93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB6932

 

Introduced 02/09/04, by William B. Black - Patricia R. Bellock - Sidney H. Mathias

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/203   from Ch. 120, par. 2-203

    Amends the Illinois Income Tax Act. For taxable years ending on or after December 31, 2004, provides for a deduction from adjusted gross income of up to $5,000 paid by an individual taxpayer for dependent care provided for a child, disabled spouse, or other dependent adult during the taxable year. Provides that the amount may not be deducted unless certain information identifying the person providing the services is included on the return. Excepts the deduction from the sunset requirements. Effective immediately.


LRB093 18328 SJM 44034 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT regarding taxation.
 
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, up to $5,000 paid by the taxpayer for
3         dependent care provided for a child, disabled spouse,
4         or other dependent adult during the taxable year. No
5         amount paid or incurred for dependent care shall be
6         deducted unless (i) the name, address, and taxpayer
7         identification number of the person performing the
8         services are included on the return to which the
9         deduction relates or (ii) if the person performing the
10         services is an organization described in Section
11         501(c)(3) of the Internal Revenue Code and is exempt
12         from tax under Section 501(a) of the Internal Revenue
13         Code, the name and address of the person are included
14         on the return to which the deduction relates. This
15         paragraph is exempt from the provisions of Section 250.
 
16     (b) Corporations.
17         (1) In general. In the case of a corporation, base
18     income means an amount equal to the taxpayer's taxable
19     income for the taxable year as modified by paragraph (2).
20         (2) Modifications. The taxable income referred to in
21     paragraph (1) shall be modified by adding thereto the sum
22     of the following amounts:
23             (A) An amount equal to all amounts paid or accrued
24         to the taxpayer as interest and all distributions
25         received from regulated investment companies during
26         the taxable year to the extent excluded from gross
27         income in the computation of taxable income;
28             (B) An amount equal to the amount of tax imposed by
29         this Act to the extent deducted from gross income in
30         the computation of taxable income for the taxable year;
31             (C) In the case of a regulated investment company,
32         an amount equal to the excess of (i) the net long-term
33         capital gain for the taxable year, over (ii) the amount
34         of the capital gain dividends designated as such in
35         accordance with Section 852(b)(3)(C) of the Internal

 

 

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1         Revenue Code and any amount designated under Section
2         852(b)(3)(D) of the Internal Revenue Code,
3         attributable to the taxable year (this amendatory Act
4         of 1995 (Public Act 89-89) is declarative of existing
5         law and is not a new enactment);
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 earlier taxable
18         year, with the following limitations applied in the
19         order that 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

 

 

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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             (E-5) For taxable years ending after December 31,
5         1997, an amount equal to any eligible remediation costs
6         that the corporation deducted in computing adjusted
7         gross income and for which the corporation claims a
8         credit under subsection (l) of Section 201;
9             (E-10) For taxable years 2001 and thereafter, an
10         amount equal to the bonus depreciation deduction (30%
11         of the adjusted basis of the qualified property) taken
12         on the taxpayer's federal income tax return for the
13         taxable year under subsection (k) of Section 168 of the
14         Internal Revenue Code; and
15             (E-11) If the taxpayer reports a capital gain or
16         loss on the taxpayer's federal income tax return for
17         the taxable year based on a sale or transfer of
18         property for which the taxpayer was required in any
19         taxable year to make an addition modification under
20         subparagraph (E-10), then an amount equal to the
21         aggregate amount of the deductions taken in all taxable
22         years under subparagraph (T) with respect to that
23         property. ;
24             The taxpayer is required to make the addition
25         modification under this subparagraph only once with
26         respect to any one piece of property;
27     and by deducting from the total so obtained the sum of the
28     following amounts:
29             (F) An amount equal to the amount of any tax
30         imposed by this Act which was refunded to the taxpayer
31         and included in such total for the taxable year;
32             (G) An amount equal to any amount included in such
33         total under Section 78 of the Internal Revenue Code;
34             (H) In the case of a regulated investment company,
35         an amount equal to the amount of exempt interest
36         dividends as defined in subsection (b) (5) of Section

 

 

HB6932 - 13 - LRB093 18328 SJM 44034 b

1         852 of the Internal Revenue Code, paid to shareholders
2         for the taxable year;
3             (I) With the exception of any amounts subtracted
4         under subparagraph (J), an amount equal to the sum of
5         all amounts disallowed as deductions by (i) Sections
6         171(a) (2), and 265(a)(2) and amounts disallowed as
7         interest expense by Section 291(a)(3) of the Internal
8         Revenue Code, as now or hereafter amended, and all
9         amounts of expenses allocable to interest and
10         disallowed as deductions by Section 265(a)(1) of the
11         Internal Revenue Code, as now or hereafter amended; and
12         (ii) for taxable years ending on or after August 13,
13         1999, Sections 171(a)(2), 265, 280C, 291(a)(3), and
14         832(b)(5)(B)(i) of the Internal Revenue Code; the
15         provisions of this subparagraph are exempt from the
16         provisions of Section 250;
17             (J) An amount equal to all amounts included in such
18         total which are exempt from taxation by this State
19         either by reason of its statutes or Constitution or by
20         reason of the Constitution, treaties or statutes of the
21         United States; provided that, in the case of any
22         statute of this State that exempts income derived from
23         bonds or other obligations from the tax imposed under
24         this Act, the amount exempted shall be the interest net
25         of bond premium amortization;
26             (K) An amount equal to those dividends included in
27         such total which were paid by a corporation which
28         conducts business operations in an Enterprise Zone or
29         zones created under the Illinois Enterprise Zone Act
30         and conducts substantially all of its operations in an
31         Enterprise Zone or zones;
32             (L) An amount equal to those dividends included in
33         such total that were paid by a corporation that
34         conducts business operations in a federally designated
35         Foreign Trade Zone or Sub-Zone and that is designated a
36         High Impact Business located in Illinois; provided

 

 

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

 

 

HB6932 - 15 - LRB093 18328 SJM 44034 b

1         property which secures the loan or loans, using for
2         this purpose the original basis of such property on the
3         date that it was placed in service in a federally
4         designated Foreign Trade Zone or Sub-Zone located in
5         Illinois. No taxpayer that is eligible for the
6         deduction provided in subparagraph (M) of paragraph
7         (2) of this subsection shall be eligible for the
8         deduction provided under this subparagraph (M-1). The
9         subtraction modification available to taxpayers in any
10         year under this subsection shall be that portion of the
11         total interest paid by the borrower with respect to
12         such loan attributable to the eligible property as
13         calculated under the previous sentence;
14             (N) Two times any contribution made during the
15         taxable year to a designated zone organization to the
16         extent that the contribution (i) qualifies as a
17         charitable contribution under subsection (c) of
18         Section 170 of the Internal Revenue Code and (ii) must,
19         by its terms, be used for a project approved by the
20         Department of Commerce and Economic Opportunity
21         Community Affairs under Section 11 of the Illinois
22         Enterprise Zone Act;
23             (O) An amount equal to: (i) 85% for taxable years
24         ending on or before December 31, 1992, or, a percentage
25         equal to the percentage allowable under Section
26         243(a)(1) of the Internal Revenue Code of 1986 for
27         taxable years ending after December 31, 1992, of the
28         amount by which dividends included in taxable income
29         and received from a corporation that is not created or
30         organized under the laws of the United States or any
31         state or political subdivision thereof, including, for
32         taxable years ending on or after December 31, 1988,
33         dividends received or deemed received or paid or deemed
34         paid under Sections 951 through 964 of the Internal
35         Revenue Code, exceed the amount of the modification
36         provided under subparagraph (G) of paragraph (2) of

 

 

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1         this 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, 1988,
5         dividends received or deemed received or paid or deemed
6         paid under Sections 951 through 964 of the Internal
7         Revenue Code, from any such corporation specified in
8         clause (i) that would but for the provisions of Section
9         1504 (b) (3) of the Internal Revenue Code be treated as
10         a member of the affiliated group which includes the
11         dividend recipient, exceed the amount of the
12         modification provided under subparagraph (G) of
13         paragraph (2) of this subsection (b) which is related
14         to such dividends;
15             (P) An amount equal to any contribution made to a
16         job training project established pursuant to the Tax
17         Increment Allocation Redevelopment Act;
18             (Q) An amount equal to the amount of the deduction
19         used to compute the federal income tax credit for
20         restoration of substantial amounts held under claim of
21         right for the taxable year pursuant to Section 1341 of
22         the Internal Revenue Code of 1986;
23             (R) In the case of an attorney-in-fact with respect
24         to whom an interinsurer or a reciprocal insurer has
25         made the election under Section 835 of the Internal
26         Revenue Code, 26 U.S.C. 835, an amount equal to the
27         excess, if any, of the amounts paid or incurred by that
28         interinsurer or reciprocal insurer in the taxable year
29         to the attorney-in-fact over the deduction allowed to
30         that interinsurer or reciprocal insurer with respect
31         to the attorney-in-fact under Section 835(b) of the
32         Internal Revenue Code for the taxable year;
33             (S) For taxable years ending on or after December
34         31, 1997, in the case of a Subchapter S corporation, an
35         amount equal to all amounts of income allocable to a
36         shareholder subject to the Personal Property Tax

 

 

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1         Replacement Income Tax imposed by subsections (c) and
2         (d) of Section 201 of this Act, including amounts
3         allocable to organizations exempt from federal income
4         tax by reason of Section 501(a) of the Internal Revenue
5         Code. This subparagraph (S) is exempt from the
6         provisions of Section 250;
7             (T) For taxable years 2001 and thereafter, for the
8         taxable year in which the bonus depreciation deduction
9         (30% of the adjusted basis of the qualified property)
10         is taken on the taxpayer's federal income tax return
11         under subsection (k) of Section 168 of the Internal
12         Revenue Code and for each applicable taxable year
13         thereafter, an amount equal to "x", where:
14                 (1) "y" equals the amount of the depreciation
15             deduction taken for the taxable year on the
16             taxpayer's federal income tax return on property
17             for which the bonus depreciation deduction (30% of
18             the adjusted basis of the qualified property) was
19             taken in any year under subsection (k) of Section
20             168 of the Internal Revenue Code, but not including
21             the bonus depreciation deduction; and
22                 (2) "x" equals "y" multiplied by 30 and then
23             divided by 70 (or "y" multiplied by 0.429).
24             The aggregate amount deducted under this
25         subparagraph in all taxable years for any one piece of
26         property may not exceed the amount of the bonus
27         depreciation deduction (30% of the adjusted basis of
28         the qualified property) taken on that property on the
29         taxpayer's federal income tax return under subsection
30         (k) of Section 168 of the Internal Revenue Code; and
31             (U) If the taxpayer reports a capital gain or loss
32         on the taxpayer's federal income tax return for the
33         taxable year based on a sale or transfer of property
34         for which the taxpayer was required in any taxable year
35         to make an addition modification under subparagraph
36         (E-10), then an amount equal to that addition

 

 

HB6932 - 18 - LRB093 18328 SJM 44034 b

1         modification.
2             The taxpayer is allowed to take the deduction under
3         this subparagraph only once with respect to any one
4         piece of property.
5         (3) Special rule. For purposes of paragraph (2) (A),
6     "gross income" in the case of a life insurance company, for
7     tax years ending on and after December 31, 1994, shall mean
8     the gross investment income for the taxable year.
 
9     (c) Trusts and estates.
10         (1) In general. In the case of a trust or estate, base
11     income means an amount equal to the taxpayer's taxable
12     income for the taxable year as modified by paragraph (2).
13         (2) Modifications. Subject to the provisions of
14     paragraph (3), the taxable income referred to in paragraph
15     (1) shall be modified by adding thereto the sum of the
16     following amounts:
17             (A) An amount equal to all amounts paid or accrued
18         to the taxpayer as interest or dividends during the
19         taxable year to the extent excluded from gross income
20         in the computation of taxable income;
21             (B) In the case of (i) an estate, $600; (ii) a
22         trust which, under its governing instrument, is
23         required to distribute all of its income currently,
24         $300; and (iii) any other trust, $100, but in each such
25         case, only to the extent such amount was deducted in
26         the computation of taxable income;
27             (C) An amount equal to the amount of tax imposed by
28         this Act to the extent deducted from gross income in
29         the computation of taxable income for the taxable year;
30             (D) The amount of any net operating loss deduction
31         taken in arriving at taxable income, other than a net
32         operating loss carried forward from a taxable year
33         ending prior to December 31, 1986;
34             (E) For taxable years in which a net operating loss
35         carryback or carryforward from a taxable year ending

 

 

HB6932 - 19 - LRB093 18328 SJM 44034 b

1         prior to December 31, 1986 is an element of taxable
2         income under paragraph (1) of subsection (e) or
3         subparagraph (E) of paragraph (2) of subsection (e),
4         the amount by which addition modifications other than
5         those provided by this subparagraph (E) exceeded
6         subtraction modifications in such taxable year, with
7         the following limitations applied in the order that
8         they are listed:
9                 (i) the addition modification relating to the
10             net operating loss carried back or forward to the
11             taxable year from any taxable year ending prior to
12             December 31, 1986 shall be reduced by the amount of
13             addition modification under this subparagraph (E)
14             which related to that net operating loss and which
15             was taken into account in calculating the base
16             income of an earlier taxable year, and
17                 (ii) the addition modification relating to the
18             net operating loss carried back or forward to the
19             taxable year from any taxable year ending prior to
20             December 31, 1986 shall not exceed the amount of
21             such carryback or carryforward;
22             For taxable years in which there is a net operating
23         loss carryback or carryforward from more than one other
24         taxable year ending prior to December 31, 1986, the
25         addition modification provided in this subparagraph
26         (E) shall be the sum of the amounts computed
27         independently under the preceding provisions of this
28         subparagraph (E) for each such taxable year;
29             (F) For taxable years ending on or after January 1,
30         1989, an amount equal to the tax deducted pursuant to
31         Section 164 of the Internal Revenue Code if the trust
32         or estate is claiming the same tax for purposes of the
33         Illinois foreign tax credit under Section 601 of this
34         Act;
35             (G) An amount equal to the amount of the capital
36         gain deduction allowable under the Internal Revenue

 

 

HB6932 - 20 - LRB093 18328 SJM 44034 b

1         Code, to the extent deducted from gross income in the
2         computation of taxable income;
3             (G-5) For taxable years ending after December 31,
4         1997, an amount equal to any eligible remediation costs
5         that the trust or estate deducted in computing adjusted
6         gross income and for which the trust or estate claims a
7         credit under subsection (l) of Section 201;
8             (G-10) For taxable years 2001 and thereafter, an
9         amount equal to the bonus depreciation deduction (30%
10         of the adjusted basis of the qualified property) taken
11         on the taxpayer's federal income tax return for the
12         taxable year under subsection (k) of Section 168 of the
13         Internal Revenue Code; and
14             (G-11) If the taxpayer reports a capital gain or
15         loss on the taxpayer's federal income tax return for
16         the taxable year based on a sale or transfer of
17         property for which the taxpayer was required in any
18         taxable year to make an addition modification under
19         subparagraph (G-10), then an amount equal to the
20         aggregate amount of the deductions taken in all taxable
21         years under subparagraph (R) with respect to that
22         property. ;
23             The taxpayer is required to make the addition
24         modification under this subparagraph only once with
25         respect to any one piece of property;
26     and by deducting from the total so obtained the sum of the
27     following amounts:
28             (H) An amount equal to all amounts included in such
29         total pursuant to the provisions of Sections 402(a),
30         402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
31         Internal Revenue Code or included in such total as
32         distributions under the provisions of any retirement
33         or disability plan for employees of any governmental
34         agency or unit, or retirement payments to retired
35         partners, which payments are excluded in computing net
36         earnings from self employment by Section 1402 of the

 

 

HB6932 - 21 - LRB093 18328 SJM 44034 b

1         Internal Revenue Code and regulations adopted pursuant
2         thereto;
3             (I) The valuation limitation amount;
4             (J) 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             (K) An amount equal to all amounts included in
8         taxable income as modified by subparagraphs (A), (B),
9         (C), (D), (E), (F) and (G) which are exempt from
10         taxation by this State either by reason of its statutes
11         or Constitution or by reason of the Constitution,
12         treaties or statutes of the United States; provided
13         that, in the case of any statute of this State that
14         exempts income derived from bonds or other obligations
15         from the tax imposed under this Act, the amount
16         exempted shall be the interest net of bond premium
17         amortization;
18             (L) With the exception of any amounts subtracted
19         under subparagraph (K), an amount equal to the sum of
20         all amounts disallowed as deductions by (i) Sections
21         171(a) (2) and 265(a)(2) of the Internal Revenue Code,
22         as now or hereafter amended, and all amounts of
23         expenses allocable to interest and disallowed as
24         deductions by Section 265(1) of the Internal Revenue
25         Code of 1954, as now or hereafter amended; and (ii) for
26         taxable years ending on or after August 13, 1999,
27         Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
28         the Internal Revenue Code; the provisions of this
29         subparagraph are exempt from the provisions of Section
30         250;
31             (M) An amount equal to those dividends included in
32         such total which were paid by a corporation which
33         conducts business operations in an Enterprise Zone or
34         zones created under the Illinois Enterprise Zone Act
35         and conducts substantially all of its operations in an
36         Enterprise Zone or Zones;

 

 

HB6932 - 22 - LRB093 18328 SJM 44034 b

1             (N) An amount equal to any contribution made to a
2         job training project established pursuant to the Tax
3         Increment Allocation Redevelopment Act;
4             (O) An amount equal to those dividends included in
5         such total that were paid by a corporation that
6         conducts business operations in a federally designated
7         Foreign Trade Zone or Sub-Zone and that is designated a
8         High Impact Business located in Illinois; provided
9         that dividends eligible for the deduction provided in
10         subparagraph (M) of paragraph (2) of this subsection
11         shall not be eligible for the deduction provided under
12         this subparagraph (O);
13             (P) An amount equal to the amount of the deduction
14         used to compute the federal income tax credit for
15         restoration of substantial amounts held under claim of
16         right for the taxable year pursuant to Section 1341 of
17         the Internal Revenue Code of 1986;
18             (Q) For taxable year 1999 and thereafter, an amount
19         equal to the amount of any (i) distributions, to the
20         extent includible in gross income for federal income
21         tax purposes, made to the taxpayer because of his or
22         her status as a victim of persecution for racial or
23         religious reasons by Nazi Germany or any other Axis
24         regime or as an heir of the victim and (ii) items of
25         income, to the extent includible in gross income for
26         federal income tax purposes, attributable to, derived
27         from or in any way related to assets stolen from,
28         hidden from, or otherwise lost to a victim of
29         persecution for racial or religious reasons by Nazi
30         Germany or any other Axis regime immediately prior to,
31         during, and immediately after World War II, including,
32         but not limited to, interest on the proceeds receivable
33         as insurance under policies issued to a victim of
34         persecution for racial or religious reasons by Nazi
35         Germany or any other Axis regime by European insurance
36         companies immediately prior to and during World War II;

 

 

HB6932 - 23 - LRB093 18328 SJM 44034 b

1         provided, however, this subtraction from federal
2         adjusted gross income does not apply to assets acquired
3         with such assets or with the proceeds from the sale of
4         such assets; provided, further, this paragraph shall
5         only apply to a taxpayer who was the first recipient of
6         such assets after their recovery and who is a victim of
7         persecution for racial or religious reasons by Nazi
8         Germany or any other Axis regime or as an heir of the
9         victim. The amount of and the eligibility for any
10         public assistance, benefit, or similar entitlement is
11         not affected by the inclusion of items (i) and (ii) of
12         this paragraph in gross income for federal income tax
13         purposes. This paragraph is exempt from the provisions
14         of Section 250;
15             (R) For taxable years 2001 and thereafter, for the
16         taxable year in which the bonus depreciation deduction
17         (30% of the adjusted basis of the qualified property)
18         is taken on the taxpayer's federal income tax return
19         under subsection (k) of Section 168 of the Internal
20         Revenue Code and for each applicable taxable year
21         thereafter, an amount equal to "x", where:
22                 (1) "y" equals the amount of the depreciation
23             deduction taken for the taxable year on the
24             taxpayer's federal income tax return on property
25             for which the bonus depreciation deduction (30% of
26             the adjusted basis of the qualified property) was
27             taken in any year under subsection (k) of Section
28             168 of the Internal Revenue Code, but not including
29             the bonus depreciation deduction; and
30                 (2) "x" equals "y" multiplied by 30 and then
31             divided by 70 (or "y" multiplied by 0.429).
32             The aggregate amount deducted under this
33         subparagraph in all taxable years for any one piece of
34         property may not exceed the amount of the bonus
35         depreciation deduction (30% of the adjusted basis of
36         the qualified property) taken on that property on the

 

 

HB6932 - 24 - LRB093 18328 SJM 44034 b

1         taxpayer's federal income tax return under subsection
2         (k) of Section 168 of the Internal Revenue Code; and
3             (S) If the taxpayer reports a capital gain or loss
4         on the taxpayer's federal income tax return for the
5         taxable year based on a sale or transfer of property
6         for which the taxpayer was required in any taxable year
7         to make an addition modification under subparagraph
8         (G-10), then an amount equal to that addition
9         modification.
10             The taxpayer is allowed to take the deduction under
11         this subparagraph only once with respect to any one
12         piece of property.
13         (3) Limitation. The amount of any modification
14     otherwise required under this subsection shall, under
15     regulations prescribed by the Department, be adjusted by
16     any amounts included therein which were properly paid,
17     credited, or required to be distributed, or permanently set
18     aside for charitable purposes pursuant to Internal Revenue
19     Code Section 642(c) during the taxable year.
 
20     (d) Partnerships.
21         (1) In general. In the case of a partnership, 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. The taxable income referred to in
25     paragraph (1) shall be modified by adding thereto the sum
26     of the following amounts:
27             (A) An amount equal to all amounts paid or accrued
28         to the taxpayer as interest or dividends during the
29         taxable year to the extent excluded from gross income
30         in the computation of taxable income;
31             (B) An amount equal to the amount of tax imposed by
32         this Act to the extent deducted from gross income for
33         the taxable year;
34             (C) The amount of deductions allowed to the
35         partnership pursuant to Section 707 (c) of the Internal

 

 

HB6932 - 25 - LRB093 18328 SJM 44034 b

1         Revenue Code in calculating its taxable income;
2             (D) An amount equal to the amount of the capital
3         gain deduction allowable under the Internal Revenue
4         Code, to the extent deducted from gross income in the
5         computation of taxable income;
6             (D-5) For taxable years 2001 and thereafter, an
7         amount equal to the bonus depreciation deduction (30%
8         of the adjusted basis of the qualified property) taken
9         on the taxpayer's federal income tax return for the
10         taxable year under subsection (k) of Section 168 of the
11         Internal Revenue Code; and
12             (D-6) If the taxpayer reports a capital gain or
13         loss on the taxpayer's federal income tax return for
14         the taxable year based on a sale or transfer of
15         property for which the taxpayer was required in any
16         taxable year to make an addition modification under
17         subparagraph (D-5), then an amount equal to the
18         aggregate amount of the deductions taken in all taxable
19         years under subparagraph (O) with respect to that
20         property. ;
21             The taxpayer is required to make the addition
22         modification under this subparagraph only once with
23         respect to any one piece of property;
24     and by deducting from the total so obtained the following
25     amounts:
26             (E) The valuation limitation amount;
27             (F) An amount equal to the amount of any tax
28         imposed by this Act which was refunded to the taxpayer
29         and included in such total for the taxable year;
30             (G) An amount equal to all amounts included in
31         taxable income as modified by subparagraphs (A), (B),
32         (C) and (D) which are exempt from taxation by this
33         State either by reason of its statutes or Constitution
34         or by reason of the Constitution, treaties or statutes
35         of the United States; provided that, in the case of any
36         statute of this State that exempts income derived from

 

 

HB6932 - 26 - LRB093 18328 SJM 44034 b

1         bonds or other obligations from the tax imposed under
2         this Act, the amount exempted shall be the interest net
3         of bond premium amortization;
4             (H) Any income of the partnership which
5         constitutes personal service income as defined in
6         Section 1348 (b) (1) of the Internal Revenue Code (as
7         in effect December 31, 1981) or a reasonable allowance
8         for compensation paid or accrued for services rendered
9         by partners to the partnership, whichever is greater;
10             (I) An amount equal to all amounts of income
11         distributable to an entity subject to the Personal
12         Property Tax Replacement Income Tax imposed by
13         subsections (c) and (d) of Section 201 of this Act
14         including amounts distributable to organizations
15         exempt from federal income tax by reason of Section
16         501(a) of the Internal Revenue Code;
17             (J) With the exception of any amounts subtracted
18         under subparagraph (G), an amount equal to the sum of
19         all amounts disallowed as deductions by (i) Sections
20         171(a) (2), and 265(2) of the Internal Revenue Code of
21         1954, as now or hereafter amended, and all amounts of
22         expenses allocable to interest and disallowed as
23         deductions by Section 265(1) of the Internal Revenue
24         Code, as now or hereafter amended; and (ii) for taxable
25         years ending on or after August 13, 1999, Sections
26         171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
27         Internal Revenue Code; the provisions of this
28         subparagraph are exempt from the provisions of Section
29         250;
30             (K) An amount equal to those dividends included in
31         such total which were paid by a corporation which
32         conducts business operations in an Enterprise Zone or
33         zones created under the Illinois Enterprise Zone Act,
34         enacted by the 82nd General Assembly, and conducts
35         substantially all of its operations in an Enterprise
36         Zone or Zones;

 

 

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1             (L) An amount equal to any contribution made to a
2         job training project established pursuant to the Real
3         Property Tax Increment Allocation Redevelopment Act;
4             (M) An amount equal to those dividends included in
5         such total that were paid by a corporation that
6         conducts business operations in a federally designated
7         Foreign Trade Zone or Sub-Zone and that is designated a
8         High Impact Business located in Illinois; provided
9         that dividends eligible for the deduction provided in
10         subparagraph (K) of paragraph (2) of this subsection
11         shall not be eligible for the deduction provided under
12         this subparagraph (M);
13             (N) An amount equal to the amount of the deduction
14         used to compute the federal income tax credit for
15         restoration of substantial amounts held under claim of
16         right for the taxable year pursuant to Section 1341 of
17         the Internal Revenue Code of 1986;
18             (O) 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

 

 

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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             (P) 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         (D-5), 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     (e) Gross income; adjusted gross income; taxable income.
17         (1) In general. Subject to the provisions of paragraph
18     (2) and subsection (b) (3), for purposes of this Section
19     and Section 803(e), a taxpayer's gross income, adjusted
20     gross income, or taxable income for the taxable year shall
21     mean the amount of gross income, adjusted gross income or
22     taxable income properly reportable for federal income tax
23     purposes for the taxable year under the provisions of the
24     Internal Revenue Code. Taxable income may be less than
25     zero. However, for taxable years ending on or after
26     December 31, 1986, net operating loss carryforwards from
27     taxable years ending prior to December 31, 1986, may not
28     exceed the sum of federal taxable income for the taxable
29     year before net operating loss deduction, plus the excess
30     of addition modifications over subtraction modifications
31     for the taxable year. For taxable years ending prior to
32     December 31, 1986, taxable income may never be an amount in
33     excess of the net operating loss for the taxable year as
34     defined in subsections (c) and (d) of Section 172 of the
35     Internal Revenue Code, provided that when taxable income of

 

 

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1     a corporation (other than a Subchapter S corporation),
2     trust, or estate is less than zero and addition
3     modifications, other than those provided by subparagraph
4     (E) of paragraph (2) of subsection (b) for corporations or
5     subparagraph (E) of paragraph (2) of subsection (c) for
6     trusts and estates, exceed subtraction modifications, an
7     addition modification must be made under those
8     subparagraphs for any other taxable year to which the
9     taxable income less than zero (net operating loss) is
10     applied under Section 172 of the Internal Revenue Code or
11     under subparagraph (E) of paragraph (2) of this subsection
12     (e) applied in conjunction with Section 172 of the Internal
13     Revenue Code.
14         (2) Special rule. For purposes of paragraph (1) of this
15     subsection, the taxable income properly reportable for
16     federal income tax purposes shall mean:
17             (A) Certain life insurance companies. In the case
18         of a life insurance company subject to the tax imposed
19         by Section 801 of the Internal Revenue Code, life
20         insurance company taxable income, plus the amount of
21         distribution from pre-1984 policyholder surplus
22         accounts as calculated under Section 815a of the
23         Internal Revenue Code;
24             (B) Certain other insurance companies. In the case
25         of mutual insurance companies subject to the tax
26         imposed by Section 831 of the Internal Revenue Code,
27         insurance company taxable income;
28             (C) Regulated investment companies. In the case of
29         a regulated investment company subject to the tax
30         imposed by Section 852 of the Internal Revenue Code,
31         investment company taxable income;
32             (D) Real estate investment trusts. In the case of a
33         real estate investment trust subject to the tax imposed
34         by Section 857 of the Internal Revenue Code, real
35         estate investment trust taxable income;
36             (E) Consolidated corporations. In the case of a

 

 

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1         corporation which is a member of an affiliated group of
2         corporations filing a consolidated income tax return
3         for the taxable year for federal income tax purposes,
4         taxable income determined as if such corporation had
5         filed a separate return for federal income tax purposes
6         for the taxable year and each preceding taxable year
7         for which it was a member of an affiliated group. For
8         purposes of this subparagraph, the taxpayer's separate
9         taxable income shall be determined as if the election
10         provided by Section 243(b) (2) of the Internal Revenue
11         Code had been in effect for all such years;
12             (F) Cooperatives. In the case of a cooperative
13         corporation or association, the taxable income of such
14         organization determined in accordance with the
15         provisions of Section 1381 through 1388 of the Internal
16         Revenue Code;
17             (G) Subchapter S corporations. In the case of: (i)
18         a Subchapter S corporation for which there is in effect
19         an election for the taxable year under Section 1362 of
20         the Internal Revenue Code, the taxable income of such
21         corporation determined in accordance with Section
22         1363(b) of the Internal Revenue Code, except that
23         taxable income shall take into account those items
24         which are required by Section 1363(b)(1) of the
25         Internal Revenue Code to be separately stated; and (ii)
26         a Subchapter S corporation for which there is in effect
27         a federal election to opt out of the provisions of the
28         Subchapter S Revision Act of 1982 and have applied
29         instead the prior federal Subchapter S rules as in
30         effect on July 1, 1982, the taxable income of such
31         corporation determined in accordance with the federal
32         Subchapter S rules as in effect on July 1, 1982; and
33             (H) Partnerships. In the case of a partnership,
34         taxable income determined in accordance with Section
35         703 of the Internal Revenue Code, except that taxable
36         income shall take into account those items which are

 

 

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1         required by Section 703(a)(1) to be separately stated
2         but which would be taken into account by an individual
3         in calculating his 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 appreciation
9         amounts (to the extent consisting of gain reportable
10         under the provisions of Section 1245 or 1250 of the
11         Internal Revenue Code) for all property in respect of
12         which such gain was reported for the taxable year; plus
13             (B) The lesser of (i) the sum of the pre-August 1,
14         1969 appreciation amounts (to the extent consisting of
15         capital gain) for all property in respect of which such
16         gain was reported for federal income tax purposes for
17         the taxable year, or (ii) the net capital gain for the
18         taxable year, reduced in either case by any amount of
19         such gain included in the amount determined under
20         subsection (a) (2) (F) or (c) (2) (H).
21         (2) Pre-August 1, 1969 appreciation amount.
22             (A) If the fair market value of property referred
23         to in paragraph (1) was readily ascertainable on August
24         1, 1969, the pre-August 1, 1969 appreciation amount for
25         such property is the lesser of (i) the excess of such
26         fair market value over the taxpayer's basis (for
27         determining gain) for such property on that date
28         (determined under the Internal Revenue Code as in
29         effect on that date), or (ii) the total gain realized
30         and reportable for federal income tax purposes in
31         respect of the sale, exchange or other disposition of
32         such property.
33             (B) If the fair market value of property referred
34         to in paragraph (1) was not readily ascertainable on
35         August 1, 1969, the pre-August 1, 1969 appreciation

 

 

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1         amount for such property is that amount which bears the
2         same ratio to the total gain reported in respect of the
3         property for federal income tax purposes for the
4         taxable year, as the number of full calendar months in
5         that part of the taxpayer's holding period for the
6         property ending July 31, 1969 bears to the number of
7         full calendar months in the taxpayer's entire holding
8         period for the property.
9             (C) The Department shall prescribe such
10         regulations as may be necessary to carry out the
11         purposes of this paragraph.
 
12     (g) Double deductions. Unless specifically provided
13 otherwise, nothing in this Section shall permit the same item
14 to be deducted more than once.
 
15     (h) Legislative intention. Except as expressly provided by
16 this Section there shall be no modifications or limitations on
17 the amounts of income, gain, loss or deduction taken into
18 account in determining gross income, adjusted gross income or
19 taxable income for federal income tax purposes for the taxable
20 year, or in the amount of such items entering into the
21 computation of base income and net income under this Act for
22 such taxable year, whether in respect of property values as of
23 August 1, 1969 or otherwise.
24 (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99;
25 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676, eff.
26 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01; 92-16,
27 eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff. 8-17-01;
28 92-603, eff. 6-28-02; 92-626, eff. 7-11-02; 92-651, eff.
29 7-11-02; 92-846, eff. 8-23-02; revised 10-15-03.)
 
30     Section 99. Effective date. This Act takes effect upon
31 becoming law.