State of Illinois
92nd General Assembly
Legislation

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92_HB3643

 
                                               LRB9210132SMdv

 1        AN ACT concerning 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
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
 
                            -2-                LRB9210132SMdv
 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; and
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        and by deducting from the total so obtained  the  sum  of
29        the following amounts:
30                  (E)  For  taxable  years ending before December
31             31, 2001, any  amount  included  in  such  total  in
32             respect  of  any  compensation  (including  but  not
33             limited  to  any  compensation  paid or accrued to a
34             serviceman while a prisoner of  war  or  missing  in
 
                            -3-                LRB9210132SMdv
 1             action)  paid  to  a  resident by reason of being on
 2             active duty in the Armed Forces of the United States
 3             and in respect of any compensation paid  or  accrued
 4             to  a  resident who as a governmental employee was a
 5             prisoner of war or missing in action, and in respect
 6             of any compensation paid to a resident  in  1971  or
 7             thereafter for annual training performed pursuant to
 8             Sections  502  and 503, Title 32, United States Code
 9             as a member of  the  Illinois  National  Guard.  For
10             taxable  years ending on or after December 31, 2001,
11             any amount included in such total in respect of  any
12             compensation  (including  but  not  limited  to  any
13             compensation paid or accrued to a serviceman while a
14             prisoner  of  war  or  missing  in action) paid to a
15             resident  by  reason  of  being  a  member  of   any
16             component  of  the Armed Forces of the United States
17             and in respect of any compensation paid  or  accrued
18             to  a  resident who as a governmental employee was a
19             prisoner of war or missing in action, and in respect
20             of any compensation paid to a resident  in  2001  or
21             thereafter  by  reason  of  being  a  member  of the
22             Illinois National  Guard.  The  provisions  of  this
23             amendatory  Act  of  the  92nd  General Assembly are
24             exempt from the provisions of Section 250;
25                  (F)  An amount equal to all amounts included in
26             such total pursuant to the  provisions  of  Sections
27             402(a),  402(c), 403(a), 403(b), 406(a), 407(a), and
28             408 of the Internal Revenue  Code,  or  included  in
29             such  total as distributions under the provisions of
30             any retirement or disability plan for  employees  of
31             any  governmental  agency  or  unit,  or  retirement
32             payments  to  retired  partners,  which payments are
33             excluded  in  computing  net  earnings   from   self
34             employment  by  Section 1402 of the Internal Revenue
 
                            -4-                LRB9210132SMdv
 1             Code and regulations adopted pursuant thereto;
 2                  (G)  The valuation limitation amount;
 3                  (H)  An amount equal to the amount of  any  tax
 4             imposed  by  this  Act  which  was  refunded  to the
 5             taxpayer and included in such total for the  taxable
 6             year;
 7                  (I)  An amount equal to all amounts included in
 8             such total pursuant to the provisions of Section 111
 9             of  the Internal Revenue Code as a recovery of items
10             previously deducted from adjusted  gross  income  in
11             the computation of taxable income;
12                  (J)  An   amount   equal   to  those  dividends
13             included  in  such  total  which  were  paid  by   a
14             corporation which conducts business operations in an
15             Enterprise  Zone or zones created under the Illinois
16             Enterprise Zone Act, and conducts substantially  all
17             of its operations in an Enterprise Zone or zones;
18                  (K)  An   amount   equal   to  those  dividends
19             included  in  such  total  that  were  paid   by   a
20             corporation  that  conducts business operations in a
21             federally designated Foreign Trade Zone or  Sub-Zone
22             and  that  is  designated  a  High  Impact  Business
23             located   in   Illinois;   provided  that  dividends
24             eligible for the deduction provided in  subparagraph
25             (J) of paragraph (2) of this subsection shall not be
26             eligible  for  the  deduction  provided  under  this
27             subparagraph (K);
28                  (L)  For  taxable  years  ending after December
29             31, 1983, an amount equal  to  all  social  security
30             benefits  and  railroad retirement benefits included
31             in such total pursuant to Sections 72(r) and  86  of
32             the Internal Revenue Code;
33                  (M)  With   the   exception   of   any  amounts
34             subtracted under subparagraph (N), an  amount  equal
 
                            -5-                LRB9210132SMdv
 1             to  the  sum of all amounts disallowed as deductions
 2             by (i)  Sections  171(a)  (2),  and  265(2)  of  the
 3             Internal  Revenue  Code of 1954, as now or hereafter
 4             amended, and all amounts of  expenses  allocable  to
 5             interest  and   disallowed  as deductions by Section
 6             265(1) of the Internal Revenue Code of 1954, as  now
 7             or  hereafter  amended;  and  (ii) for taxable years
 8             ending  on  or  after  August  13,  1999,   Sections
 9             171(a)(2),  265,  280C,  and  832(b)(5)(B)(i) of the
10             Internal  Revenue  Code;  the  provisions  of   this
11             subparagraph  are  exempt  from  the  provisions  of
12             Section 250;
13                  (N)  An amount equal to all amounts included in
14             such  total  which  are exempt from taxation by this
15             State  either  by  reason   of   its   statutes   or
16             Constitution  or  by  reason  of  the  Constitution,
17             treaties  or statutes of the United States; provided
18             that, in the case of any statute of this State  that
19             exempts   income   derived   from   bonds  or  other
20             obligations from the tax imposed under this Act, the
21             amount exempted shall be the interest  net  of  bond
22             premium amortization;
23                  (O)  An  amount  equal to any contribution made
24             to a job training project  established  pursuant  to
25             the Tax Increment Allocation Redevelopment Act;
26                  (P)  An  amount  equal  to  the  amount  of the
27             deduction used to compute  the  federal  income  tax
28             credit  for  restoration of substantial amounts held
29             under claim of right for the taxable  year  pursuant
30             to  Section  1341  of  the  Internal Revenue Code of
31             1986;
32                  (Q)  An amount equal to any amounts included in
33             such  total,  received  by  the   taxpayer   as   an
34             acceleration  in  the  payment of life, endowment or
 
                            -6-                LRB9210132SMdv
 1             annuity benefits in advance of the time  they  would
 2             otherwise  be payable as an indemnity for a terminal
 3             illness;
 4                  (R)  An amount  equal  to  the  amount  of  any
 5             federal  or  State  bonus  paid  to  veterans of the
 6             Persian Gulf War;
 7                  (S)  An  amount,  to  the  extent  included  in
 8             adjusted gross income, equal  to  the  amount  of  a
 9             contribution  made  in the taxable year on behalf of
10             the taxpayer  to  a  medical  care  savings  account
11             established  under  the Medical Care Savings Account
12             Act or the Medical Care Savings Account Act of  2000
13             to  the  extent  the contribution is accepted by the
14             account administrator as provided in that Act;
15                  (T)  An  amount,  to  the  extent  included  in
16             adjusted  gross  income,  equal  to  the  amount  of
17             interest earned in the taxable  year  on  a  medical
18             care  savings  account established under the Medical
19             Care Savings Account Act or the Medical Care Savings
20             Account Act of 2000 on behalf of the taxpayer, other
21             than interest added pursuant to item (D-5)  of  this
22             paragraph (2);
23                  (U)  For one taxable year beginning on or after
24             January 1, 1994, an amount equal to the total amount
25             of  tax  imposed  and paid under subsections (a) and
26             (b) of Section 201 of  this  Act  on  grant  amounts
27             received  by  the  taxpayer  under  the Nursing Home
28             Grant Assistance Act during the  taxpayer's  taxable
29             years 1992 and 1993;
30                  (V)  Beginning  with  tax  years  ending  on or
31             after December 31, 1995 and ending  with  tax  years
32             ending  on  or  before  December 31, 2004, an amount
33             equal to the amount paid by  a  taxpayer  who  is  a
34             self-employed  taxpayer, a partner of a partnership,
 
                            -7-                LRB9210132SMdv
 1             or a shareholder in a Subchapter S  corporation  for
 2             health  insurance  or  long-term  care insurance for
 3             that  taxpayer  or   that   taxpayer's   spouse   or
 4             dependents,  to  the extent that the amount paid for
 5             that health insurance or  long-term  care  insurance
 6             may  be  deducted  under Section 213 of the Internal
 7             Revenue Code of 1986, has not been deducted  on  the
 8             federal  income tax return of the taxpayer, and does
 9             not exceed the taxable income attributable  to  that
10             taxpayer's   income,   self-employment   income,  or
11             Subchapter S  corporation  income;  except  that  no
12             deduction  shall  be  allowed under this item (V) if
13             the taxpayer  is  eligible  to  participate  in  any
14             health insurance or long-term care insurance plan of
15             an  employer  of  the  taxpayer  or  the  taxpayer's
16             spouse.   The  amount  of  the  health insurance and
17             long-term care insurance subtracted under this  item
18             (V)  shall be determined by multiplying total health
19             insurance and long-term care insurance premiums paid
20             by the taxpayer times a number that  represents  the
21             fractional  percentage  of eligible medical expenses
22             under Section 213 of the Internal  Revenue  Code  of
23             1986 not actually deducted on the taxpayer's federal
24             income tax return;
25                  (W)  For  taxable  years  beginning on or after
26             January  1,  1998,  all  amounts  included  in   the
27             taxpayer's  federal gross income in the taxable year
28             from amounts converted from a regular IRA to a  Roth
29             IRA. This paragraph is exempt from the provisions of
30             Section 250;
31                  (X)  For  taxable  year 1999 and thereafter, an
32             amount equal to the amount of any (i) distributions,
33             to the extent includible in gross income for federal
34             income tax purposes, made to the taxpayer because of
 
                            -8-                LRB9210132SMdv
 1             his or her status as a  victim  of  persecution  for
 2             racial  or  religious reasons by Nazi Germany or any
 3             other Axis regime or as an heir of  the  victim  and
 4             (ii)  items  of  income, to the extent includible in
 5             gross  income  for  federal  income  tax   purposes,
 6             attributable  to, derived from or in any way related
 7             to assets stolen from,  hidden  from,  or  otherwise
 8             lost  to  a  victim  of  persecution  for  racial or
 9             religious reasons by Nazi Germany or any other  Axis
10             regime immediately prior to, during, and immediately
11             after  World  War II, including, but not limited to,
12             interest on the  proceeds  receivable  as  insurance
13             under policies issued to a victim of persecution for
14             racial  or  religious reasons by Nazi Germany or any
15             other Axis regime by  European  insurance  companies
16             immediately  prior  to  and  during  World  War  II;
17             provided,  however,  this  subtraction  from federal
18             adjusted gross  income  does  not  apply  to  assets
19             acquired  with such assets or with the proceeds from
20             the sale of such  assets;  provided,  further,  this
21             paragraph shall only apply to a taxpayer who was the
22             first  recipient of such assets after their recovery
23             and who is a victim of  persecution  for  racial  or
24             religious  reasons by Nazi Germany or any other Axis
25             regime or as an heir of the victim.  The  amount  of
26             and  the  eligibility  for  any  public  assistance,
27             benefit,  or  similar entitlement is not affected by
28             the  inclusion  of  items  (i)  and  (ii)  of   this
29             paragraph  in  gross  income  for federal income tax
30             purposes.  This  paragraph  is   exempt   from   the
31             provisions of Section 250; and
32                  (Y)  For  taxable  years  beginning on or after
33             January 1, 2002, moneys contributed in  the  taxable
34             year to a College Savings Pool account under Section
 
                            -9-                LRB9210132SMdv
 1             16.5  of the State Treasurer Act.  This subparagraph
 2             (Y) is exempt from the provisions  of  Section  250;
 3             and
 4                  (Z)  For  taxable  years  ending  on  or  after
 5             December  31,  2001  and  on  or before December 31,
 6             2002, moneys contributed during  the  taxable  year,
 7             but   on   or  after  September  11,  2001,  to  any
 8             charitable organization that  is  a  member  of  the
 9             American   Liberty   Partnership  or  its  successor
10             partnership or organization consisting of charitable
11             organizations dedicated to coordinating  the  relief
12             effort  for victims of the September 11, 2001 attack
13             on the United States.

14        (b)  Corporations.
15             (1)  In general.  In the case of a corporation, base
16        income means an amount equal to  the  taxpayer's  taxable
17        income for the taxable year as modified by paragraph (2).
18             (2)  Modifications.   The taxable income referred to
19        in paragraph (1) shall be modified by adding thereto  the
20        sum of the following amounts:
21                  (A)  An  amount  equal  to  all amounts paid or
22             accrued  to  the  taxpayer  as  interest   and   all
23             distributions  received  from  regulated  investment
24             companies  during  the  taxable  year  to the extent
25             excluded from gross income  in  the  computation  of
26             taxable income;
27                  (B)  An  amount  equal  to  the  amount  of tax
28             imposed by this Act  to  the  extent  deducted  from
29             gross  income  in  the computation of taxable income
30             for the taxable year;
31                  (C)  In the  case  of  a  regulated  investment
32             company,  an  amount  equal to the excess of (i) the
33             net long-term capital gain  for  the  taxable  year,
34             over  (ii)  the amount of the capital gain dividends
 
                            -10-               LRB9210132SMdv
 1             designated  as  such  in  accordance  with   Section
 2             852(b)(3)(C)  of  the  Internal Revenue Code and any
 3             amount designated under Section 852(b)(3)(D) of  the
 4             Internal  Revenue  Code, attributable to the taxable
 5             year (this amendatory Act of 1995 (Public Act 89-89)
 6             is declarative of existing law  and  is  not  a  new
 7             enactment);
 8                  (D)  The  amount  of  any  net  operating  loss
 9             deduction taken in arriving at taxable income, other
10             than  a  net  operating  loss carried forward from a
11             taxable year ending prior to December 31, 1986;
12                  (E)  For taxable years in which a net operating
13             loss carryback or carryforward from a  taxable  year
14             ending  prior  to December 31, 1986 is an element of
15             taxable income under paragraph (1) of subsection (e)
16             or subparagraph (E) of paragraph (2)  of  subsection
17             (e),  the  amount  by  which  addition modifications
18             other than those provided by this  subparagraph  (E)
19             exceeded  subtraction  modifications in such earlier
20             taxable year, with the following limitations applied
21             in the order that they are listed:
22                       (i)  the addition modification relating to
23                  the net operating loss carried back or  forward
24                  to  the  taxable  year  from  any  taxable year
25                  ending prior to  December  31,  1986  shall  be
26                  reduced  by the amount of addition modification
27                  under this subparagraph (E)  which  related  to
28                  that  net  operating  loss  and which was taken
29                  into account in calculating the base income  of
30                  an earlier taxable year, and
31                       (ii)  the  addition  modification relating
32                  to the  net  operating  loss  carried  back  or
33                  forward  to  the  taxable year from any taxable
34                  year ending prior to December  31,  1986  shall
 
                            -11-               LRB9210132SMdv
 1                  not  exceed  the  amount  of  such carryback or
 2                  carryforward;
 3                  For taxable years  in  which  there  is  a  net
 4             operating  loss  carryback or carryforward from more
 5             than one other taxable year ending prior to December
 6             31, 1986, the addition modification provided in this
 7             subparagraph (E) shall be the  sum  of  the  amounts
 8             computed    independently    under   the   preceding
 9             provisions of this subparagraph (E)  for  each  such
10             taxable year; and
11                  (E-5)  For  taxable years ending after December
12             31,  1997,  an  amount   equal   to   any   eligible
13             remediation  costs  that the corporation deducted in
14             computing adjusted gross income and  for  which  the
15             corporation  claims a credit under subsection (l) of
16             Section 201;
17        and by deducting from the total so obtained  the  sum  of
18        the following amounts:
19                  (F)  An  amount  equal to the amount of any tax
20             imposed by  this  Act  which  was  refunded  to  the
21             taxpayer  and included in such total for the taxable
22             year;
23                  (G)  An amount equal to any amount included  in
24             such  total under Section 78 of the Internal Revenue
25             Code;
26                  (H)  In the  case  of  a  regulated  investment
27             company,  an  amount  equal  to the amount of exempt
28             interest dividends as defined in subsection (b)  (5)
29             of Section 852 of the Internal Revenue Code, paid to
30             shareholders for the taxable year;
31                  (I)  With   the   exception   of   any  amounts
32             subtracted under subparagraph (J), an  amount  equal
33             to  the  sum of all amounts disallowed as deductions
34             by  (i)  Sections  171(a)  (2),  and  265(a)(2)  and
 
                            -12-               LRB9210132SMdv
 1             amounts disallowed as interest  expense  by  Section
 2             291(a)(3)  of  the  Internal Revenue Code, as now or
 3             hereafter  amended,  and  all  amounts  of  expenses
 4             allocable to interest and disallowed  as  deductions
 5             by  Section  265(a)(1) of the Internal Revenue Code,
 6             as now or hereafter amended; and  (ii)  for  taxable
 7             years  ending  on or after August 13, 1999, Sections
 8             171(a)(2), 265, 280C, 291(a)(3), and 832(b)(5)(B)(i)
 9             of the Internal Revenue Code; the provisions of this
10             subparagraph  are  exempt  from  the  provisions  of
11             Section 250;
12                  (J)  An amount equal to all amounts included in
13             such total which are exempt from  taxation  by  this
14             State   either   by   reason   of  its  statutes  or
15             Constitution  or  by  reason  of  the  Constitution,
16             treaties or statutes of the United States;  provided
17             that,  in the case of any statute of this State that
18             exempts  income  derived   from   bonds   or   other
19             obligations from the tax imposed under this Act, the
20             amount  exempted  shall  be the interest net of bond
21             premium amortization;
22                  (K)  An  amount  equal   to   those   dividends
23             included   in  such  total  which  were  paid  by  a
24             corporation which conducts business operations in an
25             Enterprise Zone or zones created under the  Illinois
26             Enterprise  Zone  Act and conducts substantially all
27             of its operations in an Enterprise Zone or zones;
28                  (L)  An  amount  equal   to   those   dividends
29             included   in   such  total  that  were  paid  by  a
30             corporation that conducts business operations  in  a
31             federally  designated Foreign Trade Zone or Sub-Zone
32             and  that  is  designated  a  High  Impact  Business
33             located  in  Illinois;   provided   that   dividends
34             eligible  for the deduction provided in subparagraph
 
                            -13-               LRB9210132SMdv
 1             (K) of paragraph 2 of this subsection shall  not  be
 2             eligible  for  the  deduction  provided  under  this
 3             subparagraph (L);
 4                  (M)  For  any  taxpayer  that  is  a  financial
 5             organization within the meaning of Section 304(c) of
 6             this  Act,  an  amount  included  in  such  total as
 7             interest income from a loan or loans  made  by  such
 8             taxpayer  to  a  borrower, to the extent that such a
 9             loan is secured by property which  is  eligible  for
10             the Enterprise Zone Investment Credit.  To determine
11             the  portion  of  a loan or loans that is secured by
12             property eligible for a  Section  201(f)  investment
13             credit  to the borrower, the entire principal amount
14             of the loan or loans between the  taxpayer  and  the
15             borrower  should  be  divided  into the basis of the
16             Section  201(f)  investment  credit  property  which
17             secures the loan or loans, using  for  this  purpose
18             the original basis of such property on the date that
19             it  was  placed  in  service in the Enterprise Zone.
20             The subtraction modification available  to  taxpayer
21             in  any  year  under  this  subsection shall be that
22             portion of the total interest paid by  the  borrower
23             with  respect  to  such  loan  attributable  to  the
24             eligible  property  as calculated under the previous
25             sentence;
26                  (M-1)  For any taxpayer  that  is  a  financial
27             organization within the meaning of Section 304(c) of
28             this  Act,  an  amount  included  in  such  total as
29             interest income from a loan or loans  made  by  such
30             taxpayer  to  a  borrower, to the extent that such a
31             loan is secured by property which  is  eligible  for
32             the  High  Impact  Business  Investment  Credit.  To
33             determine the portion of a loan  or  loans  that  is
34             secured  by  property  eligible for a Section 201(h)
 
                            -14-               LRB9210132SMdv
 1             investment  credit  to  the  borrower,  the   entire
 2             principal  amount  of  the loan or loans between the
 3             taxpayer and the borrower should be divided into the
 4             basis  of  the  Section  201(h)  investment   credit
 5             property  which secures the loan or loans, using for
 6             this purpose the original basis of such property  on
 7             the  date  that  it  was  placed  in  service  in  a
 8             federally  designated Foreign Trade Zone or Sub-Zone
 9             located in Illinois.  No taxpayer that  is  eligible
10             for  the  deduction  provided in subparagraph (M) of
11             paragraph (2) of this subsection shall  be  eligible
12             for  the  deduction provided under this subparagraph
13             (M-1).  The subtraction  modification  available  to
14             taxpayers in any year under this subsection shall be
15             that  portion  of  the  total  interest  paid by the
16             borrower with respect to such loan  attributable  to
17             the   eligible  property  as  calculated  under  the
18             previous sentence;
19                  (N)  Two times any contribution made during the
20             taxable year to a designated  zone  organization  to
21             the  extent that the contribution (i) qualifies as a
22             charitable  contribution  under  subsection  (c)  of
23             Section 170 of the Internal Revenue  Code  and  (ii)
24             must,  by  its terms, be used for a project approved
25             by the Department of Commerce and Community  Affairs
26             under  Section  11  of  the Illinois Enterprise Zone
27             Act;
28                  (O)  An amount equal to: (i)  85%  for  taxable
29             years  ending  on or before December 31, 1992, or, a
30             percentage equal to the percentage  allowable  under
31             Section  243(a)(1)  of  the Internal Revenue Code of
32             1986 for taxable years  ending  after  December  31,
33             1992,  of  the amount by which dividends included in
34             taxable income and received from a corporation  that
 
                            -15-               LRB9210132SMdv
 1             is  not  created  or organized under the laws of the
 2             United States or any state or political  subdivision
 3             thereof,  including,  for taxable years ending on or
 4             after  December  31,  1988,  dividends  received  or
 5             deemed  received  or  paid  or  deemed  paid   under
 6             Sections  951  through  964  of the Internal Revenue
 7             Code, exceed the amount of the modification provided
 8             under subparagraph (G)  of  paragraph  (2)  of  this
 9             subsection  (b)  which is related to such dividends;
10             plus (ii) 100% of the  amount  by  which  dividends,
11             included  in taxable income and received, including,
12             for taxable years ending on or  after  December  31,
13             1988,  dividends received or deemed received or paid
14             or deemed paid under Sections 951 through 964 of the
15             Internal Revenue Code,  from  any  such  corporation
16             specified  in  clause  (i)  that  would  but for the
17             provisions of Section 1504 (b) (3) of  the  Internal
18             Revenue   Code   be  treated  as  a  member  of  the
19             affiliated  group  which   includes   the   dividend
20             recipient,  exceed  the  amount  of the modification
21             provided under subparagraph (G) of paragraph (2)  of
22             this   subsection  (b)  which  is  related  to  such
23             dividends;
24                  (P)  An amount equal to any  contribution  made
25             to  a  job  training project established pursuant to
26             the Tax Increment Allocation Redevelopment Act;
27                  (Q)  An amount  equal  to  the  amount  of  the
28             deduction  used  to  compute  the federal income tax
29             credit for restoration of substantial  amounts  held
30             under  claim  of right for the taxable year pursuant
31             to Section 1341 of  the  Internal  Revenue  Code  of
32             1986;
33                  (R)  In  the  case  of an attorney-in-fact with
34             respect to whom  an  interinsurer  or  a  reciprocal
 
                            -16-               LRB9210132SMdv
 1             insurer  has  made the election under Section 835 of
 2             the Internal Revenue Code, 26 U.S.C. 835, an  amount
 3             equal  to the excess, if any, of the amounts paid or
 4             incurred by that interinsurer or reciprocal  insurer
 5             in the taxable year to the attorney-in-fact over the
 6             deduction allowed to that interinsurer or reciprocal
 7             insurer  with  respect to the attorney-in-fact under
 8             Section 835(b) of the Internal Revenue Code for  the
 9             taxable year; and
10                  (S)  For  taxable  years  ending  on  or  after
11             December  31,  1997,  in  the case of a Subchapter S
12             corporation, an  amount  equal  to  all  amounts  of
13             income  allocable  to  a  shareholder subject to the
14             Personal Property Tax Replacement Income Tax imposed
15             by subsections (c) and (d) of Section  201  of  this
16             Act,  including  amounts  allocable to organizations
17             exempt from federal income tax by reason of  Section
18             501(a)   of   the   Internal   Revenue  Code.   This
19             subparagraph (S) is exempt from  the  provisions  of
20             Section 250; and
21                  (T)  For  taxable  years  ending  on  or  after
22             December  31,  2001  and  on  or before December 31,
23             2002, moneys contributed during  the  taxable  year,
24             but   on   or  after  September  11,  2001,  to  any
25             charitable organization that  is  a  member  of  the
26             American   Liberty   Partnership  or  its  successor
27             partnership or organization consisting of charitable
28             organizations dedicated to coordinating  the  relief
29             effort  for victims of the September 11, 2001 attack
30             on the United States.
31             (3)  Special rule.  For purposes  of  paragraph  (2)
32        (A),  "gross  income"  in  the  case  of a life insurance
33        company, for tax years ending on and after  December  31,
34        1994,  shall  mean  the  gross  investment income for the
 
                            -17-               LRB9210132SMdv
 1        taxable year.

 2        (c)  Trusts and estates.
 3             (1)  In general.  In the case of a trust or  estate,
 4        base  income  means  an  amount  equal  to the taxpayer's
 5        taxable income  for  the  taxable  year  as  modified  by
 6        paragraph (2).
 7             (2)  Modifications.   Subject  to  the provisions of
 8        paragraph  (3),  the  taxable  income  referred   to   in
 9        paragraph (1) shall be modified by adding thereto the sum
10        of the following amounts:
11                  (A)  An  amount  equal  to  all amounts paid or
12             accrued to the taxpayer  as  interest  or  dividends
13             during  the taxable year to the extent excluded from
14             gross income in the computation of taxable income;
15                  (B)  In the case of (i) an estate, $600; (ii) a
16             trust which,  under  its  governing  instrument,  is
17             required  to distribute all of its income currently,
18             $300; and (iii) any other trust, $100, but  in  each
19             such  case,  only  to  the  extent  such  amount was
20             deducted in the computation of taxable income;
21                  (C)  An amount  equal  to  the  amount  of  tax
22             imposed  by  this  Act  to  the extent deducted from
23             gross income in the computation  of  taxable  income
24             for the taxable year;
25                  (D)  The  amount  of  any  net  operating  loss
26             deduction taken in arriving at taxable income, other
27             than  a  net  operating  loss carried forward from a
28             taxable year ending prior to December 31, 1986;
29                  (E)  For taxable years in which a net operating
30             loss carryback or carryforward from a  taxable  year
31             ending  prior  to December 31, 1986 is an element of
32             taxable income under paragraph (1) of subsection (e)
33             or subparagraph (E) of paragraph (2)  of  subsection
34             (e),  the  amount  by  which  addition modifications
 
                            -18-               LRB9210132SMdv
 1             other than those provided by this  subparagraph  (E)
 2             exceeded  subtraction  modifications in such taxable
 3             year, with the following limitations applied in  the
 4             order that they are listed:
 5                       (i)  the addition modification relating to
 6                  the  net operating loss carried back or forward
 7                  to the  taxable  year  from  any  taxable  year
 8                  ending  prior  to  December  31,  1986 shall be
 9                  reduced by the amount of addition  modification
10                  under  this  subparagraph  (E) which related to
11                  that net operating loss  and  which  was  taken
12                  into  account in calculating the base income of
13                  an earlier taxable year, and
14                       (ii)  the addition  modification  relating
15                  to  the  net  operating  loss  carried  back or
16                  forward to the taxable year  from  any  taxable
17                  year  ending  prior  to December 31, 1986 shall
18                  not exceed the  amount  of  such  carryback  or
19                  carryforward;
20                  For  taxable  years  in  which  there  is a net
21             operating loss carryback or carryforward  from  more
22             than one other taxable year ending prior to December
23             31, 1986, the addition modification provided in this
24             subparagraph  (E)  shall  be  the sum of the amounts
25             computed   independently   under    the    preceding
26             provisions  of  this  subparagraph (E) for each such
27             taxable year;
28                  (F)  For  taxable  years  ending  on  or  after
29             January 1, 1989, an amount equal to the tax deducted
30             pursuant to Section 164 of the Internal Revenue Code
31             if the trust or estate is claiming the same tax  for
32             purposes  of  the  Illinois foreign tax credit under
33             Section 601 of this Act;
34                  (G)  An amount  equal  to  the  amount  of  the
 
                            -19-               LRB9210132SMdv
 1             capital  gain deduction allowable under the Internal
 2             Revenue Code, to  the  extent  deducted  from  gross
 3             income in the computation of taxable income; and
 4                  (G-5)  For  taxable years ending after December
 5             31,  1997,  an  amount   equal   to   any   eligible
 6             remediation  costs that the trust or estate deducted
 7             in computing adjusted gross income and for which the
 8             trust or estate claims a credit under subsection (l)
 9             of Section 201;
10        and by deducting from the total so obtained  the  sum  of
11        the following amounts:
12                  (H)  An amount equal to all amounts included in
13             such  total  pursuant  to the provisions of Sections
14             402(a), 402(c), 403(a), 403(b), 406(a),  407(a)  and
15             408 of the Internal Revenue Code or included in such
16             total  as  distributions under the provisions of any
17             retirement or disability plan for employees  of  any
18             governmental  agency or unit, or retirement payments
19             to retired partners, which payments are excluded  in
20             computing  net  earnings  from  self  employment  by
21             Section  1402  of  the  Internal  Revenue  Code  and
22             regulations adopted pursuant thereto;
23                  (I)  The valuation limitation amount;
24                  (J)  An  amount  equal to the amount of any tax
25             imposed by  this  Act  which  was  refunded  to  the
26             taxpayer  and included in such total for the taxable
27             year;
28                  (K)  An amount equal to all amounts included in
29             taxable income as  modified  by  subparagraphs  (A),
30             (B),  (C),  (D),  (E),  (F) and (G) which are exempt
31             from taxation by this State either by reason of  its
32             statutes   or  Constitution  or  by  reason  of  the
33             Constitution, treaties or  statutes  of  the  United
34             States; provided that, in the case of any statute of
 
                            -20-               LRB9210132SMdv
 1             this State that exempts income derived from bonds or
 2             other  obligations  from  the tax imposed under this
 3             Act, the amount exempted shall be the  interest  net
 4             of bond premium amortization;
 5                  (L)  With   the   exception   of   any  amounts
 6             subtracted under subparagraph (K), an  amount  equal
 7             to  the  sum of all amounts disallowed as deductions
 8             by (i) Sections 171(a)  (2)  and  265(a)(2)  of  the
 9             Internal  Revenue Code, as now or hereafter amended,
10             and all amounts of expenses  allocable  to  interest
11             and  disallowed  as  deductions by Section 265(1) of
12             the  Internal  Revenue  Code  of  1954,  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                  (M)  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 and conducts substantially all
23             of its operations in an Enterprise Zone or Zones;
24                  (N)  An amount equal to any  contribution  made
25             to  a  job  training project established pursuant to
26             the Tax Increment Allocation Redevelopment Act;
27                  (O)  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             (M) of paragraph (2) of this subsection shall not be
 
                            -21-               LRB9210132SMdv
 1             eligible  for  the  deduction  provided  under  this
 2             subparagraph (O);
 3                  (P)  An amount  equal  to  the  amount  of  the
 4             deduction  used  to  compute  the federal income tax
 5             credit for restoration of substantial  amounts  held
 6             under  claim  of right for the taxable year pursuant
 7             to Section 1341 of  the  Internal  Revenue  Code  of
 8             1986; and
 9                  (Q)  For  taxable  year 1999 and thereafter, an
10             amount equal to the amount of any (i) distributions,
11             to the extent includible in gross income for federal
12             income tax purposes, made to the taxpayer because of
13             his or her status as a  victim  of  persecution  for
14             racial  or  religious reasons by Nazi Germany or any
15             other Axis regime or as an heir of  the  victim  and
16             (ii)  items  of  income, to the extent includible in
17             gross  income  for  federal  income  tax   purposes,
18             attributable  to, derived from or in any way related
19             to assets stolen from,  hidden  from,  or  otherwise
20             lost  to  a  victim  of  persecution  for  racial or
21             religious reasons by Nazi Germany or any other  Axis
22             regime immediately prior to, during, and immediately
23             after  World  War II, including, but not limited to,
24             interest on the  proceeds  receivable  as  insurance
25             under policies issued to a victim of persecution for
26             racial  or  religious reasons by Nazi Germany or any
27             other Axis regime by  European  insurance  companies
28             immediately  prior  to  and  during  World  War  II;
29             provided,  however,  this  subtraction  from federal
30             adjusted gross  income  does  not  apply  to  assets
31             acquired  with such assets or with the proceeds from
32             the sale of such  assets;  provided,  further,  this
33             paragraph shall only apply to a taxpayer who was the
34             first  recipient of such assets after their recovery
 
                            -22-               LRB9210132SMdv
 1             and who is a victim of  persecution  for  racial  or
 2             religious  reasons by Nazi Germany or any other Axis
 3             regime or as an heir of the victim.  The  amount  of
 4             and  the  eligibility  for  any  public  assistance,
 5             benefit,  or  similar entitlement is not affected by
 6             the  inclusion  of  items  (i)  and  (ii)  of   this
 7             paragraph  in  gross  income  for federal income tax
 8             purposes.  This  paragraph  is   exempt   from   the
 9             provisions of Section 250; and
10                  (R)  For  taxable  years  ending  on  or  after
11             December  31,  2001  and  on  or before December 31,
12             2002, moneys contributed during  the  taxable  year,
13             but   on   or  after  September  11,  2001,  to  any
14             charitable organization that  is  a  member  of  the
15             American   Liberty   Partnership  or  its  successor
16             partnership or organization consisting of charitable
17             organizations dedicated to coordinating  the  relief
18             effort  for victims of the September 11, 2001 attack
19             on the United States.
20             (3)  Limitation.  The  amount  of  any  modification
21        otherwise  required  under  this  subsection shall, under
22        regulations prescribed by the Department, be adjusted  by
23        any  amounts  included  therein which were properly paid,
24        credited, or required to be distributed,  or  permanently
25        set  aside  for charitable purposes pursuant  to Internal
26        Revenue Code Section 642(c) during the taxable year.

27        (d)  Partnerships.
28             (1)  In general. In the case of a partnership,  base
29        income  means  an  amount equal to the taxpayer's taxable
30        income for the taxable year as modified by paragraph (2).
31             (2)  Modifications. The taxable income  referred  to
32        in  paragraph (1) shall be modified by adding thereto the
33        sum of the following amounts:
34                  (A)  An amount equal to  all  amounts  paid  or
 
                            -23-               LRB9210132SMdv
 1             accrued  to  the  taxpayer  as interest or dividends
 2             during the taxable year to the extent excluded  from
 3             gross income in the computation of taxable income;
 4                  (B)  An  amount  equal  to  the  amount  of tax
 5             imposed by this Act  to  the  extent  deducted  from
 6             gross income for the taxable year;
 7                  (C)  The  amount  of  deductions allowed to the
 8             partnership pursuant  to  Section  707  (c)  of  the
 9             Internal  Revenue  Code  in  calculating its taxable
10             income; and
11                  (D)  An amount  equal  to  the  amount  of  the
12             capital  gain deduction allowable under the Internal
13             Revenue Code, to  the  extent  deducted  from  gross
14             income in the computation of taxable income;
15        and by deducting from the total so obtained the following
16        amounts:
17                  (E)  The valuation limitation amount;
18                  (F)  An  amount  equal to the amount of any tax
19             imposed by  this  Act  which  was  refunded  to  the
20             taxpayer  and included in such total for the taxable
21             year;
22                  (G)  An amount equal to all amounts included in
23             taxable income as  modified  by  subparagraphs  (A),
24             (B),  (C)  and (D) which are exempt from taxation by
25             this State either  by  reason  of  its  statutes  or
26             Constitution  or  by  reason  of  the  Constitution,
27             treaties  or statutes of the United States; provided
28             that, in the case of any statute of this State  that
29             exempts   income   derived   from   bonds  or  other
30             obligations from the tax imposed under this Act, the
31             amount exempted shall be the interest  net  of  bond
32             premium amortization;
33                  (H)  Any   income   of  the  partnership  which
34             constitutes personal service income  as  defined  in
 
                            -24-               LRB9210132SMdv
 1             Section  1348  (b)  (1) of the Internal Revenue Code
 2             (as in effect December 31,  1981)  or  a  reasonable
 3             allowance  for  compensation  paid  or  accrued  for
 4             services  rendered  by  partners to the partnership,
 5             whichever is greater;
 6                  (I)  An amount equal to all amounts  of  income
 7             distributable  to  an entity subject to the Personal
 8             Property  Tax  Replacement  Income  Tax  imposed  by
 9             subsections (c) and (d) of Section 201 of  this  Act
10             including  amounts  distributable  to  organizations
11             exempt  from federal income tax by reason of Section
12             501(a) of the Internal Revenue Code;
13                  (J)  With  the   exception   of   any   amounts
14             subtracted  under  subparagraph (G), an amount equal
15             to the sum of all amounts disallowed  as  deductions
16             by  (i)  Sections  171(a)  (2),  and  265(2)  of the
17             Internal Revenue Code of 1954, as now  or  hereafter
18             amended,  and  all  amounts of expenses allocable to
19             interest and disallowed  as  deductions  by  Section
20             265(1)  of  the  Internal  Revenue  Code,  as now or
21             hereafter amended; and (ii) for taxable years ending
22             on or after August  13,  1999,  Sections  171(a)(2),
23             265,  280C,  and  832(b)(5)(B)(i)  of  the  Internal
24             Revenue  Code;  the  provisions of this subparagraph
25             are exempt from the provisions of Section 250;
26                  (K)  An  amount  equal   to   those   dividends
27             included   in  such  total  which  were  paid  by  a
28             corporation which conducts business operations in an
29             Enterprise Zone or zones created under the  Illinois
30             Enterprise  Zone  Act,  enacted  by the 82nd General
31             Assembly, and which does not conduct such operations
32             other than in an Enterprise Zone or Zones;
33                  (L)  An amount equal to any  contribution  made
34             to  a  job  training project established pursuant to
 
                            -25-               LRB9210132SMdv
 1             the   Real   Property   Tax   Increment   Allocation
 2             Redevelopment Act;
 3                  (M)  An  amount  equal   to   those   dividends
 4             included   in   such  total  that  were  paid  by  a
 5             corporation that conducts business operations  in  a
 6             federally  designated Foreign Trade Zone or Sub-Zone
 7             and  that  is  designated  a  High  Impact  Business
 8             located  in  Illinois;   provided   that   dividends
 9             eligible  for the deduction provided in subparagraph
10             (K) of paragraph (2) of this subsection shall not be
11             eligible  for  the  deduction  provided  under  this
12             subparagraph (M); and
13                  (N)  An amount  equal  to  the  amount  of  the
14             deduction  used  to  compute  the federal income tax
15             credit for restoration of substantial  amounts  held
16             under  claim  of right for the taxable year pursuant
17             to Section 1341 of  the  Internal  Revenue  Code  of
18             1986; and
19                  (O)  For  taxable  years  ending  on  or  after
20             December  31,  2001  and  on  or before December 31,
21             2002, moneys contributed during  the  taxable  year,
22             but   on   or  after  September  11,  2001,  to  any
23             charitable organization that  is  a  member  of  the
24             American   Liberty   Partnership  or  its  successor
25             partnership or organization consisting of charitable
26             organizations dedicated to coordinating  the  relief
27             effort  for victims of the September 11, 2001 attack
28             on the United States.

29        (e)  Gross income; adjusted gross income; taxable income.
30             (1)  In  general.   Subject  to  the  provisions  of
31        paragraph (2) and subsection (b)  (3),  for  purposes  of
32        this  Section  and  Section  803(e),  a  taxpayer's gross
33        income, adjusted gross income, or taxable income for  the
34        taxable  year  shall  mean  the  amount  of gross income,
 
                            -26-               LRB9210132SMdv
 1        adjusted  gross  income  or   taxable   income   properly
 2        reportable  for  federal  income  tax  purposes  for  the
 3        taxable year under the provisions of the Internal Revenue
 4        Code.  Taxable income may be less than zero. However, for
 5        taxable years ending on or after December 31,  1986,  net
 6        operating  loss  carryforwards  from taxable years ending
 7        prior to December 31, 1986, may not  exceed  the  sum  of
 8        federal  taxable  income  for the taxable year before net
 9        operating loss deduction, plus  the  excess  of  addition
10        modifications  over  subtraction  modifications  for  the
11        taxable year.  For taxable years ending prior to December
12        31, 1986, taxable income may never be an amount in excess
13        of the net operating loss for the taxable year as defined
14        in subsections (c) and (d) of Section 172 of the Internal
15        Revenue  Code,  provided  that  when  taxable income of a
16        corporation (other  than  a  Subchapter  S  corporation),
17        trust,   or   estate  is  less  than  zero  and  addition
18        modifications, other than those provided by  subparagraph
19        (E)  of  paragraph (2) of subsection (b) for corporations
20        or subparagraph (E) of paragraph (2)  of  subsection  (c)
21        for trusts and estates, exceed subtraction modifications,
22        an   addition  modification  must  be  made  under  those
23        subparagraphs for any other taxable  year  to  which  the
24        taxable  income  less  than  zero (net operating loss) is
25        applied under Section 172 of the Internal Revenue Code or
26        under  subparagraph  (E)  of  paragraph   (2)   of   this
27        subsection (e) applied in conjunction with Section 172 of
28        the Internal Revenue Code.
29             (2)  Special rule.  For purposes of paragraph (1) of
30        this  subsection,  the taxable income properly reportable
31        for federal income tax purposes shall mean:
32                  (A)  Certain life insurance companies.  In  the
33             case  of a life insurance company subject to the tax
34             imposed by Section 801 of the Internal Revenue Code,
 
                            -27-               LRB9210132SMdv
 1             life insurance  company  taxable  income,  plus  the
 2             amount  of  distribution  from pre-1984 policyholder
 3             surplus accounts as calculated under Section 815a of
 4             the Internal Revenue Code;
 5                  (B)  Certain other insurance companies.  In the
 6             case of mutual insurance companies  subject  to  the
 7             tax  imposed  by Section 831 of the Internal Revenue
 8             Code, insurance company taxable income;
 9                  (C)  Regulated investment  companies.   In  the
10             case  of  a  regulated investment company subject to
11             the tax imposed  by  Section  852  of  the  Internal
12             Revenue Code, investment company taxable income;
13                  (D)  Real  estate  investment  trusts.   In the
14             case of a real estate investment  trust  subject  to
15             the  tax  imposed  by  Section  857  of the Internal
16             Revenue Code, real estate investment  trust  taxable
17             income;
18                  (E)  Consolidated corporations.  In the case of
19             a  corporation  which  is  a member of an affiliated
20             group of corporations filing a  consolidated  income
21             tax  return  for the taxable year for federal income
22             tax purposes, taxable income determined as  if  such
23             corporation  had filed a separate return for federal
24             income tax purposes for the taxable  year  and  each
25             preceding  taxable year for which it was a member of
26             an  affiliated   group.   For   purposes   of   this
27             subparagraph, the taxpayer's separate taxable income
28             shall  be  determined as if the election provided by
29             Section 243(b) (2) of the Internal Revenue Code  had
30             been in effect for all such years;
31                  (F)  Cooperatives.     In   the   case   of   a
32             cooperative corporation or association, the  taxable
33             income of such organization determined in accordance
34             with  the provisions of Section 1381 through 1388 of
 
                            -28-               LRB9210132SMdv
 1             the Internal Revenue Code;
 2                  (G)  Subchapter S corporations.   In  the  case
 3             of:  (i)  a Subchapter S corporation for which there
 4             is in effect an election for the taxable year  under
 5             Section  1362  of  the  Internal  Revenue  Code, the
 6             taxable income of  such  corporation  determined  in
 7             accordance  with  Section  1363(b)  of  the Internal
 8             Revenue Code, except that taxable income shall  take
 9             into  account  those  items  which  are  required by
10             Section 1363(b)(1) of the Internal Revenue  Code  to
11             be  separately  stated;  and  (ii)  a  Subchapter  S
12             corporation  for  which there is in effect a federal
13             election  to  opt  out  of  the  provisions  of  the
14             Subchapter S Revision Act of 1982 and  have  applied
15             instead  the  prior federal Subchapter S rules as in
16             effect on July 1, 1982, the taxable income  of  such
17             corporation   determined   in  accordance  with  the
18             federal Subchapter S rules as in effect on  July  1,
19             1982; and
20                  (H)  Partnerships.     In   the   case   of   a
21             partnership, taxable income determined in accordance
22             with Section  703  of  the  Internal  Revenue  Code,
23             except  that  taxable income shall take into account
24             those items which are required by Section  703(a)(1)
25             to  be  separately  stated  but which would be taken
26             into account by an  individual  in  calculating  his
27             taxable income.

28        (f)  Valuation limitation amount.
29             (1)  In  general.   The  valuation limitation amount
30        referred to in subsections (a) (2) (G), (c) (2)  (I)  and
31        (d)(2) (E) is an amount equal to:
32                  (A)  The   sum   of   the  pre-August  1,  1969
33             appreciation amounts (to the  extent  consisting  of
34             gain reportable under the provisions of Section 1245
 
                            -29-               LRB9210132SMdv
 1             or  1250  of  the  Internal  Revenue  Code)  for all
 2             property in respect of which such gain was  reported
 3             for the taxable year; plus
 4                  (B)  The   lesser   of   (i)  the  sum  of  the
 5             pre-August 1,  1969  appreciation  amounts  (to  the
 6             extent  consisting of capital gain) for all property
 7             in respect of  which  such  gain  was  reported  for
 8             federal income tax purposes for the taxable year, or
 9             (ii)  the  net  capital  gain  for the taxable year,
10             reduced in either case by any amount  of  such  gain
11             included  in  the amount determined under subsection
12             (a) (2) (F) or (c) (2) (H).
13             (2)  Pre-August 1, 1969 appreciation amount.
14                  (A)  If  the  fair  market  value  of  property
15             referred   to   in   paragraph   (1)   was   readily
16             ascertainable on August 1, 1969, the  pre-August  1,
17             1969  appreciation  amount  for such property is the
18             lesser of (i) the excess of such fair  market  value
19             over the taxpayer's basis (for determining gain) for
20             such  property  on  that  date (determined under the
21             Internal Revenue Code as in effect on that date), or
22             (ii) the total  gain  realized  and  reportable  for
23             federal  income tax purposes in respect of the sale,
24             exchange or other disposition of such property.
25                  (B)  If  the  fair  market  value  of  property
26             referred  to  in  paragraph  (1)  was  not   readily
27             ascertainable  on  August 1, 1969, the pre-August 1,
28             1969 appreciation amount for such property  is  that
29             amount  which bears the same ratio to the total gain
30             reported in respect  of  the  property  for  federal
31             income  tax  purposes  for  the taxable year, as the
32             number of full calendar months in that part  of  the
33             taxpayer's  holding  period  for the property ending
34             July 31, 1969 bears to the number of  full  calendar
 
                            -30-               LRB9210132SMdv
 1             months  in  the taxpayer's entire holding period for
 2             the property.
 3                  (C)  The  Department   shall   prescribe   such
 4             regulations  as  may  be  necessary to carry out the
 5             purposes of this paragraph.

 6        (g)  Double  deductions.   Unless  specifically  provided
 7    otherwise, nothing in this Section shall permit the same item
 8    to be deducted more than once.

 9        (h)  Legislative intention.  Except as expressly provided
10    by  this  Section  there  shall  be   no   modifications   or
11    limitations on the amounts of income, gain, loss or deduction
12    taken  into  account  in  determining  gross income, adjusted
13    gross  income  or  taxable  income  for  federal  income  tax
14    purposes for the taxable year, or in the amount of such items
15    entering into the computation of base income and  net  income
16    under  this  Act for such taxable year, whether in respect of
17    property values as of August 1, 1969 or otherwise.
18    (Source: P.A. 91-192, eff.  7-20-99;  91-205,  eff.  7-20-99;
19    91-357,  eff.  7-29-99;  91-541,  eff.  8-13-99; 91-676, eff.
20    12-23-99; 91-845, eff. 6-22-00; 91-913, eff.  1-1-01;  92-16,
21    eff.  6-28-01;  92-244,  eff.  8-3-01;  92-439, eff. 8-17-01;
22    revised 9-21-01.)

23        Section 99.  Effective date.  This Act takes effect  upon
24    becoming law.

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