093_HB0054
LRB093 02308 SJM 02316 b
1 AN ACT in relation to taxes.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Income Tax Act is amended by
5 changing Section 203 as follows:
6 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
7 Sec. 203. Base income defined.
8 (a) Individuals.
9 (1) In general. In the case of an individual, base
10 income means an amount equal to the taxpayer's adjusted
11 gross income for the taxable year as modified by
12 paragraph (2).
13 (2) Modifications. The adjusted gross income
14 referred to in paragraph (1) shall be modified by adding
15 thereto the sum of the following amounts:
16 (A) An amount equal to all amounts paid or
17 accrued to the taxpayer as interest or dividends
18 during the taxable year to the extent excluded from
19 gross income in the computation of adjusted gross
20 income, except stock dividends of qualified public
21 utilities described in Section 305(e) of the
22 Internal Revenue Code;
23 (B) An amount equal to the amount of tax
24 imposed by this Act to the extent deducted from
25 gross income in the computation of adjusted gross
26 income for the taxable year;
27 (C) An amount equal to the amount received
28 during the taxable year as a recovery or refund of
29 real property taxes paid with respect to the
30 taxpayer's principal residence under the Revenue Act
31 of 1939 and for which a deduction was previously
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1 taken under subparagraph (L) of this paragraph (2)
2 prior to July 1, 1991, the retrospective application
3 date of Article 4 of Public Act 87-17. In the case
4 of multi-unit or multi-use structures and farm
5 dwellings, the taxes on the taxpayer's principal
6 residence shall be that portion of the total taxes
7 for the entire property which is attributable to
8 such principal residence;
9 (D) An amount equal to the amount of the
10 capital gain deduction allowable under the Internal
11 Revenue Code, to the extent deducted from gross
12 income in the computation of adjusted gross income;
13 (D-5) An amount, to the extent not included in
14 adjusted gross income, equal to the amount of money
15 withdrawn by the taxpayer in the taxable year from a
16 medical care savings account and the interest earned
17 on the account in the taxable year of a withdrawal
18 pursuant to subsection (b) of Section 20 of the
19 Medical Care Savings Account Act or subsection (b)
20 of Section 20 of the Medical Care Savings Account
21 Act of 2000;
22 (D-10) For taxable years ending after December
23 31, 1997, an amount equal to any eligible
24 remediation costs that the individual deducted in
25 computing adjusted gross income and for which the
26 individual claims a credit under subsection (l) of
27 Section 201;
28 (D-15) For taxable years 2001 and thereafter,
29 an amount equal to the bonus depreciation deduction
30 (30% of the adjusted basis of the qualified
31 property) taken on the taxpayer's federal income tax
32 return for the taxable year under subsection (k) of
33 Section 168 of the Internal Revenue Code; and
34 (D-16) If the taxpayer reports a capital gain
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1 or loss on the taxpayer's federal income tax return
2 for the taxable year based on a sale or transfer of
3 property for which the taxpayer was required in any
4 taxable year to make an addition modification under
5 subparagraph (D-15), then an amount equal to the
6 aggregate amount of the deductions taken in all
7 taxable years under subparagraph (Z) with respect to
8 that property.;
9 The taxpayer is required to make the addition
10 modification under this subparagraph only once with
11 respect to any one piece of property;. and
12 (D-20) (D-15) For taxable years beginning on
13 or after January 1, 2002, in the case of a
14 distribution from a qualified tuition program under
15 Section 529 of the Internal Revenue Code, other than
16 (i) a distribution from a College Savings Pool
17 created under Section 16.5 of the State Treasurer
18 Act or (ii) a distribution from the Illinois Prepaid
19 Tuition Trust Fund, an amount equal to the amount
20 excluded from gross income under Section
21 529(c)(3)(B);
22 and by deducting from the total so obtained the sum of
23 the following amounts:
24 (E) For taxable years ending before December
25 31, 2001, any amount included in such total in
26 respect of any compensation (including but not
27 limited to any compensation paid or accrued to a
28 serviceman while a prisoner of war or missing in
29 action) paid to a resident by reason of being on
30 active duty in the Armed Forces of the United States
31 and in respect of any compensation paid or accrued
32 to a resident who as a governmental employee was a
33 prisoner of war or missing in action, and in respect
34 of any compensation paid to a resident in 1971 or
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1 thereafter for annual training performed pursuant to
2 Sections 502 and 503, Title 32, United States Code
3 as a member of the Illinois National Guard. For
4 taxable years ending on or after December 31, 2001,
5 any amount included in such total in respect of any
6 compensation (including but not limited to any
7 compensation paid or accrued to a serviceman while a
8 prisoner of war or missing in action) paid to a
9 resident by reason of being a member of any
10 component of the Armed Forces of the United States
11 and in respect of any compensation paid or accrued
12 to a resident who as a governmental employee was a
13 prisoner of war or missing in action, and in respect
14 of any compensation paid to a resident in 2001 or
15 thereafter by reason of being a member of the
16 Illinois National Guard. The provisions of this
17 amendatory Act of the 92nd General Assembly are
18 exempt from the provisions of Section 250;
19 (F) An amount equal to all amounts included in
20 such total pursuant to the provisions of Sections
21 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
22 408 of the Internal Revenue Code, or included in
23 such total as distributions under the provisions of
24 any retirement or disability plan for employees of
25 any governmental agency or unit, or retirement
26 payments to retired partners, which payments are
27 excluded in computing net earnings from self
28 employment by Section 1402 of the Internal Revenue
29 Code and regulations adopted pursuant thereto;
30 (G) The valuation limitation amount;
31 (H) An amount equal to the amount of any tax
32 imposed by this Act which was refunded to the
33 taxpayer and included in such total for the taxable
34 year;
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1 (I) An amount equal to all amounts included in
2 such total pursuant to the provisions of Section 111
3 of the Internal Revenue Code as a recovery of items
4 previously deducted from adjusted gross income in
5 the computation of taxable income;
6 (J) An amount equal to those dividends
7 included in such total which were paid by a
8 corporation which conducts business operations in an
9 Enterprise Zone or zones created under the Illinois
10 Enterprise Zone Act, and conducts substantially all
11 of its operations in an Enterprise Zone or zones;
12 (K) An amount equal to those dividends
13 included in such total that were paid by a
14 corporation that conducts business operations in a
15 federally designated Foreign Trade Zone or Sub-Zone
16 and that is designated a High Impact Business
17 located in Illinois; provided that dividends
18 eligible for the deduction provided in subparagraph
19 (J) of paragraph (2) of this subsection shall not be
20 eligible for the deduction provided under this
21 subparagraph (K);
22 (L) For taxable years ending after December
23 31, 1983, an amount equal to all social security
24 benefits and railroad retirement benefits included
25 in such total pursuant to Sections 72(r) and 86 of
26 the Internal Revenue Code;
27 (M) With the exception of any amounts
28 subtracted under subparagraph (N), an amount equal
29 to the sum of all amounts disallowed as deductions
30 by (i) Sections 171(a) (2), and 265(2) of the
31 Internal Revenue Code of 1954, as now or hereafter
32 amended, and all amounts of expenses allocable to
33 interest and disallowed as deductions by Section
34 265(1) of the Internal Revenue Code of 1954, as now
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1 or hereafter amended; and (ii) for taxable years
2 ending on or after August 13, 1999, Sections
3 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
4 Internal Revenue Code; the provisions of this
5 subparagraph are exempt from the provisions of
6 Section 250;
7 (N) An amount equal to all amounts included in
8 such total which are exempt from taxation by this
9 State either by reason of its statutes or
10 Constitution or by reason of the Constitution,
11 treaties or statutes of the United States; provided
12 that, in the case of any statute of this State that
13 exempts income derived from bonds or other
14 obligations from the tax imposed under this Act, the
15 amount exempted shall be the interest net of bond
16 premium amortization;
17 (O) An amount equal to any contribution made
18 to a job training project established pursuant to
19 the Tax Increment Allocation Redevelopment Act;
20 (P) An amount equal to the amount of the
21 deduction used to compute the federal income tax
22 credit for restoration of substantial amounts held
23 under claim of right for the taxable year pursuant
24 to Section 1341 of the Internal Revenue Code of
25 1986;
26 (Q) An amount equal to any amounts included in
27 such total, received by the taxpayer as an
28 acceleration in the payment of life, endowment or
29 annuity benefits in advance of the time they would
30 otherwise be payable as an indemnity for a terminal
31 illness;
32 (R) An amount equal to the amount of any
33 federal or State bonus paid to veterans of the
34 Persian Gulf War;
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1 (S) An amount, to the extent included in
2 adjusted gross income, equal to the amount of a
3 contribution made in the taxable year on behalf of
4 the taxpayer to a medical care savings account
5 established under the Medical Care Savings Account
6 Act or the Medical Care Savings Account Act of 2000
7 to the extent the contribution is accepted by the
8 account administrator as provided in that Act;
9 (T) An amount, to the extent included in
10 adjusted gross income, equal to the amount of
11 interest earned in the taxable year on a medical
12 care savings account established under the Medical
13 Care Savings Account Act or the Medical Care Savings
14 Account Act of 2000 on behalf of the taxpayer, other
15 than interest added pursuant to item (D-5) of this
16 paragraph (2);
17 (U) For one taxable year beginning on or after
18 January 1, 1994, an amount equal to the total amount
19 of tax imposed and paid under subsections (a) and
20 (b) of Section 201 of this Act on grant amounts
21 received by the taxpayer under the Nursing Home
22 Grant Assistance Act during the taxpayer's taxable
23 years 1992 and 1993;
24 (V) Beginning with tax years ending on or
25 after December 31, 1995 and ending with tax years
26 ending on or before December 31, 2004, an amount
27 equal to the amount paid by a taxpayer who is a
28 self-employed taxpayer, a partner of a partnership,
29 or a shareholder in a Subchapter S corporation for
30 health insurance or long-term care insurance for
31 that taxpayer or that taxpayer's spouse or
32 dependents, to the extent that the amount paid for
33 that health insurance or long-term care insurance
34 may be deducted under Section 213 of the Internal
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1 Revenue Code of 1986, has not been deducted on the
2 federal income tax return of the taxpayer, and does
3 not exceed the taxable income attributable to that
4 taxpayer's income, self-employment income, or
5 Subchapter S corporation income; except that no
6 deduction shall be allowed under this item (V) if
7 the taxpayer is eligible to participate in any
8 health insurance or long-term care insurance plan of
9 an employer of the taxpayer or the taxpayer's
10 spouse. The amount of the health insurance and
11 long-term care insurance subtracted under this item
12 (V) shall be determined by multiplying total health
13 insurance and long-term care insurance premiums paid
14 by the taxpayer times a number that represents the
15 fractional percentage of eligible medical expenses
16 under Section 213 of the Internal Revenue Code of
17 1986 not actually deducted on the taxpayer's federal
18 income tax return;
19 (W) For taxable years beginning on or after
20 January 1, 1998, all amounts included in the
21 taxpayer's federal gross income in the taxable year
22 from amounts converted from a regular IRA to a Roth
23 IRA. This paragraph is exempt from the provisions of
24 Section 250;
25 (X) For taxable year 1999 and thereafter, an
26 amount equal to the amount of any (i) distributions,
27 to the extent includible in gross income for federal
28 income tax purposes, made to the taxpayer because of
29 his or her status as a victim of persecution for
30 racial or religious reasons by Nazi Germany or any
31 other Axis regime or as an heir of the victim and
32 (ii) items of income, to the extent includible in
33 gross income for federal income tax purposes,
34 attributable to, derived from or in any way related
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1 to assets stolen from, hidden from, or otherwise
2 lost to a victim of persecution for racial or
3 religious reasons by Nazi Germany or any other Axis
4 regime immediately prior to, during, and immediately
5 after World War II, including, but not limited to,
6 interest on the proceeds receivable as insurance
7 under policies issued to a victim of persecution for
8 racial or religious reasons by Nazi Germany or any
9 other Axis regime by European insurance companies
10 immediately prior to and during World War II;
11 provided, however, this subtraction from federal
12 adjusted gross income does not apply to assets
13 acquired with such assets or with the proceeds from
14 the sale of such assets; provided, further, this
15 paragraph shall only apply to a taxpayer who was the
16 first recipient of such assets after their recovery
17 and who is a victim of persecution for racial or
18 religious reasons by Nazi Germany or any other Axis
19 regime or as an heir of the victim. The amount of
20 and the eligibility for any public assistance,
21 benefit, or similar entitlement is not affected by
22 the inclusion of items (i) and (ii) of this
23 paragraph in gross income for federal income tax
24 purposes. This paragraph is exempt from the
25 provisions of Section 250;
26 (Y) For taxable years beginning on or after
27 January 1, 2002, moneys contributed in the taxable
28 year to a College Savings Pool account under Section
29 16.5 of the State Treasurer Act, except that amounts
30 excluded from gross income under Section
31 529(c)(3)(C)(i) of the Internal Revenue Code shall
32 not be considered moneys contributed under this
33 subparagraph (Y). This subparagraph (Y) is exempt
34 from the provisions of Section 250;
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1 (Z) For taxable years 2001 and thereafter, for
2 the taxable year in which the bonus depreciation
3 deduction (30% of the adjusted basis of the
4 qualified property) is taken on the taxpayer's
5 federal income tax return under subsection (k) of
6 Section 168 of the Internal Revenue Code and for
7 each applicable taxable year thereafter, an amount
8 equal to "x", where:
9 (1) "y" equals the amount of the
10 depreciation deduction taken for the taxable
11 year on the taxpayer's federal income tax
12 return on property for which the bonus
13 depreciation deduction (30% of the adjusted
14 basis of the qualified property) was taken in
15 any year under subsection (k) of Section 168 of
16 the Internal Revenue Code, but not including
17 the bonus depreciation deduction; and
18 (2) "x" equals "y" multiplied by 30 and
19 then divided by 70 (or "y" multiplied by
20 0.429).
21 The aggregate amount deducted under this
22 subparagraph in all taxable years for any one piece
23 of property may not exceed the amount of the bonus
24 depreciation deduction (30% of the adjusted basis of
25 the qualified property) taken on that property on
26 the taxpayer's federal income tax return under
27 subsection (k) of Section 168 of the Internal
28 Revenue Code; and
29 (AA) If the taxpayer reports a capital gain or
30 loss on the taxpayer's federal income tax return for
31 the taxable year based on a sale or transfer of
32 property for which the taxpayer was required in any
33 taxable year to make an addition modification under
34 subparagraph (D-15), then an amount equal to that
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1 addition modification.
2 The taxpayer is allowed to take the deduction
3 under this subparagraph only once with respect to
4 any one piece of property; and
5 (BB) (Z) Any amount included in adjusted gross
6 income, other than salary, received by a driver in a
7 ridesharing arrangement using a motor vehicle; and.
8 (CC) Beginning with tax years ending on or
9 after December 31, 2003, and ending with tax years
10 ending on or before December 30, 2013, all
11 unreimbursed amounts, but not more than a total
12 amount that would result in a tax liability of less
13 than zero for the taxpayer, expended by persons 65
14 years of age or older for home health services, as
15 defined by Section 2.05 of the Home Health Agency
16 Licensing Act, if provided by a public or private
17 organization licensed under that Act, or for
18 services provided to a person at that person's
19 residence by a licensed practical nurse or
20 registered nurse in accordance with a plan of
21 treatment for illness or infirmity prescribed by a
22 physician.
23 (b) Corporations.
24 (1) In general. In the case of a corporation, base
25 income means an amount equal to the taxpayer's taxable
26 income for the taxable year as modified by paragraph (2).
27 (2) Modifications. The taxable income referred to
28 in paragraph (1) shall be modified by adding thereto the
29 sum of the following amounts:
30 (A) An amount equal to all amounts paid or
31 accrued to the taxpayer as interest and all
32 distributions received from regulated investment
33 companies during the taxable year to the extent
34 excluded from gross income in the computation of
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1 taxable income;
2 (B) An amount equal to the amount of tax
3 imposed by this Act to the extent deducted from
4 gross income in the computation of taxable income
5 for the taxable year;
6 (C) In the case of a regulated investment
7 company, an amount equal to the excess of (i) the
8 net long-term capital gain for the taxable year,
9 over (ii) the amount of the capital gain dividends
10 designated as such in accordance with Section
11 852(b)(3)(C) of the Internal Revenue Code and any
12 amount designated under Section 852(b)(3)(D) of the
13 Internal Revenue Code, attributable to the taxable
14 year (this amendatory Act of 1995 (Public Act 89-89)
15 is declarative of existing law and is not a new
16 enactment);
17 (D) The amount of any net operating loss
18 deduction taken in arriving at taxable income, other
19 than a net operating loss carried forward from a
20 taxable year ending prior to December 31, 1986;
21 (E) For taxable years in which a net operating
22 loss carryback or carryforward from a taxable year
23 ending prior to December 31, 1986 is an element of
24 taxable income under paragraph (1) of subsection (e)
25 or subparagraph (E) of paragraph (2) of subsection
26 (e), the amount by which addition modifications
27 other than those provided by this subparagraph (E)
28 exceeded subtraction modifications in such earlier
29 taxable year, with the following limitations applied
30 in the order that they are listed:
31 (i) the addition modification relating to
32 the net operating loss carried back or forward
33 to the taxable year from any taxable year
34 ending prior to December 31, 1986 shall be
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1 reduced by the amount of addition modification
2 under this subparagraph (E) which related to
3 that net operating loss and which was taken
4 into account in calculating the base income of
5 an earlier taxable year, and
6 (ii) the addition modification relating
7 to the net operating loss carried back or
8 forward to the taxable year from any taxable
9 year ending prior to December 31, 1986 shall
10 not exceed the amount of such carryback or
11 carryforward;
12 For taxable years in which there is a net
13 operating loss carryback or carryforward from more
14 than one other taxable year ending prior to December
15 31, 1986, the addition modification provided in this
16 subparagraph (E) shall be the sum of the amounts
17 computed independently under the preceding
18 provisions of this subparagraph (E) for each such
19 taxable year;
20 (E-5) For taxable years ending after December
21 31, 1997, an amount equal to any eligible
22 remediation costs that the corporation deducted in
23 computing adjusted gross income and for which the
24 corporation claims a credit under subsection (l) of
25 Section 201;
26 (E-10) For taxable years 2001 and thereafter,
27 an amount equal to the bonus depreciation deduction
28 (30% of the adjusted basis of the qualified
29 property) taken on the taxpayer's federal income tax
30 return for the taxable year under subsection (k) of
31 Section 168 of the Internal Revenue Code; and
32 (E-11) If the taxpayer reports a capital gain
33 or loss on the taxpayer's federal income tax return
34 for the taxable year based on a sale or transfer of
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1 property for which the taxpayer was required in any
2 taxable year to make an addition modification under
3 subparagraph (E-10), then an amount equal to the
4 aggregate amount of the deductions taken in all
5 taxable years under subparagraph (T) with respect to
6 that property.;
7 The taxpayer is required to make the addition
8 modification under this subparagraph only once with
9 respect to any one piece of property;
10 and by deducting from the total so obtained the sum of
11 the following amounts:
12 (F) 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 (G) An amount equal to any amount included in
17 such total under Section 78 of the Internal Revenue
18 Code;
19 (H) In the case of a regulated investment
20 company, an amount equal to the amount of exempt
21 interest dividends as defined in subsection (b) (5)
22 of Section 852 of the Internal Revenue Code, paid to
23 shareholders for the taxable year;
24 (I) With the exception of any amounts
25 subtracted under subparagraph (J), an amount equal
26 to the sum of all amounts disallowed as deductions
27 by (i) Sections 171(a) (2), and 265(a)(2) and
28 amounts disallowed as interest expense by Section
29 291(a)(3) of the Internal Revenue Code, as now or
30 hereafter amended, and all amounts of expenses
31 allocable to interest and disallowed as deductions
32 by Section 265(a)(1) of the Internal Revenue Code,
33 as now or hereafter amended; and (ii) for taxable
34 years ending on or after August 13, 1999, Sections
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1 171(a)(2), 265, 280C, 291(a)(3), and 832(b)(5)(B)(i)
2 of the Internal Revenue Code; the provisions of this
3 subparagraph are exempt from the provisions of
4 Section 250;
5 (J) An amount equal to all amounts included in
6 such total which are exempt from taxation by this
7 State either by reason of its statutes or
8 Constitution or by reason of the Constitution,
9 treaties or statutes of the United States; provided
10 that, in the case of any statute of this State that
11 exempts income derived from bonds or other
12 obligations from the tax imposed under this Act, the
13 amount exempted shall be the interest net of bond
14 premium amortization;
15 (K) An amount equal to those dividends
16 included in such total which were paid by a
17 corporation which conducts business operations in an
18 Enterprise Zone or zones created under the Illinois
19 Enterprise Zone Act and conducts substantially all
20 of its operations in an Enterprise Zone or zones;
21 (L) An amount equal to those dividends
22 included in such total that were paid by a
23 corporation that conducts business operations in a
24 federally designated Foreign Trade Zone or Sub-Zone
25 and that is designated a High Impact Business
26 located in Illinois; provided that dividends
27 eligible for the deduction provided in subparagraph
28 (K) of paragraph 2 of this subsection shall not be
29 eligible for the deduction provided under this
30 subparagraph (L);
31 (M) For any taxpayer that is a financial
32 organization within the meaning of Section 304(c) of
33 this Act, an amount included in such total as
34 interest income from a loan or loans made by such
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1 taxpayer to a borrower, to the extent that such a
2 loan is secured by property which is eligible for
3 the Enterprise Zone Investment Credit. To determine
4 the portion of a loan or loans that is secured by
5 property eligible for a Section 201(f) investment
6 credit to the borrower, the entire principal amount
7 of the loan or loans between the taxpayer and the
8 borrower should be divided into the basis of the
9 Section 201(f) investment credit property which
10 secures the loan or loans, using for this purpose
11 the original basis of such property on the date that
12 it was placed in service in the Enterprise Zone.
13 The subtraction modification available to taxpayer
14 in any year under this subsection shall be that
15 portion of the total interest paid by the borrower
16 with respect to such loan attributable to the
17 eligible property as calculated under the previous
18 sentence;
19 (M-1) For any taxpayer that is a financial
20 organization within the meaning of Section 304(c) of
21 this Act, an amount included in such total as
22 interest income from a loan or loans made by such
23 taxpayer to a borrower, to the extent that such a
24 loan is secured by property which is eligible for
25 the High Impact Business Investment Credit. To
26 determine the portion of a loan or loans that is
27 secured by property eligible for a Section 201(h)
28 investment credit to the borrower, the entire
29 principal amount of the loan or loans between the
30 taxpayer and the borrower should be divided into the
31 basis of the Section 201(h) investment credit
32 property which secures the loan or loans, using for
33 this purpose the original basis of such property on
34 the date that it was placed in service in a
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1 federally designated Foreign Trade Zone or Sub-Zone
2 located in Illinois. No taxpayer that is eligible
3 for the deduction provided in subparagraph (M) of
4 paragraph (2) of this subsection shall be eligible
5 for the deduction provided under this subparagraph
6 (M-1). The subtraction modification available to
7 taxpayers in any year under this subsection shall be
8 that portion of the total interest paid by the
9 borrower with respect to such loan attributable to
10 the eligible property as calculated under the
11 previous sentence;
12 (N) Two times any contribution made during the
13 taxable year to a designated zone organization to
14 the extent that the contribution (i) qualifies as a
15 charitable contribution under subsection (c) of
16 Section 170 of the Internal Revenue Code and (ii)
17 must, by its terms, be used for a project approved
18 by the Department of Commerce and Community Affairs
19 under Section 11 of the Illinois Enterprise Zone
20 Act;
21 (O) An amount equal to: (i) 85% for taxable
22 years ending on or before December 31, 1992, or, a
23 percentage equal to the percentage allowable under
24 Section 243(a)(1) of the Internal Revenue Code of
25 1986 for taxable years ending after December 31,
26 1992, of the amount by which dividends included in
27 taxable income and received from a corporation that
28 is not created or organized under the laws of the
29 United States or any state or political subdivision
30 thereof, including, for taxable years ending on or
31 after December 31, 1988, dividends received or
32 deemed received or paid or deemed paid under
33 Sections 951 through 964 of the Internal Revenue
34 Code, exceed the amount of the modification provided
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1 under subparagraph (G) of paragraph (2) of this
2 subsection (b) which is related to such dividends;
3 plus (ii) 100% of the amount by which dividends,
4 included in taxable income and received, including,
5 for taxable years ending on or after December 31,
6 1988, dividends received or deemed received or paid
7 or deemed paid under Sections 951 through 964 of the
8 Internal Revenue Code, from any such corporation
9 specified in clause (i) that would but for the
10 provisions of Section 1504 (b) (3) of the Internal
11 Revenue Code be treated as a member of the
12 affiliated group which includes the dividend
13 recipient, exceed the amount of the modification
14 provided under subparagraph (G) of paragraph (2) of
15 this subsection (b) which is related to such
16 dividends;
17 (P) An amount equal to any contribution made
18 to a job training project established pursuant to
19 the Tax Increment Allocation Redevelopment Act;
20 (Q) An amount equal to the amount of the
21 deduction used to compute the federal income tax
22 credit for restoration of substantial amounts held
23 under claim of right for the taxable year pursuant
24 to Section 1341 of the Internal Revenue Code of
25 1986;
26 (R) In the case of an attorney-in-fact with
27 respect to whom an interinsurer or a reciprocal
28 insurer has made the election under Section 835 of
29 the Internal Revenue Code, 26 U.S.C. 835, an amount
30 equal to the excess, if any, of the amounts paid or
31 incurred by that interinsurer or reciprocal insurer
32 in the taxable year to the attorney-in-fact over the
33 deduction allowed to that interinsurer or reciprocal
34 insurer with respect to the attorney-in-fact under
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1 Section 835(b) of the Internal Revenue Code for the
2 taxable year;
3 (S) For taxable years ending on or after
4 December 31, 1997, in the case of a Subchapter S
5 corporation, an amount equal to all amounts of
6 income allocable to a shareholder subject to the
7 Personal Property Tax Replacement Income Tax imposed
8 by subsections (c) and (d) of Section 201 of this
9 Act, including amounts allocable to organizations
10 exempt from federal income tax by reason of Section
11 501(a) of the Internal Revenue Code. This
12 subparagraph (S) is exempt from the provisions of
13 Section 250;
14 (T) For taxable years 2001 and thereafter, for
15 the taxable year in which the bonus depreciation
16 deduction (30% of the adjusted basis of the
17 qualified property) is taken on the taxpayer's
18 federal income tax return under subsection (k) of
19 Section 168 of the Internal Revenue Code and for
20 each applicable taxable year thereafter, an amount
21 equal to "x", where:
22 (1) "y" equals the amount of the
23 depreciation deduction taken for the taxable
24 year on the taxpayer's federal income tax
25 return on property for which the bonus
26 depreciation deduction (30% of the adjusted
27 basis of the qualified property) was taken in
28 any year under subsection (k) of Section 168 of
29 the Internal Revenue Code, but not including
30 the bonus depreciation deduction; and
31 (2) "x" equals "y" multiplied by 30 and
32 then divided by 70 (or "y" multiplied by
33 0.429).
34 The aggregate amount deducted under this
-20- LRB093 02308 SJM 02316 b
1 subparagraph in all taxable years for any one piece
2 of property may not exceed the amount of the bonus
3 depreciation deduction (30% of the adjusted basis of
4 the qualified property) taken on that property on
5 the taxpayer's federal income tax return under
6 subsection (k) of Section 168 of the Internal
7 Revenue Code; and
8 (U) If the taxpayer reports a capital gain or
9 loss on the taxpayer's federal income tax return for
10 the taxable year based on a sale or transfer of
11 property for which the taxpayer was required in any
12 taxable year to make an addition modification under
13 subparagraph (E-10), then an amount equal to that
14 addition modification.
15 The taxpayer is allowed to take the deduction
16 under this subparagraph only once with respect to
17 any one piece of property.
18 (3) Special rule. For purposes of paragraph (2)
19 (A), "gross income" in the case of a life insurance
20 company, for tax years ending on and after December 31,
21 1994, shall mean the gross investment income for the
22 taxable year.
23 (c) Trusts and estates.
24 (1) In general. In the case of a trust or estate,
25 base income means an amount equal to the taxpayer's
26 taxable income for the taxable year as modified by
27 paragraph (2).
28 (2) Modifications. Subject to the provisions of
29 paragraph (3), the taxable income referred to in
30 paragraph (1) shall be modified by adding thereto the sum
31 of the following amounts:
32 (A) An amount equal to all amounts paid or
33 accrued to the taxpayer as interest or dividends
34 during the taxable year to the extent excluded from
-21- LRB093 02308 SJM 02316 b
1 gross income in the computation of taxable income;
2 (B) In the case of (i) an estate, $600; (ii) a
3 trust which, under its governing instrument, is
4 required to distribute all of its income currently,
5 $300; and (iii) any other trust, $100, but in each
6 such case, only to the extent such amount was
7 deducted in the computation of taxable income;
8 (C) An amount equal to the amount of tax
9 imposed by this Act to the extent deducted from
10 gross income in the computation of taxable income
11 for the taxable year;
12 (D) The amount of any net operating loss
13 deduction taken in arriving at taxable income, other
14 than a net operating loss carried forward from a
15 taxable year ending prior to December 31, 1986;
16 (E) For taxable years in which a net operating
17 loss carryback or carryforward from a taxable year
18 ending prior to December 31, 1986 is an element of
19 taxable income under paragraph (1) of subsection (e)
20 or subparagraph (E) of paragraph (2) of subsection
21 (e), the amount by which addition modifications
22 other than those provided by this subparagraph (E)
23 exceeded subtraction modifications in such taxable
24 year, with the following limitations applied in the
25 order that they are listed:
26 (i) the addition modification relating to
27 the net operating loss carried back or forward
28 to the taxable year from any taxable year
29 ending prior to December 31, 1986 shall be
30 reduced by the amount of addition modification
31 under this subparagraph (E) which related to
32 that net operating loss and which was taken
33 into account in calculating the base income of
34 an earlier taxable year, and
-22- LRB093 02308 SJM 02316 b
1 (ii) the addition modification relating
2 to the net operating loss carried back or
3 forward to the taxable year from any taxable
4 year ending prior to December 31, 1986 shall
5 not exceed the amount of such carryback or
6 carryforward;
7 For taxable years in which there is a net
8 operating loss carryback or carryforward from more
9 than one other taxable year ending prior to December
10 31, 1986, the addition modification provided in this
11 subparagraph (E) shall be the sum of the amounts
12 computed independently under the preceding
13 provisions of this subparagraph (E) for each such
14 taxable year;
15 (F) For taxable years ending on or after
16 January 1, 1989, an amount equal to the tax deducted
17 pursuant to Section 164 of the Internal Revenue Code
18 if the trust or estate is claiming the same tax for
19 purposes of the Illinois foreign tax credit under
20 Section 601 of this Act;
21 (G) An amount equal to the amount of the
22 capital gain deduction allowable under the Internal
23 Revenue Code, to the extent deducted from gross
24 income in the computation of taxable income;
25 (G-5) For taxable years ending after December
26 31, 1997, an amount equal to any eligible
27 remediation costs that the trust or estate deducted
28 in computing adjusted gross income and for which the
29 trust or estate claims a credit under subsection (l)
30 of Section 201;
31 (G-10) For taxable years 2001 and thereafter,
32 an amount equal to the bonus depreciation deduction
33 (30% of the adjusted basis of the qualified
34 property) taken on the taxpayer's federal income tax
-23- LRB093 02308 SJM 02316 b
1 return for the taxable year under subsection (k) of
2 Section 168 of the Internal Revenue Code; and
3 (G-11) If the taxpayer reports a capital gain
4 or loss on the taxpayer's federal income tax return
5 for the taxable year based on a sale or transfer of
6 property for which the taxpayer was required in any
7 taxable year to make an addition modification under
8 subparagraph (G-10), then an amount equal to the
9 aggregate amount of the deductions taken in all
10 taxable years under subparagraph (R) with respect to
11 that property.;
12 The taxpayer is required to make the addition
13 modification under this subparagraph only once with
14 respect to any one piece of property;
15 and by deducting from the total so obtained the sum of
16 the following amounts:
17 (H) An amount equal to all amounts included in
18 such total pursuant to the provisions of Sections
19 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and
20 408 of the Internal Revenue Code or included in such
21 total as distributions under the provisions of any
22 retirement or disability plan for employees of any
23 governmental agency or unit, or retirement payments
24 to retired partners, which payments are excluded in
25 computing net earnings from self employment by
26 Section 1402 of the Internal Revenue Code and
27 regulations adopted pursuant thereto;
28 (I) The valuation limitation amount;
29 (J) An amount equal to the amount of any tax
30 imposed by this Act which was refunded to the
31 taxpayer and included in such total for the taxable
32 year;
33 (K) An amount equal to all amounts included in
34 taxable income as modified by subparagraphs (A),
-24- LRB093 02308 SJM 02316 b
1 (B), (C), (D), (E), (F) and (G) which are exempt
2 from taxation by this State either by reason of its
3 statutes or Constitution or by reason of the
4 Constitution, treaties or statutes of the United
5 States; provided that, in the case of any statute of
6 this State that exempts income derived from bonds or
7 other obligations from the tax imposed under this
8 Act, the amount exempted shall be the interest net
9 of bond premium amortization;
10 (L) With the exception of any amounts
11 subtracted under subparagraph (K), an amount equal
12 to the sum of all amounts disallowed as deductions
13 by (i) Sections 171(a) (2) and 265(a)(2) of the
14 Internal Revenue Code, as now or hereafter amended,
15 and all amounts of expenses allocable to interest
16 and disallowed as deductions by Section 265(1) of
17 the Internal Revenue Code of 1954, as now or
18 hereafter amended; and (ii) for taxable years ending
19 on or after August 13, 1999, Sections 171(a)(2),
20 265, 280C, and 832(b)(5)(B)(i) of the Internal
21 Revenue Code; the provisions of this subparagraph
22 are exempt from the provisions of Section 250;
23 (M) An amount equal to those dividends
24 included in such total which were paid by a
25 corporation which conducts business operations in an
26 Enterprise Zone or zones created under the Illinois
27 Enterprise Zone Act and conducts substantially all
28 of its operations in an Enterprise Zone or Zones;
29 (N) An amount equal to any contribution made
30 to a job training project established pursuant to
31 the Tax Increment Allocation Redevelopment Act;
32 (O) An amount equal to those dividends
33 included in such total that were paid by a
34 corporation that conducts business operations in a
-25- LRB093 02308 SJM 02316 b
1 federally designated Foreign Trade Zone or Sub-Zone
2 and that is designated a High Impact Business
3 located in Illinois; provided that dividends
4 eligible for the deduction provided in subparagraph
5 (M) of paragraph (2) of this subsection shall not be
6 eligible for the deduction provided under this
7 subparagraph (O);
8 (P) An amount equal to the amount of the
9 deduction used to compute the federal income tax
10 credit for restoration of substantial amounts held
11 under claim of right for the taxable year pursuant
12 to Section 1341 of the Internal Revenue Code of
13 1986;
14 (Q) For taxable year 1999 and thereafter, an
15 amount equal to the amount of any (i) distributions,
16 to the extent includible in gross income for federal
17 income tax purposes, made to the taxpayer because of
18 his or her status as a victim of persecution for
19 racial or religious reasons by Nazi Germany or any
20 other Axis regime or as an heir of the victim and
21 (ii) items of income, to the extent includible in
22 gross income for federal income tax purposes,
23 attributable to, derived from or in any way related
24 to assets stolen from, hidden from, or otherwise
25 lost to a victim of persecution for racial or
26 religious reasons by Nazi Germany or any other Axis
27 regime immediately prior to, during, and immediately
28 after World War II, including, but not limited to,
29 interest on the proceeds receivable as insurance
30 under policies issued to a victim of persecution for
31 racial or religious reasons by Nazi Germany or any
32 other Axis regime by European insurance companies
33 immediately prior to and during World War II;
34 provided, however, this subtraction from federal
-26- LRB093 02308 SJM 02316 b
1 adjusted gross income does not apply to assets
2 acquired with such assets or with the proceeds from
3 the sale of such assets; provided, further, this
4 paragraph shall only apply to a taxpayer who was the
5 first recipient of such assets after their recovery
6 and who is a victim of persecution for racial or
7 religious reasons by Nazi Germany or any other Axis
8 regime or as an heir of the victim. The amount of
9 and the eligibility for any public assistance,
10 benefit, or similar entitlement is not affected by
11 the inclusion of items (i) and (ii) of this
12 paragraph in gross income for federal income tax
13 purposes. This paragraph is exempt from the
14 provisions of Section 250;
15 (R) For taxable years 2001 and thereafter, for
16 the taxable year in which the bonus depreciation
17 deduction (30% of the adjusted basis of the
18 qualified property) is taken on the taxpayer's
19 federal income tax return under subsection (k) of
20 Section 168 of the Internal Revenue Code and for
21 each applicable taxable year thereafter, an amount
22 equal to "x", where:
23 (1) "y" equals the amount of the
24 depreciation deduction taken for the taxable
25 year on the taxpayer's federal income tax
26 return on property for which the bonus
27 depreciation deduction (30% of the adjusted
28 basis of the qualified property) was taken in
29 any year under subsection (k) of Section 168 of
30 the Internal Revenue Code, but not including
31 the bonus depreciation deduction; and
32 (2) "x" equals "y" multiplied by 30 and
33 then divided by 70 (or "y" multiplied by
34 0.429).
-27- LRB093 02308 SJM 02316 b
1 The aggregate amount deducted under this
2 subparagraph in all taxable years for any one piece
3 of property may not exceed the amount of the bonus
4 depreciation deduction (30% of the adjusted basis of
5 the qualified property) taken on that property on
6 the taxpayer's federal income tax return under
7 subsection (k) of Section 168 of the Internal
8 Revenue Code; and
9 (S) If the taxpayer reports a capital gain or
10 loss on the taxpayer's federal income tax return for
11 the taxable year based on a sale or transfer of
12 property for which the taxpayer was required in any
13 taxable year to make an addition modification under
14 subparagraph (G-10), then an amount equal to that
15 addition modification.
16 The taxpayer is allowed to take the deduction
17 under this subparagraph only once with respect to
18 any one piece of property.
19 (3) Limitation. The amount of any modification
20 otherwise required under this subsection shall, under
21 regulations prescribed by the Department, be adjusted by
22 any amounts included therein which were properly paid,
23 credited, or required to be distributed, or permanently
24 set aside for charitable purposes pursuant to Internal
25 Revenue Code Section 642(c) during the taxable year.
26 (d) Partnerships.
27 (1) In general. In the case of a partnership, base
28 income means an amount equal to the taxpayer's taxable
29 income for the taxable year as modified by paragraph (2).
30 (2) Modifications. The taxable income referred to
31 in paragraph (1) shall be modified by adding thereto the
32 sum of the following amounts:
33 (A) An amount equal to all amounts paid or
34 accrued to the taxpayer as interest or dividends
-28- LRB093 02308 SJM 02316 b
1 during the taxable year to the extent excluded from
2 gross income in the computation of taxable income;
3 (B) An amount equal to the amount of tax
4 imposed by this Act to the extent deducted from
5 gross income for the taxable year;
6 (C) The amount of deductions allowed to the
7 partnership pursuant to Section 707 (c) of the
8 Internal Revenue Code in calculating its taxable
9 income;
10 (D) An amount equal to the amount of the
11 capital gain deduction allowable under the Internal
12 Revenue Code, to the extent deducted from gross
13 income in the computation of taxable income;
14 (D-5) For taxable years 2001 and thereafter,
15 an amount equal to the bonus depreciation deduction
16 (30% of the adjusted basis of the qualified
17 property) taken on the taxpayer's federal income tax
18 return for the taxable year under subsection (k) of
19 Section 168 of the Internal Revenue Code; and
20 (D-6) If the taxpayer reports a capital gain
21 or loss on the taxpayer's federal income tax return
22 for the taxable year based on a sale or transfer of
23 property for which the taxpayer was required in any
24 taxable year to make an addition modification under
25 subparagraph (D-5), then an amount equal to the
26 aggregate amount of the deductions taken in all
27 taxable years under subparagraph (O) with respect to
28 that property.;
29 The taxpayer is required to make the addition
30 modification under this subparagraph only once with
31 respect to any one piece of property;
32 and by deducting from the total so obtained the following
33 amounts:
34 (E) The valuation limitation amount;
-29- LRB093 02308 SJM 02316 b
1 (F) An amount equal to the amount of any tax
2 imposed by this Act which was refunded to the
3 taxpayer and included in such total for the taxable
4 year;
5 (G) An amount equal to all amounts included in
6 taxable income as modified by subparagraphs (A),
7 (B), (C) and (D) which are exempt from taxation by
8 this State either by reason of its statutes or
9 Constitution or by reason of the Constitution,
10 treaties or statutes of the United States; provided
11 that, in the case of any statute of this State that
12 exempts income derived from bonds or other
13 obligations from the tax imposed under this Act, the
14 amount exempted shall be the interest net of bond
15 premium amortization;
16 (H) Any income of the partnership which
17 constitutes personal service income as defined in
18 Section 1348 (b) (1) of the Internal Revenue Code
19 (as in effect December 31, 1981) or a reasonable
20 allowance for compensation paid or accrued for
21 services rendered by partners to the partnership,
22 whichever is greater;
23 (I) An amount equal to all amounts of income
24 distributable to an entity subject to the Personal
25 Property Tax Replacement Income Tax imposed by
26 subsections (c) and (d) of Section 201 of this Act
27 including amounts distributable to organizations
28 exempt from federal income tax by reason of Section
29 501(a) of the Internal Revenue Code;
30 (J) With the exception of any amounts
31 subtracted under subparagraph (G), an amount equal
32 to the sum of all amounts disallowed as deductions
33 by (i) Sections 171(a) (2), and 265(2) of the
34 Internal Revenue Code of 1954, as now or hereafter
-30- LRB093 02308 SJM 02316 b
1 amended, and all amounts of expenses allocable to
2 interest and disallowed as deductions by Section
3 265(1) of the Internal Revenue Code, as now or
4 hereafter amended; and (ii) for taxable years ending
5 on or after August 13, 1999, Sections 171(a)(2),
6 265, 280C, and 832(b)(5)(B)(i) of the Internal
7 Revenue Code; the provisions of this subparagraph
8 are exempt from the provisions of Section 250;
9 (K) An amount equal to those dividends
10 included in such total which were paid by a
11 corporation which conducts business operations in an
12 Enterprise Zone or zones created under the Illinois
13 Enterprise Zone Act, enacted by the 82nd General
14 Assembly, and conducts substantially all of its
15 operations in an Enterprise Zone or Zones;
16 (L) An amount equal to any contribution made
17 to a job training project established pursuant to
18 the Real Property Tax Increment Allocation
19 Redevelopment Act;
20 (M) An amount equal to those dividends
21 included in such total that were paid by a
22 corporation that conducts business operations in a
23 federally designated Foreign Trade Zone or Sub-Zone
24 and that is designated a High Impact Business
25 located in Illinois; provided that dividends
26 eligible for the deduction provided in subparagraph
27 (K) of paragraph (2) of this subsection shall not be
28 eligible for the deduction provided under this
29 subparagraph (M);
30 (N) An amount equal to the amount of the
31 deduction used to compute the federal income tax
32 credit for restoration of substantial amounts held
33 under claim of right for the taxable year pursuant
34 to Section 1341 of the Internal Revenue Code of
-31- LRB093 02308 SJM 02316 b
1 1986;
2 (O) For taxable years 2001 and thereafter, for
3 the taxable year in which the bonus depreciation
4 deduction (30% of the adjusted basis of the
5 qualified property) is taken on the taxpayer's
6 federal income tax return under subsection (k) of
7 Section 168 of the Internal Revenue Code and for
8 each applicable taxable year thereafter, an amount
9 equal to "x", where:
10 (1) "y" equals the amount of the
11 depreciation deduction taken for the taxable
12 year on the taxpayer's federal income tax
13 return on property for which the bonus
14 depreciation deduction (30% of the adjusted
15 basis of the qualified property) was taken in
16 any year under subsection (k) of Section 168 of
17 the Internal Revenue Code, but not including
18 the bonus depreciation deduction; and
19 (2) "x" equals "y" multiplied by 30 and
20 then divided by 70 (or "y" multiplied by
21 0.429).
22 The aggregate amount deducted under this
23 subparagraph in all taxable years for any one piece
24 of property may not exceed the amount of the bonus
25 depreciation deduction (30% of the adjusted basis of
26 the qualified property) taken on that property on
27 the taxpayer's federal income tax return under
28 subsection (k) of Section 168 of the Internal
29 Revenue Code; and
30 (P) If the taxpayer reports a capital gain or
31 loss on the taxpayer's federal income tax return for
32 the taxable year based on a sale or transfer of
33 property for which the taxpayer was required in any
34 taxable year to make an addition modification under
-32- LRB093 02308 SJM 02316 b
1 subparagraph (D-5), then an amount equal to that
2 addition modification.
3 The taxpayer is allowed to take the deduction
4 under this subparagraph only once with respect to
5 any one piece of property.
6 (e) Gross income; adjusted gross income; taxable income.
7 (1) In general. Subject to the provisions of
8 paragraph (2) and subsection (b) (3), for purposes of
9 this Section and Section 803(e), a taxpayer's gross
10 income, adjusted gross income, or taxable income for the
11 taxable year shall mean the amount of gross income,
12 adjusted gross income or taxable income properly
13 reportable for federal income tax purposes for the
14 taxable year under the provisions of the Internal Revenue
15 Code. Taxable income may be less than zero. However, for
16 taxable years ending on or after December 31, 1986, net
17 operating loss carryforwards from taxable years ending
18 prior to December 31, 1986, may not exceed the sum of
19 federal taxable income for the taxable year before net
20 operating loss deduction, plus the excess of addition
21 modifications over subtraction modifications for the
22 taxable year. For taxable years ending prior to December
23 31, 1986, taxable income may never be an amount in excess
24 of the net operating loss for the taxable year as defined
25 in subsections (c) and (d) of Section 172 of the Internal
26 Revenue Code, provided that when taxable income of a
27 corporation (other than a Subchapter S corporation),
28 trust, or estate is less than zero and addition
29 modifications, other than those provided by subparagraph
30 (E) of paragraph (2) of subsection (b) for corporations
31 or subparagraph (E) of paragraph (2) of subsection (c)
32 for trusts and estates, exceed subtraction modifications,
33 an addition modification must be made under those
34 subparagraphs for any other taxable year to which the
-33- LRB093 02308 SJM 02316 b
1 taxable income less than zero (net operating loss) is
2 applied under Section 172 of the Internal Revenue Code or
3 under subparagraph (E) of paragraph (2) of this
4 subsection (e) applied in conjunction with Section 172 of
5 the Internal Revenue Code.
6 (2) Special rule. For purposes of paragraph (1) of
7 this subsection, the taxable income properly reportable
8 for federal income tax purposes shall mean:
9 (A) Certain life insurance companies. In the
10 case of a life insurance company subject to the tax
11 imposed by Section 801 of the Internal Revenue Code,
12 life insurance company taxable income, plus the
13 amount of distribution from pre-1984 policyholder
14 surplus accounts as calculated under Section 815a of
15 the Internal Revenue Code;
16 (B) Certain other insurance companies. In the
17 case of mutual insurance companies subject to the
18 tax imposed by Section 831 of the Internal Revenue
19 Code, insurance company taxable income;
20 (C) Regulated investment companies. In the
21 case of a regulated investment company subject to
22 the tax imposed by Section 852 of the Internal
23 Revenue Code, investment company taxable income;
24 (D) Real estate investment trusts. In the
25 case of a real estate investment trust subject to
26 the tax imposed by Section 857 of the Internal
27 Revenue Code, real estate investment trust taxable
28 income;
29 (E) Consolidated corporations. In the case of
30 a corporation which is a member of an affiliated
31 group of corporations filing a consolidated income
32 tax return for the taxable year for federal income
33 tax purposes, taxable income determined as if such
34 corporation had filed a separate return for federal
-34- LRB093 02308 SJM 02316 b
1 income tax purposes for the taxable year and each
2 preceding taxable year for which it was a member of
3 an affiliated group. For purposes of this
4 subparagraph, the taxpayer's separate taxable income
5 shall be determined as if the election provided by
6 Section 243(b) (2) of the Internal Revenue Code had
7 been in effect for all such years;
8 (F) Cooperatives. In the case of a
9 cooperative corporation or association, the taxable
10 income of such organization determined in accordance
11 with the provisions of Section 1381 through 1388 of
12 the Internal Revenue Code;
13 (G) Subchapter S corporations. In the case
14 of: (i) a Subchapter S corporation for which there
15 is in effect an election for the taxable year under
16 Section 1362 of the Internal Revenue Code, the
17 taxable income of such corporation determined in
18 accordance with Section 1363(b) of the Internal
19 Revenue Code, except that taxable income shall take
20 into account those items which are required by
21 Section 1363(b)(1) of the Internal Revenue Code to
22 be separately stated; and (ii) a Subchapter S
23 corporation for which there is in effect a federal
24 election to opt out of the provisions of the
25 Subchapter S Revision Act of 1982 and have applied
26 instead the prior federal Subchapter S rules as in
27 effect on July 1, 1982, the taxable income of such
28 corporation determined in accordance with the
29 federal Subchapter S rules as in effect on July 1,
30 1982; and
31 (H) Partnerships. In the case of a
32 partnership, taxable income determined in accordance
33 with Section 703 of the Internal Revenue Code,
34 except that taxable income shall take into account
-35- LRB093 02308 SJM 02316 b
1 those items which are required by Section 703(a)(1)
2 to be separately stated but which would be taken
3 into account by an individual in calculating his
4 taxable income.
5 (f) Valuation limitation amount.
6 (1) In general. The valuation limitation amount
7 referred to in subsections (a) (2) (G), (c) (2) (I) and
8 (d)(2) (E) is an amount equal to:
9 (A) The sum of the pre-August 1, 1969
10 appreciation amounts (to the extent consisting of
11 gain reportable under the provisions of Section 1245
12 or 1250 of the Internal Revenue Code) for all
13 property in respect of which such gain was reported
14 for the taxable year; plus
15 (B) The lesser of (i) the sum of the
16 pre-August 1, 1969 appreciation amounts (to the
17 extent consisting of capital gain) for all property
18 in respect of which such gain was reported for
19 federal income tax purposes for the taxable year, or
20 (ii) the net capital gain for the taxable year,
21 reduced in either case by any amount of such gain
22 included in the amount determined under subsection
23 (a) (2) (F) or (c) (2) (H).
24 (2) Pre-August 1, 1969 appreciation amount.
25 (A) If the fair market value of property
26 referred to in paragraph (1) was readily
27 ascertainable on August 1, 1969, the pre-August 1,
28 1969 appreciation amount for such property is the
29 lesser of (i) the excess of such fair market value
30 over the taxpayer's basis (for determining gain) for
31 such property on that date (determined under the
32 Internal Revenue Code as in effect on that date), or
33 (ii) the total gain realized and reportable for
34 federal income tax purposes in respect of the sale,
-36- LRB093 02308 SJM 02316 b
1 exchange or other disposition of such property.
2 (B) If the fair market value of property
3 referred to in paragraph (1) was not readily
4 ascertainable on August 1, 1969, the pre-August 1,
5 1969 appreciation amount for such property is that
6 amount which bears the same ratio to the total gain
7 reported in respect of the property for federal
8 income tax purposes for the taxable year, as the
9 number of full calendar months in that part of the
10 taxpayer's holding period for the property ending
11 July 31, 1969 bears to the number of full calendar
12 months in the taxpayer's entire holding period for
13 the property.
14 (C) The Department shall prescribe such
15 regulations as may be necessary to carry out the
16 purposes of this paragraph.
17 (g) Double deductions. Unless specifically provided
18 otherwise, nothing in this Section shall permit the same item
19 to be deducted more than once.
20 (h) Legislative intention. Except as expressly provided
21 by this Section there shall be no modifications or
22 limitations on the amounts of income, gain, loss or deduction
23 taken into account in determining gross income, adjusted
24 gross income or taxable income for federal income tax
25 purposes for the taxable year, or in the amount of such items
26 entering into the computation of base income and net income
27 under this Act for such taxable year, whether in respect of
28 property values as of August 1, 1969 or otherwise.
29 (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99;
30 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676, eff.
31 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01; 92-16,
32 eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff. 8-17-01;
33 92-603, eff. 6-28-02; 92-626, eff. 7-11-02; 92-651, eff.
-37- LRB093 02308 SJM 02316 b
1 7-11-02; 92-846, eff. 8-23-02; revised 11-15-02.)
2 Section 99. Effective date. This Act takes effect upon
3 becoming law.