
33 modification under this subparagraph only once with
34 respect to any one piece of property;
35     and by deducting from the total so obtained the following
36 amounts:

 

 

HB6806 Engrossed - 26 - LRB093 20530 SJM 46335 b

1             (E) The valuation limitation amount;
2             (F) An amount equal to the amount of any tax
3 imposed by this Act which was refunded to the taxpayer
4 and included in such total for the taxable year;
5             (G) An amount equal to all amounts included in
6 taxable income as modified by subparagraphs (A), (B),
7 (C) and (D) which are exempt from taxation by this
8 State either by reason of its statutes or Constitution
9 or by reason of the Constitution, treaties or statutes
10 of the United States; provided that, in the case of any
11 statute of this State that exempts income derived from
12 bonds or other obligations from the tax imposed under
13 this Act, the amount exempted shall be the interest net
14 of bond 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 (as
18 in effect December 31, 1981) or a reasonable allowance
19 for compensation paid or accrued for services rendered
20 by partners to the partnership, whichever is greater;
21             (I) An amount equal to all amounts of income
22 distributable to an entity subject to the Personal
23 Property Tax Replacement Income Tax imposed by
24 subsections (c) and (d) of Section 201 of this Act
25 including amounts distributable to organizations
26 exempt from federal income tax by reason of Section
27 501(a) of the Internal Revenue Code;
28             (J) With the exception of any amounts subtracted
29 under subparagraph (G), an amount equal to the sum of
30 all amounts disallowed as deductions by (i) Sections
31 171(a) (2), and 265(2) of the Internal Revenue Code of
32 1954, as now or hereafter amended, and all amounts of
33 expenses allocable to interest and disallowed as
34 deductions by Section 265(1) of the Internal Revenue
35 Code, as now or hereafter amended; and (ii) for taxable
36 years ending on or after August 13, 1999, Sections

 

 

HB6806 Engrossed - 27 - LRB093 20530 SJM 46335 b

1 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
2 Internal Revenue Code; the provisions of this
3 subparagraph are exempt from the provisions of Section
4 250;
5             (K) An amount equal to those dividends included in
6 such total which were paid by a corporation which
7 conducts business operations in an Enterprise Zone or
8 zones created under the Illinois Enterprise Zone Act,
9 enacted by the 82nd General Assembly, and conducts
10 substantially all of its operations in an Enterprise
11 Zone or Zones;
12             (L) An amount equal to any contribution made to a
13 job training project established pursuant to the Real
14 Property Tax Increment Allocation Redevelopment Act;
15             (M) An amount equal to those dividends included in
16 such total that were paid by a corporation that
17 conducts business operations in a federally designated
18 Foreign Trade Zone or Sub-Zone and that is designated a
19 High Impact Business located in Illinois; provided
20 that dividends eligible for the deduction provided in
21 subparagraph (K) of paragraph (2) of this subsection
22 shall not be eligible for the deduction provided under
23 this subparagraph (M);
24             (N) An amount equal to the amount of the deduction
25 used to compute the federal income tax credit for
26 restoration of substantial amounts held under claim of
27 right for the taxable year pursuant to Section 1341 of
28 the Internal Revenue Code of 1986;
29             (O) For taxable years 2001 and thereafter, for the
30 taxable year in which the bonus depreciation deduction
31 (30% of the adjusted basis of the qualified property)
32 is taken on the taxpayer's federal income tax return
33 under subsection (k) of Section 168 of the Internal
34 Revenue Code and for each applicable taxable year
35 thereafter, an amount equal to "x", where:
36                 (1) "y" equals the amount of the depreciation

 

 

HB6806 Engrossed - 28 - LRB093 20530 SJM 46335 b

1 deduction taken for the taxable year on the
2 taxpayer's federal income tax return on property
3 for which the bonus depreciation deduction (30% of
4 the adjusted basis of the qualified property) was
5 taken in any year under subsection (k) of Section
6 168 of the Internal Revenue Code, but not including
7 the bonus depreciation deduction; and
8                 (2) "x" equals "y" multiplied by 30 and then
9 divided by 70 (or "y" multiplied by 0.429).
10             The aggregate amount deducted under this
11 subparagraph in all taxable years for any one piece of
12 property may not exceed the amount of the bonus
13 depreciation deduction (30% of the adjusted basis of
14 the qualified property) taken on that property on the
15 taxpayer's federal income tax return under subsection
16 (k) of Section 168 of the Internal Revenue Code; and
17             (P) If the taxpayer reports a capital gain or loss
18 on the taxpayer's federal income tax return for the
19 taxable year based on a sale or transfer of property
20 for which the taxpayer was required in any taxable year
21 to make an addition modification under subparagraph
22 (D-5), then an amount equal to that addition
23 modification.
24             The taxpayer is allowed to take the deduction under
25 this subparagraph only once with respect to any one
26 piece of property.
 
27     (e) Gross income; adjusted gross income; taxable income.
28         (1) In general. Subject to the provisions of paragraph
29 (2) and subsection (b) (3), for purposes of this Section
30 and Section 803(e), a taxpayer's gross income, adjusted
31 gross income, or taxable income for the taxable year shall
32 mean the amount of gross income, adjusted gross income or
33 taxable income properly reportable for federal income tax
34 purposes for the taxable year under the provisions of the
35 Internal Revenue Code. Taxable income may be less than

 

 

HB6806 Engrossed - 29 - LRB093 20530 SJM 46335 b

1 zero. However, for taxable years ending on or after
2 December 31, 1986, net operating loss carryforwards from
3 taxable years ending prior to December 31, 1986, may not
4 exceed the sum of federal taxable income for the taxable
5 year before net operating loss deduction, plus the excess
6 of addition modifications over subtraction modifications
7 for the taxable year. For taxable years ending prior to
8 December 31, 1986, taxable income may never be an amount in
9 excess of the net operating loss for the taxable year as
10 defined in subsections (c) and (d) of Section 172 of the
11 Internal Revenue Code, provided that when taxable income of
12 a corporation (other than a Subchapter S corporation),
13 trust, or estate is less than zero and addition
14 modifications, other than those provided by subparagraph
15 (E) of paragraph (2) of subsection (b) for corporations or
16 subparagraph (E) of paragraph (2) of subsection (c) for
17 trusts and estates, exceed subtraction modifications, an
18 addition modification must be made under those
19 subparagraphs for any other taxable year to which the
20 taxable income less than zero (net operating loss) is
21 applied under Section 172 of the Internal Revenue Code or
22 under subparagraph (E) of paragraph (2) of this subsection
23 (e) applied in conjunction with Section 172 of the Internal
24 Revenue Code.
25         (2) Special rule. For purposes of paragraph (1) of this
26 subsection, the taxable income properly reportable for
27 federal income tax purposes shall mean:
28             (A) Certain life insurance companies. In the case
29 of a life insurance company subject to the tax imposed
30 by Section 801 of the Internal Revenue Code, life
31 insurance company taxable income, plus the amount of
32 distribution from pre-1984 policyholder surplus
33 accounts as calculated under Section 815a of the
34 Internal Revenue Code;
35             (B) Certain other insurance companies. In the case
36 of mutual insurance companies subject to the tax

 

 

HB6806 Engrossed - 30 - LRB093 20530 SJM 46335 b

1 imposed by Section 831 of the Internal Revenue Code,
2 insurance company taxable income;
3             (C) Regulated investment companies. In the case of
4 a regulated investment company subject to the tax
5 imposed by Section 852 of the Internal Revenue Code,
6 investment company taxable income;
7             (D) Real estate investment trusts. In the case of a
8 real estate investment trust subject to the tax imposed
9 by Section 857 of the Internal Revenue Code, real
10 estate investment trust taxable income;
11             (E) Consolidated corporations. In the case of a
12 corporation which is a member of an affiliated group of
13 corporations filing a consolidated income tax return
14 for the taxable year for federal income tax purposes,
15 taxable income determined as if such corporation had
16 filed a separate return for federal income tax purposes
17 for the taxable year and each preceding taxable year
18 for which it was a member of an affiliated group. For
19 purposes of this subparagraph, the taxpayer's separate
20 taxable income shall be determined as if the election
21 provided by Section 243(b) (2) of the Internal Revenue
22 Code had been in effect for all such years;
23             (F) Cooperatives. In the case of a cooperative
24 corporation or association, the taxable income of such
25 organization determined in accordance with the
26 provisions of Section 1381 through 1388 of the Internal
27 Revenue Code;
28             (G) Subchapter S corporations. In the case of: (i)
29 a Subchapter S corporation for which there is in effect
30 an election for the taxable year under Section 1362 of
31 the Internal Revenue Code, the taxable income of such
32 corporation determined in accordance with Section
33 1363(b) of the Internal Revenue Code, except that
34 taxable income shall take into account those items
35 which are required by Section 1363(b)(1) of the
36 Internal Revenue Code to be separately stated; and (ii)

 

 

HB6806 Engrossed - 31 - LRB093 20530 SJM 46335 b

1 a Subchapter S corporation for which there is in effect
2 a federal election to opt out of the provisions of the
3 Subchapter S Revision Act of 1982 and have applied
4 instead the prior federal Subchapter S rules as in
5 effect on July 1, 1982, the taxable income of such
6 corporation determined in accordance with the federal
7 Subchapter S rules as in effect on July 1, 1982; and
8             (H) Partnerships. In the case of a partnership,
9 taxable income determined in accordance with Section
10 703 of the Internal Revenue Code, except that taxable
11 income shall take into account those items which are
12 required by Section 703(a)(1) to be separately stated
13 but which would be taken into account by an individual
14 in calculating his taxable income.
 
15     (f) Valuation limitation amount.
16         (1) In general. The valuation limitation amount
17 referred to in subsections (a) (2) (G), (c) (2) (I) and
18 (d)(2) (E) is an amount equal to:
19             (A) The sum of the pre-August 1, 1969 appreciation
20 amounts (to the extent consisting of gain reportable
21 under the provisions of Section 1245 or 1250 of the
22 Internal Revenue Code) for all property in respect of
23 which such gain was reported for the taxable year; plus
24             (B) The lesser of (i) the sum of the pre-August 1,
25 1969 appreciation amounts (to the extent consisting of
26 capital gain) for all property in respect of which such
27 gain was reported for federal income tax purposes for
28 the taxable year, or (ii) the net capital gain for the
29 taxable year, reduced in either case by any amount of
30 such gain included in the amount determined under
31 subsection (a) (2) (F) or (c) (2) (H).
32         (2) Pre-August 1, 1969 appreciation amount.
33             (A) If the fair market value of property referred
34 to in paragraph (1) was readily ascertainable on August
35 1, 1969, the pre-August 1, 1969 appreciation amount for

 

 

HB6806 Engrossed - 32 - LRB093 20530 SJM 46335 b

1 such property is the lesser of (i) the excess of such
2 fair market value over the taxpayer's basis (for
3 determining gain) for such property on that date
4 (determined under the Internal Revenue Code as in
5 effect on that date), or (ii) the total gain realized
6 and reportable for federal income tax purposes in
7 respect of the sale, exchange or other disposition of
8 such property.
9             (B) If the fair market value of property referred
10 to in paragraph (1) was not readily ascertainable on
11 August 1, 1969, the pre-August 1, 1969 appreciation
12 amount for such property is that amount which bears the
13 same ratio to the total gain reported in respect of the
14 property for federal income tax purposes for the
15 taxable year, as the number of full calendar months in
16 that part of the taxpayer's holding period for the
17 property ending July 31, 1969 bears to the number of
18 full calendar months in the taxpayer's entire holding
19 period for the property.
20             (C) The Department shall prescribe such
21 regulations as may be necessary to carry out the
22 purposes of this paragraph.
 
23     (g) Double deductions. Unless specifically provided
24 otherwise, nothing in this Section shall permit the same item
25 to be deducted more than once.
 
26     (h) Legislative intention. Except as expressly provided by
27 this Section there shall be no modifications or limitations on
28 the amounts of income, gain, loss or deduction taken into
29 account in determining gross income, adjusted gross income or
30 taxable income for federal income tax purposes for the taxable
31 year, or in the amount of such items entering into the
32 computation of base income and net income under this Act for
33 such taxable year, whether in respect of property values as of
34 August 1, 1969 or otherwise.

 

 

HB6806 Engrossed - 33 - LRB093 20530 SJM 46335 b

1 (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99;
2 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676, eff.
3 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01; 92-16,
4 eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff. 8-17-01;
5 92-603, eff. 6-28-02; 92-626, eff. 7-11-02; 92-651, eff.
6 7-11-02; 92-846, eff. 8-23-02; revised 10-15-03.)
 
7     Section 99. Effective date. This Act takes effect upon
8 becoming law.