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093_HB3054
LRB093 11102 SJM 11852 b
1 AN ACT concerning taxes.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Income Tax Act is amended by
5 changing Section 203 as follows:
6 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
7 Sec. 203. Base income defined.
8 (a) Individuals.
9 (1) In general. In the case of an individual, base
10 income means an amount equal to the taxpayer's adjusted
11 gross income for the taxable year as modified by
12 paragraph (2).
13 (2) Modifications. The adjusted gross income
14 referred to in paragraph (1) shall be modified by adding
15 thereto the sum of the following amounts:
16 (A) An amount equal to all amounts paid or
17 accrued to the taxpayer as interest or dividends
18 during the taxable year to the extent excluded from
19 gross income in the computation of adjusted gross
20 income, except stock dividends of qualified public
21 utilities described in Section 305(e) of the
22 Internal Revenue Code;
23 (B) An amount equal to the amount of tax
24 imposed by this Act to the extent deducted from
25 gross income in the computation of adjusted gross
26 income for the taxable year;
27 (C) An amount equal to the amount received
28 during the taxable year as a recovery or refund of
29 real property taxes paid with respect to the
30 taxpayer's principal residence under the Revenue Act
31 of 1939 and for which a deduction was previously
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1 taken under subparagraph (L) of this paragraph (2)
2 prior to July 1, 1991, the retrospective application
3 date of Article 4 of Public Act 87-17. In the case
4 of multi-unit or multi-use structures and farm
5 dwellings, the taxes on the taxpayer's principal
6 residence shall be that portion of the total taxes
7 for the entire property which is attributable to
8 such principal residence;
9 (D) An amount equal to the amount of the
10 capital gain deduction allowable under the Internal
11 Revenue Code, to the extent deducted from gross
12 income in the computation of adjusted gross income;
13 (D-5) An amount, to the extent not included in
14 adjusted gross income, equal to the amount of money
15 withdrawn by the taxpayer in the taxable year from a
16 medical care savings account and the interest earned
17 on the account in the taxable year of a withdrawal
18 pursuant to subsection (b) of Section 20 of the
19 Medical Care Savings Account Act or subsection (b)
20 of Section 20 of the Medical Care Savings Account
21 Act of 2000;
22 (D-10) For taxable years ending after December
23 31, 1997, an amount equal to any eligible
24 remediation costs that the individual deducted in
25 computing adjusted gross income and for which the
26 individual claims a credit under subsection (l) of
27 Section 201;
28 (D-15) For taxable years 2001 and thereafter,
29 an amount equal to the bonus depreciation deduction
30 (30% of the adjusted basis of the qualified
31 property) taken on the taxpayer's federal income tax
32 return for the taxable year under subsection (k) of
33 Section 168 of the Internal Revenue Code; and
34 (D-16) If the taxpayer reports a capital gain
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1 or loss on the taxpayer's federal income tax return
2 for the taxable year based on a sale or transfer of
3 property for which the taxpayer was required in any
4 taxable year to make an addition modification under
5 subparagraph (D-15), then an amount equal to the
6 aggregate amount of the deductions taken in all
7 taxable years under subparagraph (Z) with respect to
8 that property.;
9 The taxpayer is required to make the addition
10 modification under this subparagraph only once with
11 respect to any one piece of property;. and
12 (D-20)(D-15) For taxable years beginning on
13 or after January 1, 2002 and ending on or before
14 December 31, 2002, in the case of a distribution
15 from a qualified tuition program under Section 529
16 of the Internal Revenue Code, other than (i) a
17 distribution from a College Savings Pool created
18 under Section 16.5 of the State Treasurer Act or
19 (ii) a distribution from the Illinois Prepaid
20 Tuition Trust Fund, an amount equal to the amount
21 excluded from gross income under Section
22 529(c)(3)(B). For taxable years beginning on or
23 after January 1, 2003, in the case of a distribution
24 from a qualified tuition program under Section 529
25 of the Internal Revenue Code, other than (i) a
26 distribution from a College Savings Pool created
27 under Section 16.5 of the State Treasurer Act, (ii)
28 a distribution from the Illinois Prepaid Tuition
29 Trust Fund, or (iii) a distribution from a qualified
30 tuition program under Section 529 of the Internal
31 Revenue Code that is administered by a state that
32 has passed a law that provides an unlimited state
33 tax deduction for moneys distributed from a
34 qualified tuition program administered by the State
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1 of Illinois, an amount equal to the amount excluded
2 from gross income under Section 529(c)(3)(B);
3 and by deducting from the total so obtained the sum of
4 the following amounts:
5 (E) For taxable years ending before December
6 31, 2001, any amount included in such total in
7 respect of any compensation (including but not
8 limited to any compensation paid or accrued to a
9 serviceman while a prisoner of war or missing in
10 action) paid to a resident by reason of being on
11 active duty in the Armed Forces of the United States
12 and in respect of any compensation paid or accrued
13 to a resident who as a governmental employee was a
14 prisoner of war or missing in action, and in respect
15 of any compensation paid to a resident in 1971 or
16 thereafter for annual training performed pursuant to
17 Sections 502 and 503, Title 32, United States Code
18 as a member of the Illinois National Guard. For
19 taxable years ending on or after December 31, 2001,
20 any amount included in such total in respect of any
21 compensation (including but not limited to any
22 compensation paid or accrued to a serviceman while a
23 prisoner of war or missing in action) paid to a
24 resident by reason of being a member of any
25 component of the Armed Forces of the United States
26 and in respect of any compensation paid or accrued
27 to a resident who as a governmental employee was a
28 prisoner of war or missing in action, and in respect
29 of any compensation paid to a resident in 2001 or
30 thereafter by reason of being a member of the
31 Illinois National Guard. The provisions of this
32 amendatory Act of the 92nd General Assembly are
33 exempt from the provisions of Section 250;
34 (F) An amount equal to all amounts included in
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1 such total pursuant to the provisions of Sections
2 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
3 408 of the Internal Revenue Code, or included in
4 such total as distributions under the provisions of
5 any retirement or disability plan for employees of
6 any governmental agency or unit, or retirement
7 payments to retired partners, which payments are
8 excluded in computing net earnings from self
9 employment by Section 1402 of the Internal Revenue
10 Code and regulations adopted pursuant thereto;
11 (G) The valuation limitation amount;
12 (H) An amount equal to the amount of any tax
13 imposed by this Act which was refunded to the
14 taxpayer and included in such total for the taxable
15 year;
16 (I) An amount equal to all amounts included in
17 such total pursuant to the provisions of Section 111
18 of the Internal Revenue Code as a recovery of items
19 previously deducted from adjusted gross income in
20 the computation of taxable income;
21 (J) An amount equal to those dividends
22 included in such total which were paid by a
23 corporation which conducts business operations in an
24 Enterprise Zone or zones created under the Illinois
25 Enterprise Zone Act, and conducts substantially all
26 of its operations in an Enterprise Zone or zones;
27 (K) An amount equal to those dividends
28 included in such total that were paid by a
29 corporation that conducts business operations in a
30 federally designated Foreign Trade Zone or Sub-Zone
31 and that is designated a High Impact Business
32 located in Illinois; provided that dividends
33 eligible for the deduction provided in subparagraph
34 (J) of paragraph (2) of this subsection shall not be
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1 eligible for the deduction provided under this
2 subparagraph (K);
3 (L) For taxable years ending after December
4 31, 1983, an amount equal to all social security
5 benefits and railroad retirement benefits included
6 in such total pursuant to Sections 72(r) and 86 of
7 the Internal Revenue Code;
8 (M) With the exception of any amounts
9 subtracted under subparagraph (N), an amount equal
10 to the sum of all amounts disallowed as deductions
11 by (i) Sections 171(a) (2), and 265(2) of the
12 Internal Revenue Code of 1954, as now or hereafter
13 amended, and all amounts of expenses allocable to
14 interest and disallowed as deductions by Section
15 265(1) of the Internal Revenue Code of 1954, as now
16 or hereafter amended; and (ii) for taxable years
17 ending on or after August 13, 1999, Sections
18 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
19 Internal Revenue Code; the provisions of this
20 subparagraph are exempt from the provisions of
21 Section 250;
22 (N) An amount equal to all amounts included in
23 such total which are exempt from taxation by this
24 State either by reason of its statutes or
25 Constitution or by reason of the Constitution,
26 treaties or statutes of the United States; provided
27 that, in the case of any statute of this State that
28 exempts income derived from bonds or other
29 obligations from the tax imposed under this Act, the
30 amount exempted shall be the interest net of bond
31 premium amortization;
32 (O) An amount equal to any contribution made
33 to a job training project established pursuant to
34 the Tax Increment Allocation Redevelopment Act;
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1 (P) An amount equal to the amount of the
2 deduction used to compute the federal income tax
3 credit for restoration of substantial amounts held
4 under claim of right for the taxable year pursuant
5 to Section 1341 of the Internal Revenue Code of
6 1986;
7 (Q) An amount equal to any amounts included in
8 such total, received by the taxpayer as an
9 acceleration in the payment of life, endowment or
10 annuity benefits in advance of the time they would
11 otherwise be payable as an indemnity for a terminal
12 illness;
13 (R) An amount equal to the amount of any
14 federal or State bonus paid to veterans of the
15 Persian Gulf War;
16 (S) An amount, to the extent included in
17 adjusted gross income, equal to the amount of a
18 contribution made in the taxable year on behalf of
19 the taxpayer to a medical care savings account
20 established under the Medical Care Savings Account
21 Act or the Medical Care Savings Account Act of 2000
22 to the extent the contribution is accepted by the
23 account administrator as provided in that Act;
24 (T) An amount, to the extent included in
25 adjusted gross income, equal to the amount of
26 interest earned in the taxable year on a medical
27 care savings account established under the Medical
28 Care Savings Account Act or the Medical Care Savings
29 Account Act of 2000 on behalf of the taxpayer, other
30 than interest added pursuant to item (D-5) of this
31 paragraph (2);
32 (U) For one taxable year beginning on or after
33 January 1, 1994, an amount equal to the total amount
34 of tax imposed and paid under subsections (a) and
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1 (b) of Section 201 of this Act on grant amounts
2 received by the taxpayer under the Nursing Home
3 Grant Assistance Act during the taxpayer's taxable
4 years 1992 and 1993;
5 (V) Beginning with tax years ending on or
6 after December 31, 1995 and ending with tax years
7 ending on or before December 31, 2004, an amount
8 equal to the amount paid by a taxpayer who is a
9 self-employed taxpayer, a partner of a partnership,
10 or a shareholder in a Subchapter S corporation for
11 health insurance or long-term care insurance for
12 that taxpayer or that taxpayer's spouse or
13 dependents, to the extent that the amount paid for
14 that health insurance or long-term care insurance
15 may be deducted under Section 213 of the Internal
16 Revenue Code of 1986, has not been deducted on the
17 federal income tax return of the taxpayer, and does
18 not exceed the taxable income attributable to that
19 taxpayer's income, self-employment income, or
20 Subchapter S corporation income; except that no
21 deduction shall be allowed under this item (V) if
22 the taxpayer is eligible to participate in any
23 health insurance or long-term care insurance plan of
24 an employer of the taxpayer or the taxpayer's
25 spouse. The amount of the health insurance and
26 long-term care insurance subtracted under this item
27 (V) shall be determined by multiplying total health
28 insurance and long-term care insurance premiums paid
29 by the taxpayer times a number that represents the
30 fractional percentage of eligible medical expenses
31 under Section 213 of the Internal Revenue Code of
32 1986 not actually deducted on the taxpayer's federal
33 income tax return;
34 (W) For taxable years beginning on or after
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1 January 1, 1998, all amounts included in the
2 taxpayer's federal gross income in the taxable year
3 from amounts converted from a regular IRA to a Roth
4 IRA. This paragraph is exempt from the provisions of
5 Section 250;
6 (X) For taxable year 1999 and thereafter, an
7 amount equal to the amount of any (i) distributions,
8 to the extent includible in gross income for federal
9 income tax purposes, made to the taxpayer because of
10 his or her status as a victim of persecution for
11 racial or religious reasons by Nazi Germany or any
12 other Axis regime or as an heir of the victim and
13 (ii) items of income, to the extent includible in
14 gross income for federal income tax purposes,
15 attributable to, derived from or in any way related
16 to assets stolen from, hidden from, or otherwise
17 lost to a victim of persecution for racial or
18 religious reasons by Nazi Germany or any other Axis
19 regime immediately prior to, during, and immediately
20 after World War II, including, but not limited to,
21 interest on the proceeds receivable as insurance
22 under policies issued to a victim of persecution for
23 racial or religious reasons by Nazi Germany or any
24 other Axis regime by European insurance companies
25 immediately prior to and during World War II;
26 provided, however, this subtraction from federal
27 adjusted gross income does not apply to assets
28 acquired with such assets or with the proceeds from
29 the sale of such assets; provided, further, this
30 paragraph shall only apply to a taxpayer who was the
31 first recipient of such assets after their recovery
32 and who is a victim of persecution for racial or
33 religious reasons by Nazi Germany or any other Axis
34 regime or as an heir of the victim. The amount of
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1 and the eligibility for any public assistance,
2 benefit, or similar entitlement is not affected by
3 the inclusion of items (i) and (ii) of this
4 paragraph in gross income for federal income tax
5 purposes. This paragraph is exempt from the
6 provisions of Section 250;
7 (Y) For taxable years beginning on or after
8 January 1, 2002 and ending on or before December 31,
9 2002, moneys contributed in the taxable year to a
10 College Savings Pool account under Section 16.5 of
11 the State Treasurer Act, except that amounts
12 excluded from gross income under Section
13 529(c)(3)(C)(i) of the Internal Revenue Code shall
14 not be considered moneys contributed under this
15 subparagraph (Y). For taxable years beginning on or
16 after January 1, 2003, moneys contributed in the
17 taxable year to (i) a College Savings Pool account
18 under Section 16.5 of the State Treasurer Act or
19 (ii) the Illinois Prepaid Tuition Trust Fund, except
20 that amounts excluded from gross income under
21 Section 529(c)(3)(C)(i) of the Internal Revenue Code
22 shall not be considered moneys contributed under
23 this subparagraph (Y). This subparagraph (Y) is
24 exempt from the provisions of Section 250;
25 (Z) For taxable years 2001 and thereafter, for
26 the taxable year in which the bonus depreciation
27 deduction (30% of the adjusted basis of the
28 qualified property) is taken on the taxpayer's
29 federal income tax return under subsection (k) of
30 Section 168 of the Internal Revenue Code and for
31 each applicable taxable year thereafter, an amount
32 equal to "x", where:
33 (1) "y" equals the amount of the
34 depreciation deduction taken for the taxable
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1 year on the taxpayer's federal income tax
2 return on property for which the bonus
3 depreciation deduction (30% of the adjusted
4 basis of the qualified property) was taken in
5 any year under subsection (k) of Section 168 of
6 the Internal Revenue Code, but not including
7 the bonus depreciation deduction; and
8 (2) "x" equals "y" multiplied by 30 and
9 then divided by 70 (or "y" multiplied by
10 0.429).
11 The aggregate amount deducted under this
12 subparagraph in all taxable years for any one piece
13 of property may not exceed the amount of the bonus
14 depreciation deduction (30% of the adjusted basis of
15 the qualified property) taken on that property on
16 the taxpayer's federal income tax return under
17 subsection (k) of Section 168 of the Internal
18 Revenue Code; and
19 (AA) If the taxpayer reports a capital gain or
20 loss on the taxpayer's federal income tax return for
21 the taxable year based on a sale or transfer of
22 property for which the taxpayer was required in any
23 taxable year to make an addition modification under
24 subparagraph (D-15), then an amount equal to that
25 addition modification.
26 The taxpayer is allowed to take the deduction
27 under this subparagraph only once with respect to
28 any one piece of property; and
29 (BB)(Z) Any amount included in adjusted gross
30 income, other than salary, received by a driver in a
31 ridesharing arrangement using a motor vehicle.
32 (b) Corporations.
33 (1) In general. In the case of a corporation, base
34 income means an amount equal to the taxpayer's taxable
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1 income for the taxable year as modified by paragraph (2).
2 (2) Modifications. The taxable income referred to
3 in paragraph (1) shall be modified by adding thereto the
4 sum of the following amounts:
5 (A) An amount equal to all amounts paid or
6 accrued to the taxpayer as interest and all
7 distributions received from regulated investment
8 companies during the taxable year to the extent
9 excluded from gross income in the computation of
10 taxable income;
11 (B) An amount equal to the amount of tax
12 imposed by this Act to the extent deducted from
13 gross income in the computation of taxable income
14 for the taxable year;
15 (C) In the case of a regulated investment
16 company, an amount equal to the excess of (i) the
17 net long-term capital gain for the taxable year,
18 over (ii) the amount of the capital gain dividends
19 designated as such in accordance with Section
20 852(b)(3)(C) of the Internal Revenue Code and any
21 amount designated under Section 852(b)(3)(D) of the
22 Internal Revenue Code, attributable to the taxable
23 year (this amendatory Act of 1995 (Public Act 89-89)
24 is declarative of existing law and is not a new
25 enactment);
26 (D) The amount of any net operating loss
27 deduction taken in arriving at taxable income, other
28 than a net operating loss carried forward from a
29 taxable year ending prior to December 31, 1986;
30 (E) For taxable years in which a net operating
31 loss carryback or carryforward from a taxable year
32 ending prior to December 31, 1986 is an element of
33 taxable income under paragraph (1) of subsection (e)
34 or subparagraph (E) of paragraph (2) of subsection
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1 (e), the amount by which addition modifications
2 other than those provided by this subparagraph (E)
3 exceeded subtraction modifications in such earlier
4 taxable year, with the following limitations applied
5 in the order that they are listed:
6 (i) the addition modification relating to
7 the net operating loss carried back or forward
8 to the taxable year from any taxable year
9 ending prior to December 31, 1986 shall be
10 reduced by the amount of addition modification
11 under this subparagraph (E) which related to
12 that net operating loss and which was taken
13 into account in calculating the base income of
14 an earlier taxable year, and
15 (ii) the addition modification relating
16 to the net operating loss carried back or
17 forward to the taxable year from any taxable
18 year ending prior to December 31, 1986 shall
19 not exceed the amount of such carryback or
20 carryforward;
21 For taxable years in which there is a net
22 operating loss carryback or carryforward from more
23 than one other taxable year ending prior to December
24 31, 1986, the addition modification provided in this
25 subparagraph (E) shall be the sum of the amounts
26 computed independently under the preceding
27 provisions of this subparagraph (E) for each such
28 taxable year;
29 (E-5) For taxable years ending after December
30 31, 1997, an amount equal to any eligible
31 remediation costs that the corporation deducted in
32 computing adjusted gross income and for which the
33 corporation claims a credit under subsection (l) of
34 Section 201;
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1 (E-10) For taxable years 2001 and thereafter,
2 an amount equal to the bonus depreciation deduction
3 (30% of the adjusted basis of the qualified
4 property) taken on the taxpayer's federal income tax
5 return for the taxable year under subsection (k) of
6 Section 168 of the Internal Revenue Code; and
7 (E-11) If the taxpayer reports a capital gain
8 or loss on the taxpayer's federal income tax return
9 for the taxable year based on a sale or transfer of
10 property for which the taxpayer was required in any
11 taxable year to make an addition modification under
12 subparagraph (E-10), then an amount equal to the
13 aggregate amount of the deductions taken in all
14 taxable years under subparagraph (T) with respect to
15 that property.;
16 The taxpayer is required to make the addition
17 modification under this subparagraph only once with
18 respect to any one piece of property;
19 and by deducting from the total so obtained the sum of
20 the following amounts:
21 (F) An amount equal to the amount of any tax
22 imposed by this Act which was refunded to the
23 taxpayer and included in such total for the taxable
24 year;
25 (G) An amount equal to any amount included in
26 such total under Section 78 of the Internal Revenue
27 Code;
28 (H) In the case of a regulated investment
29 company, an amount equal to the amount of exempt
30 interest dividends as defined in subsection (b) (5)
31 of Section 852 of the Internal Revenue Code, paid to
32 shareholders for the taxable year;
33 (I) With the exception of any amounts
34 subtracted under subparagraph (J), an amount equal
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1 to the sum of all amounts disallowed as deductions
2 by (i) Sections 171(a) (2), and 265(a)(2) and
3 amounts disallowed as interest expense by Section
4 291(a)(3) of the Internal Revenue Code, as now or
5 hereafter amended, and all amounts of expenses
6 allocable to interest and disallowed as deductions
7 by Section 265(a)(1) of the Internal Revenue Code,
8 as now or hereafter amended; and (ii) for taxable
9 years ending on or after August 13, 1999, Sections
10 171(a)(2), 265, 280C, 291(a)(3), and 832(b)(5)(B)(i)
11 of the Internal Revenue Code; the provisions of this
12 subparagraph are exempt from the provisions of
13 Section 250;
14 (J) An amount equal to all amounts included in
15 such total which are exempt from taxation by this
16 State either by reason of its statutes or
17 Constitution or by reason of the Constitution,
18 treaties or statutes of the United States; provided
19 that, in the case of any statute of this State that
20 exempts income derived from bonds or other
21 obligations from the tax imposed under this Act, the
22 amount exempted shall be the interest net of bond
23 premium amortization;
24 (K) An amount equal to those dividends
25 included in such total which were paid by a
26 corporation which conducts business operations in an
27 Enterprise Zone or zones created under the Illinois
28 Enterprise Zone Act and conducts substantially all
29 of its operations in an Enterprise Zone or zones;
30 (L) An amount equal to those dividends
31 included in such total that were paid by a
32 corporation that conducts business operations in a
33 federally designated Foreign Trade Zone or Sub-Zone
34 and that is designated a High Impact Business
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1 located in Illinois; provided that dividends
2 eligible for the deduction provided in subparagraph
3 (K) of paragraph 2 of this subsection shall not be
4 eligible for the deduction provided under this
5 subparagraph (L);
6 (M) For any taxpayer that is a financial
7 organization within the meaning of Section 304(c) of
8 this Act, an amount included in such total as
9 interest income from a loan or loans made by such
10 taxpayer to a borrower, to the extent that such a
11 loan is secured by property which is eligible for
12 the Enterprise Zone Investment Credit. To determine
13 the portion of a loan or loans that is secured by
14 property eligible for a Section 201(f) investment
15 credit to the borrower, the entire principal amount
16 of the loan or loans between the taxpayer and the
17 borrower should be divided into the basis of the
18 Section 201(f) investment credit property which
19 secures the loan or loans, using for this purpose
20 the original basis of such property on the date that
21 it was placed in service in the Enterprise Zone.
22 The subtraction modification available to taxpayer
23 in any year under this subsection shall be that
24 portion of the total interest paid by the borrower
25 with respect to such loan attributable to the
26 eligible property as calculated under the previous
27 sentence;
28 (M-1) For any taxpayer that is a financial
29 organization within the meaning of Section 304(c) of
30 this Act, an amount included in such total as
31 interest income from a loan or loans made by such
32 taxpayer to a borrower, to the extent that such a
33 loan is secured by property which is eligible for
34 the High Impact Business Investment Credit. To
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1 determine the portion of a loan or loans that is
2 secured by property eligible for a Section 201(h)
3 investment credit to the borrower, the entire
4 principal amount of the loan or loans between the
5 taxpayer and the borrower should be divided into the
6 basis of the Section 201(h) investment credit
7 property which secures the loan or loans, using for
8 this purpose the original basis of such property on
9 the date that it was placed in service in a
10 federally designated Foreign Trade Zone or Sub-Zone
11 located in Illinois. No taxpayer that is eligible
12 for the deduction provided in subparagraph (M) of
13 paragraph (2) of this subsection shall be eligible
14 for the deduction provided under this subparagraph
15 (M-1). The subtraction modification available to
16 taxpayers in any year under this subsection shall be
17 that portion of the total interest paid by the
18 borrower with respect to such loan attributable to
19 the eligible property as calculated under the
20 previous sentence;
21 (N) Two times any contribution made during the
22 taxable year to a designated zone organization to
23 the extent that the contribution (i) qualifies as a
24 charitable contribution under subsection (c) of
25 Section 170 of the Internal Revenue Code and (ii)
26 must, by its terms, be used for a project approved
27 by the Department of Commerce and Community Affairs
28 under Section 11 of the Illinois Enterprise Zone
29 Act;
30 (O) An amount equal to: (i) 85% for taxable
31 years ending on or before December 31, 1992, or, a
32 percentage equal to the percentage allowable under
33 Section 243(a)(1) of the Internal Revenue Code of
34 1986 for taxable years ending after December 31,
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1 1992, of the amount by which dividends included in
2 taxable income and received from a corporation that
3 is not created or organized under the laws of the
4 United States or any state or political subdivision
5 thereof, including, for taxable years ending on or
6 after December 31, 1988, dividends received or
7 deemed received or paid or deemed paid under
8 Sections 951 through 964 of the Internal Revenue
9 Code, exceed the amount of the modification provided
10 under subparagraph (G) of paragraph (2) of this
11 subsection (b) which is related to such dividends;
12 plus (ii) 100% of the amount by which dividends,
13 included in taxable income and received, including,
14 for taxable years ending on or after December 31,
15 1988, dividends received or deemed received or paid
16 or deemed paid under Sections 951 through 964 of the
17 Internal Revenue Code, from any such corporation
18 specified in clause (i) that would but for the
19 provisions of Section 1504 (b) (3) of the Internal
20 Revenue Code be treated as a member of the
21 affiliated group which includes the dividend
22 recipient, exceed the amount of the modification
23 provided under subparagraph (G) of paragraph (2) of
24 this subsection (b) which is related to such
25 dividends;
26 (P) An amount equal to any contribution made
27 to a job training project established pursuant to
28 the Tax Increment Allocation Redevelopment Act;
29 (Q) An amount equal to the amount of the
30 deduction used to compute the federal income tax
31 credit for restoration of substantial amounts held
32 under claim of right for the taxable year pursuant
33 to Section 1341 of the Internal Revenue Code of
34 1986;
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1 (R) In the case of an attorney-in-fact with
2 respect to whom an interinsurer or a reciprocal
3 insurer has made the election under Section 835 of
4 the Internal Revenue Code, 26 U.S.C. 835, an amount
5 equal to the excess, if any, of the amounts paid or
6 incurred by that interinsurer or reciprocal insurer
7 in the taxable year to the attorney-in-fact over the
8 deduction allowed to that interinsurer or reciprocal
9 insurer with respect to the attorney-in-fact under
10 Section 835(b) of the Internal Revenue Code for the
11 taxable year;
12 (S) For taxable years ending on or after
13 December 31, 1997, in the case of a Subchapter S
14 corporation, an amount equal to all amounts of
15 income allocable to a shareholder subject to the
16 Personal Property Tax Replacement Income Tax imposed
17 by subsections (c) and (d) of Section 201 of this
18 Act, including amounts allocable to organizations
19 exempt from federal income tax by reason of Section
20 501(a) of the Internal Revenue Code. This
21 subparagraph (S) is exempt from the provisions of
22 Section 250;
23 (T) For taxable years 2001 and thereafter, for
24 the taxable year in which the bonus depreciation
25 deduction (30% of the adjusted basis of the
26 qualified property) is taken on the taxpayer's
27 federal income tax return under subsection (k) of
28 Section 168 of the Internal Revenue Code and for
29 each applicable taxable year thereafter, an amount
30 equal to "x", where:
31 (1) "y" equals the amount of the
32 depreciation deduction taken for the taxable
33 year on the taxpayer's federal income tax
34 return on property for which the bonus
-20- LRB093 11102 SJM 11852 b
1 depreciation deduction (30% of the adjusted
2 basis of the qualified property) was taken in
3 any year under subsection (k) of Section 168 of
4 the Internal Revenue Code, but not including
5 the bonus depreciation deduction; and
6 (2) "x" equals "y" multiplied by 30 and
7 then divided by 70 (or "y" multiplied by
8 0.429).
9 The aggregate amount deducted under this
10 subparagraph in all taxable years for any one piece
11 of property may not exceed the amount of the bonus
12 depreciation deduction (30% of the adjusted basis of
13 the qualified property) taken on that property on
14 the taxpayer's federal income tax return under
15 subsection (k) of Section 168 of the Internal
16 Revenue Code; and
17 (U) If the taxpayer reports a capital gain or
18 loss on the taxpayer's federal income tax return for
19 the taxable year based on a sale or transfer of
20 property for which the taxpayer was required in any
21 taxable year to make an addition modification under
22 subparagraph (E-10), then an amount equal to that
23 addition modification.
24 The taxpayer is allowed to take the deduction
25 under this subparagraph only once with respect to
26 any one piece of property.
27 (3) Special rule. For purposes of paragraph (2)
28 (A), "gross income" in the case of a life insurance
29 company, for tax years ending on and after December 31,
30 1994, shall mean the gross investment income for the
31 taxable year.
32 (c) Trusts and estates.
33 (1) In general. In the case of a trust or estate,
34 base income means an amount equal to the taxpayer's
-21- LRB093 11102 SJM 11852 b
1 taxable income for the taxable year as modified by
2 paragraph (2).
3 (2) Modifications. Subject to the provisions of
4 paragraph (3), the taxable income referred to in
5 paragraph (1) shall be modified by adding thereto the sum
6 of the following amounts:
7 (A) An amount equal to all amounts paid or
8 accrued to the taxpayer as interest or dividends
9 during the taxable year to the extent excluded from
10 gross income in the computation of taxable income;
11 (B) In the case of (i) an estate, $600; (ii) a
12 trust which, under its governing instrument, is
13 required to distribute all of its income currently,
14 $300; and (iii) any other trust, $100, but in each
15 such case, only to the extent such amount was
16 deducted in the computation of taxable income;
17 (C) An amount equal to the amount of tax
18 imposed by this Act to the extent deducted from
19 gross income in the computation of taxable income
20 for the taxable year;
21 (D) The amount of any net operating loss
22 deduction taken in arriving at taxable income, other
23 than a net operating loss carried forward from a
24 taxable year ending prior to December 31, 1986;
25 (E) For taxable years in which a net operating
26 loss carryback or carryforward from a taxable year
27 ending prior to December 31, 1986 is an element of
28 taxable income under paragraph (1) of subsection (e)
29 or subparagraph (E) of paragraph (2) of subsection
30 (e), the amount by which addition modifications
31 other than those provided by this subparagraph (E)
32 exceeded subtraction modifications in such taxable
33 year, with the following limitations applied in the
34 order that they are listed:
-22- LRB093 11102 SJM 11852 b
1 (i) the addition modification relating to
2 the net operating loss carried back or forward
3 to the taxable year from any taxable year
4 ending prior to December 31, 1986 shall be
5 reduced by the amount of addition modification
6 under this subparagraph (E) which related to
7 that net operating loss and which was taken
8 into account in calculating the base income of
9 an earlier taxable year, and
10 (ii) the addition modification relating
11 to the net operating loss carried back or
12 forward to the taxable year from any taxable
13 year ending prior to December 31, 1986 shall
14 not exceed the amount of such carryback or
15 carryforward;
16 For taxable years in which there is a net
17 operating loss carryback or carryforward from more
18 than one other taxable year ending prior to December
19 31, 1986, the addition modification provided in this
20 subparagraph (E) shall be the sum of the amounts
21 computed independently under the preceding
22 provisions of this subparagraph (E) for each such
23 taxable year;
24 (F) For taxable years ending on or after
25 January 1, 1989, an amount equal to the tax deducted
26 pursuant to Section 164 of the Internal Revenue Code
27 if the trust or estate is claiming the same tax for
28 purposes of the Illinois foreign tax credit under
29 Section 601 of this Act;
30 (G) An amount equal to the amount of the
31 capital gain deduction allowable under the Internal
32 Revenue Code, to the extent deducted from gross
33 income in the computation of taxable income;
34 (G-5) For taxable years ending after December
-23- LRB093 11102 SJM 11852 b
1 31, 1997, an amount equal to any eligible
2 remediation costs that the trust or estate deducted
3 in computing adjusted gross income and for which the
4 trust or estate claims a credit under subsection (l)
5 of Section 201;
6 (G-10) For taxable years 2001 and thereafter,
7 an amount equal to the bonus depreciation deduction
8 (30% of the adjusted basis of the qualified
9 property) taken on the taxpayer's federal income tax
10 return for the taxable year under subsection (k) of
11 Section 168 of the Internal Revenue Code; and
12 (G-11) If the taxpayer reports a capital gain
13 or loss on the taxpayer's federal income tax return
14 for 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 (G-10), then an amount equal to the
18 aggregate amount of the deductions taken in all
19 taxable years under subparagraph (R) with respect to
20 that 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 sum of
25 the following amounts:
26 (H) An amount equal to all amounts included in
27 such total pursuant to the provisions of Sections
28 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and
29 408 of the Internal Revenue Code or included in such
30 total as distributions under the provisions of any
31 retirement or disability plan for employees of any
32 governmental agency or unit, or retirement payments
33 to retired partners, which payments are excluded in
34 computing net earnings from self employment by
-24- LRB093 11102 SJM 11852 b
1 Section 1402 of the Internal Revenue Code and
2 regulations adopted pursuant 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
6 taxpayer and included in such total for the taxable
7 year;
8 (K) An amount equal to all amounts included in
9 taxable income as modified by subparagraphs (A),
10 (B), (C), (D), (E), (F) and (G) which are exempt
11 from taxation by this State either by reason of its
12 statutes or Constitution or by reason of the
13 Constitution, treaties or statutes of the United
14 States; provided that, in the case of any statute of
15 this State that exempts income derived from bonds or
16 other obligations from the tax imposed under this
17 Act, the amount exempted shall be the interest net
18 of bond premium amortization;
19 (L) With the exception of any amounts
20 subtracted under subparagraph (K), an amount equal
21 to the sum of all amounts disallowed as deductions
22 by (i) Sections 171(a) (2) and 265(a)(2) of the
23 Internal Revenue Code, as now or hereafter amended,
24 and all amounts of expenses allocable to interest
25 and disallowed as deductions by Section 265(1) of
26 the Internal Revenue Code of 1954, as now or
27 hereafter amended; and (ii) for taxable years ending
28 on or after August 13, 1999, Sections 171(a)(2),
29 265, 280C, and 832(b)(5)(B)(i) of the Internal
30 Revenue Code; the provisions of this subparagraph
31 are exempt from the provisions of Section 250;
32 (M) An amount equal to those dividends
33 included in such total which were paid by a
34 corporation which conducts business operations in an
-25- LRB093 11102 SJM 11852 b
1 Enterprise Zone or zones created under the Illinois
2 Enterprise Zone Act and conducts substantially all
3 of its operations in an Enterprise Zone or Zones;
4 (N) An amount equal to any contribution made
5 to a job training project established pursuant to
6 the Tax Increment Allocation Redevelopment Act;
7 (O) An amount equal to those dividends
8 included in such total that were paid by a
9 corporation that conducts business operations in a
10 federally designated Foreign Trade Zone or Sub-Zone
11 and that is designated a High Impact Business
12 located in Illinois; provided that dividends
13 eligible for the deduction provided in subparagraph
14 (M) of paragraph (2) of this subsection shall not be
15 eligible for the deduction provided under this
16 subparagraph (O);
17 (P) An amount equal to the amount of the
18 deduction used to compute the federal income tax
19 credit for restoration of substantial amounts held
20 under claim of right for the taxable year pursuant
21 to Section 1341 of the Internal Revenue Code of
22 1986;
23 (Q) For taxable year 1999 and thereafter, an
24 amount equal to the amount of any (i) distributions,
25 to the extent includible in gross income for federal
26 income tax purposes, made to the taxpayer because of
27 his or her status as a victim of persecution for
28 racial or religious reasons by Nazi Germany or any
29 other Axis regime or as an heir of the victim and
30 (ii) items of income, to the extent includible in
31 gross income for federal income tax purposes,
32 attributable to, derived from or in any way related
33 to assets stolen from, hidden from, or otherwise
34 lost to a victim of persecution for racial or
-26- LRB093 11102 SJM 11852 b
1 religious reasons by Nazi Germany or any other Axis
2 regime immediately prior to, during, and immediately
3 after World War II, including, but not limited to,
4 interest on the proceeds receivable as insurance
5 under policies issued to a victim of persecution for
6 racial or religious reasons by Nazi Germany or any
7 other Axis regime by European insurance companies
8 immediately prior to and during World War II;
9 provided, however, this subtraction from federal
10 adjusted gross income does not apply to assets
11 acquired with such assets or with the proceeds from
12 the sale of such assets; provided, further, this
13 paragraph shall only apply to a taxpayer who was the
14 first recipient of such assets after their recovery
15 and who is a victim of persecution for racial or
16 religious reasons by Nazi Germany or any other Axis
17 regime or as an heir of the victim. The amount of
18 and the eligibility for any public assistance,
19 benefit, or similar entitlement is not affected by
20 the inclusion of items (i) and (ii) of this
21 paragraph in gross income for federal income tax
22 purposes. This paragraph is exempt from the
23 provisions of Section 250;
24 (R) For taxable years 2001 and thereafter, for
25 the taxable year in which the bonus depreciation
26 deduction (30% of the adjusted basis of the
27 qualified property) is taken on the taxpayer's
28 federal income tax return under subsection (k) of
29 Section 168 of the Internal Revenue Code and for
30 each applicable taxable year thereafter, an amount
31 equal to "x", where:
32 (1) "y" equals the amount of the
33 depreciation deduction taken for the taxable
34 year on the taxpayer's federal income tax
-27- LRB093 11102 SJM 11852 b
1 return on property for which the bonus
2 depreciation deduction (30% of the adjusted
3 basis of the qualified property) was taken in
4 any year under subsection (k) of Section 168 of
5 the Internal Revenue Code, but not including
6 the bonus depreciation deduction; and
7 (2) "x" equals "y" multiplied by 30 and
8 then divided by 70 (or "y" multiplied by
9 0.429).
10 The aggregate amount deducted under this
11 subparagraph in all taxable years for any one piece
12 of 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
15 the taxpayer's federal income tax return under
16 subsection (k) of Section 168 of the Internal
17 Revenue Code; and
18 (S) If the taxpayer reports a capital gain or
19 loss on the taxpayer's federal income tax return for
20 the taxable year based on a sale or transfer of
21 property for which the taxpayer was required in any
22 taxable year to make an addition modification under
23 subparagraph (G-10), then an amount equal to that
24 addition modification.
25 The taxpayer is allowed to take the deduction
26 under this subparagraph only once with respect to
27 any one piece of property.
28 (3) Limitation. The amount of any modification
29 otherwise required under this subsection shall, under
30 regulations prescribed by the Department, be adjusted by
31 any amounts included therein which were properly paid,
32 credited, or required to be distributed, or permanently
33 set aside for charitable purposes pursuant to Internal
34 Revenue Code Section 642(c) during the taxable year.
-28- LRB093 11102 SJM 11852 b
1 (d) Partnerships.
2 (1) In general. In the case of a partnership, base
3 income means an amount equal to the taxpayer's taxable
4 income for the taxable year as modified by paragraph (2).
5 (2) Modifications. The taxable income referred to
6 in paragraph (1) shall be modified by adding thereto the
7 sum of the following amounts:
8 (A) An amount equal to all amounts paid or
9 accrued to the taxpayer as interest or dividends
10 during the taxable year to the extent excluded from
11 gross income in the computation of taxable income;
12 (B) An amount equal to the amount of tax
13 imposed by this Act to the extent deducted from
14 gross income for the taxable year;
15 (C) The amount of deductions allowed to the
16 partnership pursuant to Section 707 (c) of the
17 Internal Revenue Code in calculating its taxable
18 income;
19 (D) An amount equal to the amount of the
20 capital gain deduction allowable under the Internal
21 Revenue Code, to the extent deducted from gross
22 income in the computation of taxable income;
23 (D-5) For taxable years 2001 and thereafter,
24 an amount equal to the bonus depreciation deduction
25 (30% of the adjusted basis of the qualified
26 property) taken on the taxpayer's federal income tax
27 return for the taxable year under subsection (k) of
28 Section 168 of the Internal Revenue Code; and
29 (D-6) If the taxpayer reports a capital gain
30 or loss on the taxpayer's federal income tax return
31 for the taxable year based on a sale or transfer of
32 property for which the taxpayer was required in any
33 taxable year to make an addition modification under
34 subparagraph (D-5), then an amount equal to the
-29- LRB093 11102 SJM 11852 b
1 aggregate amount of the deductions taken in all
2 taxable years under subparagraph (O) with respect to
3 that property.;
4 The taxpayer is required to make the addition
5 modification under this subparagraph only once with
6 respect to any one piece of property;
7 and by deducting from the total so obtained the following
8 amounts:
9 (E) The valuation limitation amount;
10 (F) An amount equal to the amount of any tax
11 imposed by this Act which was refunded to the
12 taxpayer and included in such total for the taxable
13 year;
14 (G) An amount equal to all amounts included in
15 taxable income as modified by subparagraphs (A),
16 (B), (C) and (D) which are exempt from taxation by
17 this State either by reason of its statutes or
18 Constitution or by reason of the Constitution,
19 treaties or statutes of the United States; provided
20 that, in the case of any statute of this State that
21 exempts income derived from bonds or other
22 obligations from the tax imposed under this Act, the
23 amount exempted shall be the interest net of bond
24 premium amortization;
25 (H) Any income of the partnership which
26 constitutes personal service income as defined in
27 Section 1348 (b) (1) of the Internal Revenue Code
28 (as in effect December 31, 1981) or a reasonable
29 allowance for compensation paid or accrued for
30 services rendered by partners to the partnership,
31 whichever is greater;
32 (I) An amount equal to all amounts of income
33 distributable to an entity subject to the Personal
34 Property Tax Replacement Income Tax imposed by
-30- LRB093 11102 SJM 11852 b
1 subsections (c) and (d) of Section 201 of this Act
2 including amounts distributable to organizations
3 exempt from federal income tax by reason of Section
4 501(a) of the Internal Revenue Code;
5 (J) With the exception of any amounts
6 subtracted under subparagraph (G), an amount equal
7 to the sum of all amounts disallowed as deductions
8 by (i) Sections 171(a) (2), and 265(2) of the
9 Internal Revenue Code of 1954, as now or hereafter
10 amended, and all amounts of expenses allocable to
11 interest and disallowed as deductions by Section
12 265(1) of the Internal Revenue Code, as now or
13 hereafter amended; and (ii) for taxable years ending
14 on or after August 13, 1999, Sections 171(a)(2),
15 265, 280C, and 832(b)(5)(B)(i) of the Internal
16 Revenue Code; the provisions of this subparagraph
17 are exempt from the provisions of Section 250;
18 (K) An amount equal to those dividends
19 included in such total which were paid by a
20 corporation which conducts business operations in an
21 Enterprise Zone or zones created under the Illinois
22 Enterprise Zone Act, enacted by the 82nd General
23 Assembly, and conducts substantially all of its
24 operations in an Enterprise Zone or Zones;
25 (L) An amount equal to any contribution made
26 to a job training project established pursuant to
27 the Real Property Tax Increment Allocation
28 Redevelopment Act;
29 (M) An amount equal to those dividends
30 included in such total that were paid by a
31 corporation that conducts business operations in a
32 federally designated Foreign Trade Zone or Sub-Zone
33 and that is designated a High Impact Business
34 located in Illinois; provided that dividends
-31- LRB093 11102 SJM 11852 b
1 eligible for the deduction provided in subparagraph
2 (K) of paragraph (2) of this subsection shall not be
3 eligible for the deduction provided under this
4 subparagraph (M);
5 (N) An amount equal to the amount of the
6 deduction used to compute the federal income tax
7 credit for restoration of substantial amounts held
8 under claim of right for the taxable year pursuant
9 to Section 1341 of the Internal Revenue Code of
10 1986;
11 (O) For taxable years 2001 and thereafter, for
12 the taxable year in which the bonus depreciation
13 deduction (30% of the adjusted basis of the
14 qualified property) is taken on the taxpayer's
15 federal income tax return under subsection (k) of
16 Section 168 of the Internal Revenue Code and for
17 each applicable taxable year thereafter, an amount
18 equal to "x", where:
19 (1) "y" equals the amount of the
20 depreciation deduction taken for the taxable
21 year on the taxpayer's federal income tax
22 return on property for which the bonus
23 depreciation deduction (30% of the adjusted
24 basis of the qualified property) was taken in
25 any year under subsection (k) of Section 168 of
26 the Internal Revenue Code, but not including
27 the bonus depreciation deduction; and
28 (2) "x" equals "y" multiplied by 30 and
29 then divided by 70 (or "y" multiplied by
30 0.429).
31 The aggregate amount deducted under this
32 subparagraph in all taxable years for any one piece
33 of property may not exceed the amount of the bonus
34 depreciation deduction (30% of the adjusted basis of
-32- LRB093 11102 SJM 11852 b
1 the qualified property) taken on that property on
2 the taxpayer's federal income tax return under
3 subsection (k) of Section 168 of the Internal
4 Revenue Code; and
5 (P) If the taxpayer reports a capital gain or
6 loss on the taxpayer's federal income tax return for
7 the taxable year based on a sale or transfer of
8 property for which the taxpayer was required in any
9 taxable year to make an addition modification under
10 subparagraph (D-5), then an amount equal to that
11 addition modification.
12 The taxpayer is allowed to take the deduction
13 under this subparagraph only once with respect to
14 any one piece of property.
15 (e) Gross income; adjusted gross income; taxable income.
16 (1) In general. Subject to the provisions of
17 paragraph (2) and subsection (b) (3), for purposes of
18 this Section and Section 803(e), a taxpayer's gross
19 income, adjusted gross income, or taxable income for the
20 taxable year shall mean the amount of gross income,
21 adjusted gross income or taxable income properly
22 reportable for federal income tax purposes for the
23 taxable year under the provisions of the Internal Revenue
24 Code. Taxable income may be less than zero. However, for
25 taxable years ending on or after December 31, 1986, net
26 operating loss carryforwards from taxable years ending
27 prior to December 31, 1986, may not exceed the sum of
28 federal taxable income for the taxable year before net
29 operating loss deduction, plus the excess of addition
30 modifications over subtraction modifications for the
31 taxable year. For taxable years ending prior to December
32 31, 1986, taxable income may never be an amount in excess
33 of the net operating loss for the taxable year as defined
34 in subsections (c) and (d) of Section 172 of the Internal
-33- LRB093 11102 SJM 11852 b
1 Revenue Code, provided that when taxable income of a
2 corporation (other than a Subchapter S corporation),
3 trust, or estate is less than zero and addition
4 modifications, other than those provided by subparagraph
5 (E) of paragraph (2) of subsection (b) for corporations
6 or subparagraph (E) of paragraph (2) of subsection (c)
7 for trusts and estates, exceed subtraction modifications,
8 an addition modification must be made under those
9 subparagraphs for any other taxable year to which the
10 taxable income less than zero (net operating loss) is
11 applied under Section 172 of the Internal Revenue Code or
12 under subparagraph (E) of paragraph (2) of this
13 subsection (e) applied in conjunction with Section 172 of
14 the Internal Revenue Code.
15 (2) Special rule. For purposes of paragraph (1) of
16 this subsection, the taxable income properly reportable
17 for federal income tax purposes shall mean:
18 (A) Certain life insurance companies. In the
19 case of a life insurance company subject to the tax
20 imposed by Section 801 of the Internal Revenue Code,
21 life insurance company taxable income, plus the
22 amount of distribution from pre-1984 policyholder
23 surplus accounts as calculated under Section 815a of
24 the Internal Revenue Code;
25 (B) Certain other insurance companies. In the
26 case of mutual insurance companies subject to the
27 tax imposed by Section 831 of the Internal Revenue
28 Code, insurance company taxable income;
29 (C) Regulated investment companies. In the
30 case of a regulated investment company subject to
31 the tax imposed by Section 852 of the Internal
32 Revenue Code, investment company taxable income;
33 (D) Real estate investment trusts. In the
34 case of a real estate investment trust subject to
-34- LRB093 11102 SJM 11852 b
1 the tax imposed by Section 857 of the Internal
2 Revenue Code, real estate investment trust taxable
3 income;
4 (E) Consolidated corporations. In the case of
5 a corporation which is a member of an affiliated
6 group of corporations filing a consolidated income
7 tax return for the taxable year for federal income
8 tax purposes, taxable income determined as if such
9 corporation had filed a separate return for federal
10 income tax purposes for the taxable year and each
11 preceding taxable year for which it was a member of
12 an affiliated group. For purposes of this
13 subparagraph, the taxpayer's separate taxable income
14 shall be determined as if the election provided by
15 Section 243(b) (2) of the Internal Revenue Code had
16 been in effect for all such years;
17 (F) Cooperatives. In the case of a
18 cooperative corporation or association, the taxable
19 income of such organization determined in accordance
20 with the provisions of Section 1381 through 1388 of
21 the Internal Revenue Code;
22 (G) Subchapter S corporations. In the case
23 of: (i) a Subchapter S corporation for which there
24 is in effect an election for the taxable year under
25 Section 1362 of the Internal Revenue Code, the
26 taxable income of such corporation determined in
27 accordance with Section 1363(b) of the Internal
28 Revenue Code, except that taxable income shall take
29 into account those items which are required by
30 Section 1363(b)(1) of the Internal Revenue Code to
31 be separately stated; and (ii) a Subchapter S
32 corporation for which there is in effect a federal
33 election to opt out of the provisions of the
34 Subchapter S Revision Act of 1982 and have applied
-35- LRB093 11102 SJM 11852 b
1 instead the prior federal Subchapter S rules as in
2 effect on July 1, 1982, the taxable income of such
3 corporation determined in accordance with the
4 federal Subchapter S rules as in effect on July 1,
5 1982; and
6 (H) Partnerships. In the case of a
7 partnership, taxable income determined in accordance
8 with Section 703 of the Internal Revenue Code,
9 except that taxable income shall take into account
10 those items which are required by Section 703(a)(1)
11 to be separately stated but which would be taken
12 into account by an individual in calculating his
13 taxable income.
14 (f) Valuation limitation amount.
15 (1) In general. The valuation limitation amount
16 referred to in subsections (a) (2) (G), (c) (2) (I) and
17 (d)(2) (E) is an amount equal to:
18 (A) The sum of the pre-August 1, 1969
19 appreciation amounts (to the extent consisting of
20 gain reportable under the provisions of Section 1245
21 or 1250 of the Internal Revenue Code) for all
22 property in respect of which such gain was reported
23 for the taxable year; plus
24 (B) The lesser of (i) the sum of the
25 pre-August 1, 1969 appreciation amounts (to the
26 extent consisting of capital gain) for all property
27 in respect of which such gain was reported for
28 federal income tax purposes for the taxable year, or
29 (ii) the net capital gain for the taxable year,
30 reduced in either case by any amount of such gain
31 included in the amount determined under subsection
32 (a) (2) (F) or (c) (2) (H).
33 (2) Pre-August 1, 1969 appreciation amount.
34 (A) If the fair market value of property
-36- LRB093 11102 SJM 11852 b
1 referred to in paragraph (1) was readily
2 ascertainable on August 1, 1969, the pre-August 1,
3 1969 appreciation amount for such property is the
4 lesser of (i) the excess of such fair market value
5 over the taxpayer's basis (for determining gain) for
6 such property on that date (determined under the
7 Internal Revenue Code as in effect on that date), or
8 (ii) the total gain realized and reportable for
9 federal income tax purposes in respect of the sale,
10 exchange or other disposition of such property.
11 (B) If the fair market value of property
12 referred to in paragraph (1) was not readily
13 ascertainable on August 1, 1969, the pre-August 1,
14 1969 appreciation amount for such property is that
15 amount which bears the same ratio to the total gain
16 reported in respect of the property for federal
17 income tax purposes for the taxable year, as the
18 number of full calendar months in that part of the
19 taxpayer's holding period for the property ending
20 July 31, 1969 bears to the number of full calendar
21 months in the taxpayer's entire holding period for
22 the property.
23 (C) The Department shall prescribe such
24 regulations as may be necessary to carry out the
25 purposes of this paragraph.
26 (g) Double deductions. Unless specifically provided
27 otherwise, nothing in this Section shall permit the same item
28 to be deducted more than once.
29 (h) Legislative intention. Except as expressly provided
30 by this Section there shall be no modifications or
31 limitations on the amounts of income, gain, loss or deduction
32 taken into account in determining gross income, adjusted
33 gross income or taxable income for federal income tax
-37- LRB093 11102 SJM 11852 b
1 purposes for the taxable year, or in the amount of such items
2 entering into the computation of base income and net income
3 under this Act for such taxable year, whether in respect of
4 property values as of August 1, 1969 or otherwise.
5 (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99;
6 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676, eff.
7 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01; 92-16,
8 eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff. 8-17-01;
9 92-603, eff. 6-28-02; 92-626, eff. 7-11-02; 92-651, eff.
10 7-11-02; 92-846, eff. 8-23-02; revised 11-15-02.)
11 Section 99. Effective date. This Act takes effect upon
12 becoming law.
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