093_HB0863sam001
LRB093 05711 SJM 19532 a
1 AMENDMENT TO HOUSE BILL 863
2 AMENDMENT NO. . Amend House Bill 863 by replacing
3 everything after the enacting clause with the following:
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;
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1 (B) An amount equal to the amount of tax
2 imposed by this Act to the extent deducted from
3 gross income in the computation of adjusted gross
4 income for the taxable year;
5 (C) An amount equal to the amount received
6 during the taxable year as a recovery or refund of
7 real property taxes paid with respect to the
8 taxpayer's principal residence under the Revenue Act
9 of 1939 and for which a deduction was previously
10 taken under subparagraph (L) of this paragraph (2)
11 prior to July 1, 1991, the retrospective application
12 date of Article 4 of Public Act 87-17. In the case
13 of multi-unit or multi-use structures and farm
14 dwellings, the taxes on the taxpayer's principal
15 residence shall be that portion of the total taxes
16 for the entire property which is attributable to
17 such principal residence;
18 (D) An amount equal to the amount of the
19 capital gain deduction allowable under the Internal
20 Revenue Code, to the extent deducted from gross
21 income in the computation of adjusted gross income;
22 (D-5) An amount, to the extent not included in
23 adjusted gross income, equal to the amount of money
24 withdrawn by the taxpayer in the taxable year from a
25 medical care savings account and the interest earned
26 on the account in the taxable year of a withdrawal
27 pursuant to subsection (b) of Section 20 of the
28 Medical Care Savings Account Act or subsection (b)
29 of Section 20 of the Medical Care Savings Account
30 Act of 2000;
31 (D-10) For taxable years ending after December
32 31, 1997, an amount equal to any eligible
33 remediation costs that the individual deducted in
34 computing adjusted gross income and for which the
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1 individual claims a credit under subsection (l) of
2 Section 201;
3 (D-15) For taxable years ending after December
4 31, 2000 2001 and thereafter, an amount equal to the
5 bonus depreciation deduction (30% of the adjusted
6 basis of the qualified property) taken on the
7 taxpayer's federal income tax return for the taxable
8 year under subsection (k) of Section 168 of the
9 Internal Revenue Code with respect to any property
10 and, for taxable years ending on or after December
11 31, 2003, an amount equal to any deduction taken for
12 the taxable year under Section 179 of the Internal
13 Revenue Code with respect to any property; and
14 (D-16) If the taxpayer reports a capital gain
15 or loss on the taxpayer's federal income tax return
16 for the taxable year based on a sale or transfer of
17 property for which the taxpayer was required in any
18 taxable year to make an addition modification under
19 subparagraph (D-15), then an amount equal to the
20 aggregate amount of the deductions taken in all
21 taxable years under subparagraph (Z) or (Z-1) with
22 respect to that property.;
23 The taxpayer is required to make the addition
24 modification under this subparagraph only once with
25 respect to any one piece of property;. and
26 (D-20) (D-15) For taxable years beginning on
27 or after January 1, 2002, in the case of a
28 distribution from a qualified tuition program under
29 Section 529 of the Internal Revenue Code, other than
30 (i) a distribution from a College Savings Pool
31 created under Section 16.5 of the State Treasurer
32 Act or (ii) a distribution from the Illinois Prepaid
33 Tuition Trust Fund, an amount equal to the amount
34 excluded from gross income under Section
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1 529(c)(3)(B);
2 and by deducting from the total so obtained the sum of
3 the following amounts:
4 (E) For taxable years ending before December
5 31, 2001, any amount included in such total in
6 respect of any compensation (including but not
7 limited to any compensation paid or accrued to a
8 serviceman while a prisoner of war or missing in
9 action) paid to a resident by reason of being on
10 active duty in 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 1971 or
15 thereafter for annual training performed pursuant to
16 Sections 502 and 503, Title 32, United States Code
17 as a member of the Illinois National Guard. For
18 taxable years ending on or after December 31, 2001,
19 any amount included in such total in respect of any
20 compensation (including but not limited to any
21 compensation paid or accrued to a serviceman while a
22 prisoner of war or missing in action) paid to a
23 resident by reason of being a member of any
24 component of the Armed Forces of the United States
25 and in respect of any compensation paid or accrued
26 to a resident who as a governmental employee was a
27 prisoner of war or missing in action, and in respect
28 of any compensation paid to a resident in 2001 or
29 thereafter by reason of being a member of the
30 Illinois National Guard. The provisions of this
31 amendatory Act of the 92nd General Assembly are
32 exempt from the provisions of Section 250;
33 (F) An amount equal to all amounts included in
34 such total pursuant to the provisions of Sections
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1 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
2 408 of the Internal Revenue Code, or included in
3 such total as distributions under the provisions of
4 any retirement or disability plan for employees of
5 any governmental agency or unit, or retirement
6 payments to retired partners, which payments are
7 excluded in computing net earnings from self
8 employment by Section 1402 of the Internal Revenue
9 Code and regulations adopted pursuant thereto;
10 (G) The valuation limitation amount;
11 (H) An amount equal to the amount of any tax
12 imposed by this Act which was refunded to the
13 taxpayer and included in such total for the taxable
14 year;
15 (I) An amount equal to all amounts included in
16 such total pursuant to the provisions of Section 111
17 of the Internal Revenue Code as a recovery of items
18 previously deducted from adjusted gross income in
19 the computation of taxable income;
20 (J) An amount equal to those dividends
21 included in such total which were paid by a
22 corporation which conducts business operations in an
23 Enterprise Zone or zones created under the Illinois
24 Enterprise Zone Act, and conducts substantially all
25 of its operations in an Enterprise Zone or zones;
26 (K) An amount equal to those dividends
27 included in such total that were paid by a
28 corporation that conducts business operations in a
29 federally designated Foreign Trade Zone or Sub-Zone
30 and that is designated a High Impact Business
31 located in Illinois; provided that dividends
32 eligible for the deduction provided in subparagraph
33 (J) of paragraph (2) of this subsection shall not be
34 eligible for the deduction provided under this
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1 subparagraph (K);
2 (L) For taxable years ending after December
3 31, 1983, an amount equal to all social security
4 benefits and railroad retirement benefits included
5 in such total pursuant to Sections 72(r) and 86 of
6 the Internal Revenue Code;
7 (M) With the exception of any amounts
8 subtracted under subparagraph (N), an amount equal
9 to the sum of all amounts disallowed as deductions
10 by (i) Sections 171(a) (2), and 265(2) of the
11 Internal Revenue Code of 1954, as now or hereafter
12 amended, and all amounts of expenses allocable to
13 interest and disallowed as deductions by Section
14 265(1) of the Internal Revenue Code of 1954, as now
15 or hereafter amended; and (ii) for taxable years
16 ending on or after August 13, 1999, Sections
17 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
18 Internal Revenue Code; the provisions of this
19 subparagraph are exempt from the provisions of
20 Section 250;
21 (N) An amount equal to all amounts included in
22 such total which are exempt from taxation by this
23 State either by reason of its statutes or
24 Constitution or by reason of the Constitution,
25 treaties or statutes of the United States; provided
26 that, in the case of any statute of this State that
27 exempts income derived from bonds or other
28 obligations from the tax imposed under this Act, the
29 amount exempted shall be the interest net of bond
30 premium amortization;
31 (O) An amount equal to any contribution made
32 to a job training project established pursuant to
33 the Tax Increment Allocation Redevelopment Act;
34 (P) An amount equal to the amount of the
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1 deduction used to compute the federal income tax
2 credit for restoration of substantial amounts held
3 under claim of right for the taxable year pursuant
4 to Section 1341 of the Internal Revenue Code of
5 1986;
6 (Q) An amount equal to any amounts included in
7 such total, received by the taxpayer as an
8 acceleration in the payment of life, endowment or
9 annuity benefits in advance of the time they would
10 otherwise be payable as an indemnity for a terminal
11 illness;
12 (R) An amount equal to the amount of any
13 federal or State bonus paid to veterans of the
14 Persian Gulf War;
15 (S) An amount, to the extent included in
16 adjusted gross income, equal to the amount of a
17 contribution made in the taxable year on behalf of
18 the taxpayer to a medical care savings account
19 established under the Medical Care Savings Account
20 Act or the Medical Care Savings Account Act of 2000
21 to the extent the contribution is accepted by the
22 account administrator as provided in that Act;
23 (T) An amount, to the extent included in
24 adjusted gross income, equal to the amount of
25 interest earned in the taxable year on a medical
26 care savings account established under the Medical
27 Care Savings Account Act or the Medical Care Savings
28 Account Act of 2000 on behalf of the taxpayer, other
29 than interest added pursuant to item (D-5) of this
30 paragraph (2);
31 (U) For one taxable year beginning on or after
32 January 1, 1994, an amount equal to the total amount
33 of tax imposed and paid under subsections (a) and
34 (b) of Section 201 of this Act on grant amounts
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1 received by the taxpayer under the Nursing Home
2 Grant Assistance Act during the taxpayer's taxable
3 years 1992 and 1993;
4 (V) Beginning with tax years ending on or
5 after December 31, 1995 and ending with tax years
6 ending on or before December 31, 2004, an amount
7 equal to the amount paid by a taxpayer who is a
8 self-employed taxpayer, a partner of a partnership,
9 or a shareholder in a Subchapter S corporation for
10 health insurance or long-term care insurance for
11 that taxpayer or that taxpayer's spouse or
12 dependents, to the extent that the amount paid for
13 that health insurance or long-term care insurance
14 may be deducted under Section 213 of the Internal
15 Revenue Code of 1986, has not been deducted on the
16 federal income tax return of the taxpayer, and does
17 not exceed the taxable income attributable to that
18 taxpayer's income, self-employment income, or
19 Subchapter S corporation income; except that no
20 deduction shall be allowed under this item (V) if
21 the taxpayer is eligible to participate in any
22 health insurance or long-term care insurance plan of
23 an employer of the taxpayer or the taxpayer's
24 spouse. The amount of the health insurance and
25 long-term care insurance subtracted under this item
26 (V) shall be determined by multiplying total health
27 insurance and long-term care insurance premiums paid
28 by the taxpayer times a number that represents the
29 fractional percentage of eligible medical expenses
30 under Section 213 of the Internal Revenue Code of
31 1986 not actually deducted on the taxpayer's federal
32 income tax return;
33 (W) For taxable years beginning on or after
34 January 1, 1998, all amounts included in the
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1 taxpayer's federal gross income in the taxable year
2 from amounts converted from a regular IRA to a Roth
3 IRA. This paragraph is exempt from the provisions of
4 Section 250;
5 (X) For taxable year 1999 and thereafter, an
6 amount equal to the amount of any (i) distributions,
7 to the extent includible in gross income for federal
8 income tax purposes, made to the taxpayer because of
9 his or her status as a victim of persecution for
10 racial or religious reasons by Nazi Germany or any
11 other Axis regime or as an heir of the victim and
12 (ii) items of income, to the extent includible in
13 gross income for federal income tax purposes,
14 attributable to, derived from or in any way related
15 to assets stolen from, hidden from, or otherwise
16 lost to a victim of persecution for racial or
17 religious reasons by Nazi Germany or any other Axis
18 regime immediately prior to, during, and immediately
19 after World War II, including, but not limited to,
20 interest on the proceeds receivable as insurance
21 under policies issued to a victim of persecution for
22 racial or religious reasons by Nazi Germany or any
23 other Axis regime by European insurance companies
24 immediately prior to and during World War II;
25 provided, however, this subtraction from federal
26 adjusted gross income does not apply to assets
27 acquired with such assets or with the proceeds from
28 the sale of such assets; provided, further, this
29 paragraph shall only apply to a taxpayer who was the
30 first recipient of such assets after their recovery
31 and who is a victim of persecution for racial or
32 religious reasons by Nazi Germany or any other Axis
33 regime or as an heir of the victim. The amount of
34 and the eligibility for any public assistance,
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1 benefit, or similar entitlement is not affected by
2 the inclusion of items (i) and (ii) of this
3 paragraph in gross income for federal income tax
4 purposes. This paragraph is exempt from the
5 provisions of Section 250;
6 (Y) For taxable years beginning on or after
7 January 1, 2002, moneys contributed in the taxable
8 year to a College Savings Pool account under Section
9 16.5 of the State Treasurer Act, except that amounts
10 excluded from gross income under Section
11 529(c)(3)(C)(i) of the Internal Revenue Code shall
12 not be considered moneys contributed under this
13 subparagraph (Y). This subparagraph (Y) is exempt
14 from the provisions of Section 250;
15 (Z) For each taxable years 2001 and
16 thereafter, for the taxable year ending prior to
17 December 31, 2003 in which the bonus depreciation
18 deduction (30% of the adjusted basis of the
19 qualified property) is taken on the taxpayer's
20 federal income tax return under subsection (k) of
21 Section 168 of the Internal Revenue Code and for
22 each subsequent applicable taxable year ending prior
23 to December 31, 2003 thereafter, an amount equal to
24 "x", where:
25 (1) "y" equals the amount of the
26 depreciation deduction taken for the taxable
27 year on the taxpayer's federal income tax
28 return on property for which the bonus
29 depreciation deduction (30% of the adjusted
30 basis of the qualified property) was taken in
31 any year under subsection (k) of Section 168 of
32 the Internal Revenue Code, but not including
33 the bonus depreciation deduction; and
34 (2) "x" equals "y" multiplied by 30 and
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1 then divided by 70 (or "y" multiplied by
2 0.429).
3 The aggregate amount deducted under this
4 subparagraph in all taxable years for any one piece
5 of property may not exceed the amount of the bonus
6 depreciation deduction (30% of the adjusted basis of
7 the qualified property) taken on that property on
8 the taxpayer's federal income tax return under
9 subsection (k) of Section 168 of the Internal
10 Revenue Code; and
11 (Z-1) For taxable years ending on or after
12 December 31, 2003, an amount equal to the excess, if
13 any, of the federal adjusted gross income properly
14 reportable by the taxpayer for the taxable year,
15 plus any addition required to be made under
16 subparagraph (D-15) for the taxable year, over the
17 adjusted gross income that would have been
18 reportable by the taxpayer if the taxpayer:
19 (1) had made the election in subsection
20 (k)(2)(C)(iii) of Section 168 of the Internal
21 Revenue Code for all property for all taxable
22 years; and
23 (2) had made no election under Section
24 179(a) of the Internal Revenue Code for any
25 taxable year ending on or after December 31,
26 2003 to treat the cost of any property as an
27 expense.
28 This subparagraph (Z-1) is exempt from the
29 provisions of Section 250;
30 (AA) 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
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1 subparagraph (D-15), 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; and
6 (BB) (Z) Any amount included in adjusted gross
7 income, other than salary, received by a driver in a
8 ridesharing arrangement using a motor vehicle.
9 (b) Corporations.
10 (1) In general. In the case of a corporation, base
11 income means an amount equal to the taxpayer's taxable
12 income for the taxable year as modified by paragraph (2).
13 (2) Modifications. The taxable income referred to
14 in paragraph (1) shall be modified by adding thereto the
15 sum of the following amounts:
16 (A) An amount equal to all amounts paid or
17 accrued to the taxpayer as interest and all
18 distributions received from regulated investment
19 companies during the taxable year to the extent
20 excluded from gross income in the computation of
21 taxable income;
22 (B) An amount equal to the amount of tax
23 imposed by this Act to the extent deducted from
24 gross income in the computation of taxable income
25 for the taxable year;
26 (C) In the case of a regulated investment
27 company, an amount equal to the excess of (i) the
28 net long-term capital gain for the taxable year,
29 over (ii) the amount of the capital gain dividends
30 designated as such in accordance with Section
31 852(b)(3)(C) of the Internal Revenue Code and any
32 amount designated under Section 852(b)(3)(D) of the
33 Internal Revenue Code, attributable to the taxable
34 year (this amendatory Act of 1995 (Public Act 89-89)
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1 is declarative of existing law and is not a new
2 enactment);
3 (D) The amount of any net operating loss
4 deduction taken in arriving at taxable income, other
5 than a net operating loss carried forward from a
6 taxable year ending prior to December 31, 1986;
7 (E) For taxable years in which a net operating
8 loss carryback or carryforward from a taxable year
9 ending prior to December 31, 1986 is an element of
10 taxable income under paragraph (1) of subsection (e)
11 or subparagraph (E) of paragraph (2) of subsection
12 (e), the amount by which addition modifications
13 other than those provided by this subparagraph (E)
14 exceeded subtraction modifications in such earlier
15 taxable year, with the following limitations applied
16 in the order that they are listed:
17 (i) the addition modification relating to
18 the net operating loss carried back or forward
19 to the taxable year from any taxable year
20 ending prior to December 31, 1986 shall be
21 reduced by the amount of addition modification
22 under this subparagraph (E) which related to
23 that net operating loss and which was taken
24 into account in calculating the base income of
25 an earlier taxable year, and
26 (ii) the addition modification relating
27 to the net operating loss carried back or
28 forward to the taxable year from any taxable
29 year ending prior to December 31, 1986 shall
30 not exceed the amount of such carryback or
31 carryforward;
32 For taxable years in which there is a net
33 operating loss carryback or carryforward from more
34 than one other taxable year ending prior to December
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1 31, 1986, the addition modification provided in this
2 subparagraph (E) shall be the sum of the amounts
3 computed independently under the preceding
4 provisions of this subparagraph (E) for each such
5 taxable year;
6 (E-5) For taxable years ending after December
7 31, 1997, an amount equal to any eligible
8 remediation costs that the corporation deducted in
9 computing adjusted gross income and for which the
10 corporation claims a credit under subsection (l) of
11 Section 201;
12 (E-10) For taxable years ending after December
13 31, 2000 2001 and thereafter, an amount equal to the
14 bonus depreciation deduction (30% of the adjusted
15 basis of the qualified property) taken on the
16 taxpayer's federal income tax return for the taxable
17 year under subsection (k) of Section 168 of the
18 Internal Revenue Code with respect to any property
19 and, for taxable years ending on or after December
20 31, 2003, an amount equal to any deduction taken for
21 the taxable year under Section 179 of the Internal
22 Revenue Code with respect to any property; and
23 (E-11) If the taxpayer reports a capital gain
24 or loss on the taxpayer's federal income tax return
25 for the taxable year based on a sale or transfer of
26 property for which the taxpayer was required in any
27 taxable year to make an addition modification under
28 subparagraph (E-10), then an amount equal to the
29 aggregate amount of the deductions taken in all
30 taxable years under subparagraph (T) or (T-1) with
31 respect to that property.;
32 The taxpayer is required to make the addition
33 modification under this subparagraph only once with
34 respect to any one piece of property;
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1 and by deducting from the total so obtained the sum of
2 the following amounts:
3 (F) 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 (G) An amount equal to any amount included in
8 such total under Section 78 of the Internal Revenue
9 Code;
10 (H) In the case of a regulated investment
11 company, an amount equal to the amount of exempt
12 interest dividends as defined in subsection (b) (5)
13 of Section 852 of the Internal Revenue Code, paid to
14 shareholders for the taxable year;
15 (I) With the exception of any amounts
16 subtracted under subparagraph (J), an amount equal
17 to the sum of all amounts disallowed as deductions
18 by (i) Sections 171(a) (2), and 265(a)(2) and
19 amounts disallowed as interest expense by Section
20 291(a)(3) of the Internal Revenue Code, as now or
21 hereafter amended, and all amounts of expenses
22 allocable to interest and disallowed as deductions
23 by Section 265(a)(1) of the Internal Revenue Code,
24 as now or hereafter amended; and (ii) for taxable
25 years ending on or after August 13, 1999, Sections
26 171(a)(2), 265, 280C, 291(a)(3), and 832(b)(5)(B)(i)
27 of the Internal Revenue Code; the provisions of this
28 subparagraph are exempt from the provisions of
29 Section 250;
30 (J) An amount equal to all amounts included in
31 such total which are exempt from taxation by this
32 State either by reason of its statutes or
33 Constitution or by reason of the Constitution,
34 treaties or statutes of the United States; provided
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1 that, in the case of any statute of this State that
2 exempts income derived from bonds or other
3 obligations from the tax imposed under this Act, the
4 amount exempted shall be the interest net of bond
5 premium amortization;
6 (K) 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 (L) 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 (K) of paragraph 2 of this subsection shall not be
20 eligible for the deduction provided under this
21 subparagraph (L);
22 (M) For any taxpayer that is a financial
23 organization within the meaning of Section 304(c) of
24 this Act, an amount included in such total as
25 interest income from a loan or loans made by such
26 taxpayer to a borrower, to the extent that such a
27 loan is secured by property which is eligible for
28 the Enterprise Zone Investment Credit. To determine
29 the portion of a loan or loans that is secured by
30 property eligible for a Section 201(f) investment
31 credit to the borrower, the entire principal amount
32 of the loan or loans between the taxpayer and the
33 borrower should be divided into the basis of the
34 Section 201(f) investment credit property which
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1 secures the loan or loans, using for this purpose
2 the original basis of such property on the date that
3 it was placed in service in the Enterprise Zone.
4 The subtraction modification available to taxpayer
5 in any year under this subsection shall be that
6 portion of the total interest paid by the borrower
7 with respect to such loan attributable to the
8 eligible property as calculated under the previous
9 sentence;
10 (M-1) For any taxpayer that is a financial
11 organization within the meaning of Section 304(c) of
12 this Act, an amount included in such total as
13 interest income from a loan or loans made by such
14 taxpayer to a borrower, to the extent that such a
15 loan is secured by property which is eligible for
16 the High Impact Business Investment Credit. To
17 determine the portion of a loan or loans that is
18 secured by property eligible for a Section 201(h)
19 investment credit to the borrower, the entire
20 principal amount of the loan or loans between the
21 taxpayer and the borrower should be divided into the
22 basis of the Section 201(h) investment credit
23 property which secures the loan or loans, using for
24 this purpose the original basis of such property on
25 the date that it was placed in service in a
26 federally designated Foreign Trade Zone or Sub-Zone
27 located in Illinois. No taxpayer that is eligible
28 for the deduction provided in subparagraph (M) of
29 paragraph (2) of this subsection shall be eligible
30 for the deduction provided under this subparagraph
31 (M-1). The subtraction modification available to
32 taxpayers in any year under this subsection shall be
33 that portion of the total interest paid by the
34 borrower with respect to such loan attributable to
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1 the eligible property as calculated under the
2 previous sentence;
3 (N) Two times any contribution made during the
4 taxable year to a designated zone organization to
5 the extent that the contribution (i) qualifies as a
6 charitable contribution under subsection (c) of
7 Section 170 of the Internal Revenue Code and (ii)
8 must, by its terms, be used for a project approved
9 by the Department of Commerce and Economic
10 Opportunity Community Affairs under Section 11 of
11 the Illinois Enterprise Zone Act;
12 (O) An amount equal to: (i) 85% for taxable
13 years ending on or before December 31, 1992, or, a
14 percentage equal to the percentage allowable under
15 Section 243(a)(1) of the Internal Revenue Code of
16 1986 for taxable years ending after December 31,
17 1992, of the amount by which dividends included in
18 taxable income and received from a corporation that
19 is not created or organized under the laws of the
20 United States or any state or political subdivision
21 thereof, including, for taxable years ending on or
22 after December 31, 1988, dividends received or
23 deemed received or paid or deemed paid under
24 Sections 951 through 964 of the Internal Revenue
25 Code, exceed the amount of the modification provided
26 under subparagraph (G) of paragraph (2) of this
27 subsection (b) which is related to such dividends;
28 plus (ii) 100% of the amount by which dividends,
29 included in taxable income and received, including,
30 for taxable years ending on or after December 31,
31 1988, dividends received or deemed received or paid
32 or deemed paid under Sections 951 through 964 of the
33 Internal Revenue Code, from any such corporation
34 specified in clause (i) that would but for the
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1 provisions of Section 1504 (b) (3) of the Internal
2 Revenue Code be treated as a member of the
3 affiliated group which includes the dividend
4 recipient, exceed the amount of the modification
5 provided under subparagraph (G) of paragraph (2) of
6 this subsection (b) which is related to such
7 dividends;
8 (P) An amount equal to any contribution made
9 to a job training project established pursuant to
10 the Tax Increment Allocation Redevelopment Act;
11 (Q) An amount equal to the amount of the
12 deduction used to compute the federal income tax
13 credit for restoration of substantial amounts held
14 under claim of right for the taxable year pursuant
15 to Section 1341 of the Internal Revenue Code of
16 1986;
17 (R) In the case of an attorney-in-fact with
18 respect to whom an interinsurer or a reciprocal
19 insurer has made the election under Section 835 of
20 the Internal Revenue Code, 26 U.S.C. 835, an amount
21 equal to the excess, if any, of the amounts paid or
22 incurred by that interinsurer or reciprocal insurer
23 in the taxable year to the attorney-in-fact over the
24 deduction allowed to that interinsurer or reciprocal
25 insurer with respect to the attorney-in-fact under
26 Section 835(b) of the Internal Revenue Code for the
27 taxable year;
28 (S) For taxable years ending on or after
29 December 31, 1997, in the case of a Subchapter S
30 corporation, an amount equal to all amounts of
31 income allocable to a shareholder subject to the
32 Personal Property Tax Replacement Income Tax imposed
33 by subsections (c) and (d) of Section 201 of this
34 Act, including amounts allocable to organizations
-20- LRB093 05711 SJM 19532 a
1 exempt from federal income tax by reason of Section
2 501(a) of the Internal Revenue Code. This
3 subparagraph (S) is exempt from the provisions of
4 Section 250;
5 (T) For each taxable years 2001 and
6 thereafter, for the taxable year ending prior to
7 December 31, 2003 in which the bonus depreciation
8 deduction (30% of the adjusted basis of the
9 qualified property) is taken on the taxpayer's
10 federal income tax return under subsection (k) of
11 Section 168 of the Internal Revenue Code and for
12 each subsequent applicable taxable year ending prior
13 to December 31, 2003 thereafter, an amount equal to
14 "x", where:
15 (1) "y" equals the amount of the
16 depreciation deduction taken for the taxable
17 year on the taxpayer's federal income tax
18 return on property for which the bonus
19 depreciation deduction (30% of the adjusted
20 basis of the qualified property) was taken in
21 any year under subsection (k) of Section 168 of
22 the Internal Revenue Code, but not including
23 the bonus depreciation deduction; and
24 (2) "x" equals "y" multiplied by 30 and
25 then divided by 70 (or "y" multiplied by
26 0.429).
27 The aggregate amount deducted under this
28 subparagraph in all taxable years for any one piece
29 of property may not exceed the amount of the bonus
30 depreciation deduction (30% of the adjusted basis of
31 the qualified property) taken on that property on
32 the taxpayer's federal income tax return under
33 subsection (k) of Section 168 of the Internal
34 Revenue Code;
-21- LRB093 05711 SJM 19532 a
1 (T-1) For taxable years ending on or after
2 December 31, 2003, an amount equal to the excess, if
3 any, of the federal taxable income properly
4 reportable by the taxpayer for the taxable year,
5 plus any addition required to be made under
6 subparagraph (E-10) for the taxable year, over the
7 taxable income that would have been reportable by
8 the taxpayer if the taxpayer:
9 (1) had made the election in subsection
10 (k)(2)(C)(iii) of Section 168 of the Internal
11 Revenue Code for all property for all taxable
12 years; and
13 (2) had made no election under Section
14 179(a) of the Internal Revenue Code for any
15 taxable year ending on or after December 31,
16 2003 to treat the cost of any property as an
17 expense.
18 This subparagraph (T-1) is exempt from the
19 provisions of Section 250; and
20 (U) If the taxpayer reports a capital gain or
21 loss on the taxpayer's federal income tax return for
22 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 (E-10), then an amount equal to that
26 addition modification.
27 The taxpayer is allowed to take the deduction
28 under this subparagraph only once with respect to
29 any one piece of property.
30 (3) Special rule. For purposes of paragraph (2)
31 (A), "gross income" in the case of a life insurance
32 company, for tax years ending on and after December 31,
33 1994, shall mean the gross investment income for the
34 taxable year.
-22- LRB093 05711 SJM 19532 a
1 (c) Trusts and estates.
2 (1) In general. In the case of a trust or estate,
3 base income means an amount equal to the taxpayer's
4 taxable income for the taxable year as modified by
5 paragraph (2).
6 (2) Modifications. Subject to the provisions of
7 paragraph (3), the taxable income referred to in
8 paragraph (1) shall be modified by adding thereto the sum
9 of the following amounts:
10 (A) An amount equal to all amounts paid or
11 accrued to the taxpayer as interest or dividends
12 during the taxable year to the extent excluded from
13 gross income in the computation of taxable income;
14 (B) In the case of (i) an estate, $600; (ii) a
15 trust which, under its governing instrument, is
16 required to distribute all of its income currently,
17 $300; and (iii) any other trust, $100, but in each
18 such case, only to the extent such amount was
19 deducted in the computation of taxable income;
20 (C) An amount equal to the amount of tax
21 imposed by this Act to the extent deducted from
22 gross income in the computation of taxable income
23 for the taxable year;
24 (D) The amount of any net operating loss
25 deduction taken in arriving at taxable income, other
26 than a net operating loss carried forward from a
27 taxable year ending prior to December 31, 1986;
28 (E) For taxable years in which a net operating
29 loss carryback or carryforward from a taxable year
30 ending prior to December 31, 1986 is an element of
31 taxable income under paragraph (1) of subsection (e)
32 or subparagraph (E) of paragraph (2) of subsection
33 (e), the amount by which addition modifications
34 other than those provided by this subparagraph (E)
-23- LRB093 05711 SJM 19532 a
1 exceeded subtraction modifications in such taxable
2 year, with the following limitations applied in the
3 order that they are listed:
4 (i) the addition modification relating to
5 the net operating loss carried back or forward
6 to the taxable year from any taxable year
7 ending prior to December 31, 1986 shall be
8 reduced by the amount of addition modification
9 under this subparagraph (E) which related to
10 that net operating loss and which was taken
11 into account in calculating the base income of
12 an earlier taxable year, and
13 (ii) the addition modification relating
14 to the net operating loss carried back or
15 forward to the taxable year from any taxable
16 year ending prior to December 31, 1986 shall
17 not exceed the amount of such carryback or
18 carryforward;
19 For taxable years in which there is a net
20 operating loss carryback or carryforward from more
21 than one other taxable year ending prior to December
22 31, 1986, the addition modification provided in this
23 subparagraph (E) shall be the sum of the amounts
24 computed independently under the preceding
25 provisions of this subparagraph (E) for each such
26 taxable year;
27 (F) For taxable years ending on or after
28 January 1, 1989, an amount equal to the tax deducted
29 pursuant to Section 164 of the Internal Revenue Code
30 if the trust or estate is claiming the same tax for
31 purposes of the Illinois foreign tax credit under
32 Section 601 of this Act;
33 (G) An amount equal to the amount of the
34 capital gain deduction allowable under the Internal
-24- LRB093 05711 SJM 19532 a
1 Revenue Code, to the extent deducted from gross
2 income in the computation of taxable income;
3 (G-5) For taxable years ending after December
4 31, 1997, an amount equal to any eligible
5 remediation costs that the trust or estate deducted
6 in computing adjusted gross income and for which the
7 trust or estate claims a credit under subsection (l)
8 of Section 201;
9 (G-10) For taxable years ending after December
10 31, 2000 2001 and thereafter, an amount equal to the
11 bonus depreciation deduction (30% of the adjusted
12 basis of the qualified property) taken on the
13 taxpayer's federal income tax return for the taxable
14 year under subsection (k) of Section 168 of the
15 Internal Revenue Code with respect to any property
16 and, for taxable years ending on or after December
17 31, 2003, an amount equal to any deduction taken for
18 the taxable year under Section 179 of the Internal
19 Revenue Code with respect to any property; and
20 (G-11) 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 (G-10), then an amount equal to the
26 aggregate amount of the deductions taken in all
27 taxable years under subparagraph (R) or (R-1) with
28 respect to 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 sum of
33 the following amounts:
34 (H) An amount equal to all amounts included in
-25- LRB093 05711 SJM 19532 a
1 such total pursuant to the provisions of Sections
2 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and
3 408 of the Internal Revenue Code or included in such
4 total as distributions under the provisions of any
5 retirement or disability plan for employees of any
6 governmental agency or unit, or retirement payments
7 to retired partners, which payments are excluded in
8 computing net earnings from self employment by
9 Section 1402 of the Internal Revenue Code and
10 regulations adopted pursuant thereto;
11 (I) The valuation limitation amount;
12 (J) 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 (K) An amount equal to all amounts included in
17 taxable income as modified by subparagraphs (A),
18 (B), (C), (D), (E), (F) and (G) which are exempt
19 from taxation by this State either by reason of its
20 statutes or Constitution or by reason of the
21 Constitution, treaties or statutes of the United
22 States; provided that, in the case of any statute of
23 this State that exempts income derived from bonds or
24 other obligations from the tax imposed under this
25 Act, the amount exempted shall be the interest net
26 of bond premium amortization;
27 (L) With the exception of any amounts
28 subtracted under subparagraph (K), an amount equal
29 to the sum of all amounts disallowed as deductions
30 by (i) Sections 171(a) (2) and 265(a)(2) of the
31 Internal Revenue Code, as now or hereafter amended,
32 and all amounts of expenses allocable to interest
33 and disallowed as deductions by Section 265(1) of
34 the Internal Revenue Code of 1954, as now or
-26- LRB093 05711 SJM 19532 a
1 hereafter amended; and (ii) for taxable years ending
2 on or after August 13, 1999, Sections 171(a)(2),
3 265, 280C, and 832(b)(5)(B)(i) of the Internal
4 Revenue Code; the provisions of this subparagraph
5 are exempt from the provisions of Section 250;
6 (M) 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 (N) An amount equal to any contribution made
13 to a job training project established pursuant to
14 the Tax Increment Allocation Redevelopment Act;
15 (O) An amount equal to those dividends
16 included in such total that were paid by a
17 corporation that conducts business operations in a
18 federally designated Foreign Trade Zone or Sub-Zone
19 and that is designated a High Impact Business
20 located in Illinois; provided that dividends
21 eligible for the deduction provided in subparagraph
22 (M) of paragraph (2) of this subsection shall not be
23 eligible for the deduction provided under this
24 subparagraph (O);
25 (P) An amount equal to the amount of the
26 deduction used to compute the federal income tax
27 credit for restoration of substantial amounts held
28 under claim of right for the taxable year pursuant
29 to Section 1341 of the Internal Revenue Code of
30 1986;
31 (Q) 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
-27- LRB093 05711 SJM 19532 a
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;
32 (R) For each taxable years 2001 and
33 thereafter, for the taxable year ending prior to
34 December 31, 2003 in which the bonus depreciation
-28- LRB093 05711 SJM 19532 a
1 deduction (30% of the adjusted basis of the
2 qualified property) is taken on the taxpayer's
3 federal income tax return under subsection (k) of
4 Section 168 of the Internal Revenue Code and for
5 each subsequent applicable taxable year ending prior
6 to December 31, 2003 thereafter, an amount equal to
7 "x", where:
8 (1) "y" equals the amount of the
9 depreciation deduction taken for the taxable
10 year on the taxpayer's federal income tax
11 return on property for which the bonus
12 depreciation deduction (30% of the adjusted
13 basis of the qualified property) was taken in
14 any year under subsection (k) of Section 168 of
15 the Internal Revenue Code, but not including
16 the bonus depreciation deduction; and
17 (2) "x" equals "y" multiplied by 30 and
18 then divided by 70 (or "y" multiplied by
19 0.429).
20 The aggregate amount deducted under this
21 subparagraph in all taxable years for any one piece
22 of property may not exceed the amount of the bonus
23 depreciation deduction (30% of the adjusted basis of
24 the qualified property) taken on that property on
25 the taxpayer's federal income tax return under
26 subsection (k) of Section 168 of the Internal
27 Revenue Code;
28 (R-1) For taxable years ending on or after
29 December 31, 2003, an amount equal to the excess, if
30 any, of the federal taxable income properly
31 reportable by the taxpayer for the taxable year,
32 plus any addition required to be made under
33 subparagraph (G-10) for the taxable year, over the
34 taxable income that would have been reportable by
-29- LRB093 05711 SJM 19532 a
1 the taxpayer if the taxpayer:
2 (1) had made the election in subsection
3 (k)(2)(C)(iii) of Section 168 of the Internal
4 Revenue Code for all property for all taxable
5 years; and
6 (2) had made no election under Section
7 179(a) of the Internal Revenue Code for any
8 taxable year ending on or after December 31,
9 2003 to treat the cost of any property as an
10 expense.
11 This subparagraph (R-1) is exempt from the
12 provisions of Section 250; and
13 (S) If the taxpayer reports a capital gain or
14 loss on the taxpayer's federal income tax return for
15 the taxable year based on a sale or transfer of
16 property for which the taxpayer was required in any
17 taxable year to make an addition modification under
18 subparagraph (G-10), then an amount equal to that
19 addition modification.
20 The taxpayer is allowed to take the deduction
21 under this subparagraph only once with respect to
22 any one piece of property.
23 (3) Limitation. The amount of any modification
24 otherwise required under this subsection shall, under
25 regulations prescribed by the Department, be adjusted by
26 any amounts included therein which were properly paid,
27 credited, or required to be distributed, or permanently
28 set aside for charitable purposes pursuant to Internal
29 Revenue Code Section 642(c) during the taxable year.
30 (d) Partnerships.
31 (1) In general. In the case of a partnership, base
32 income means an amount equal to the taxpayer's taxable
33 income for the taxable year as modified by paragraph (2).
34 (2) Modifications. The taxable income referred to
-30- LRB093 05711 SJM 19532 a
1 in paragraph (1) shall be modified by adding thereto the
2 sum of the following amounts:
3 (A) An amount equal to all amounts paid or
4 accrued to the taxpayer as interest or dividends
5 during the taxable year to the extent excluded from
6 gross income in the computation of taxable income;
7 (B) An amount equal to the amount of tax
8 imposed by this Act to the extent deducted from
9 gross income for the taxable year;
10 (C) The amount of deductions allowed to the
11 partnership pursuant to Section 707 (c) of the
12 Internal Revenue Code in calculating its taxable
13 income;
14 (D) An amount equal to the amount of the
15 capital gain deduction allowable under the Internal
16 Revenue Code, to the extent deducted from gross
17 income in the computation of taxable income;
18 (D-5) For taxable years ending after December
19 31, 2000 2001 and thereafter, an amount equal to the
20 bonus depreciation deduction (30% of the adjusted
21 basis of the qualified property) taken on the
22 taxpayer's federal income tax return for the taxable
23 year under subsection (k) of Section 168 of the
24 Internal Revenue Code with respect to any property
25 and, for taxable years ending on or after December
26 31, 2003, an amount equal to any deduction taken for
27 the taxable year under Section 179 of the Internal
28 Revenue Code with respect to any property; and
29 (D-6) If the taxpayer reports a capital gain
30 or loss on the taxpayer's federal income tax return
31 for the taxable year based on a sale or transfer of
32 property for which the taxpayer was required in any
33 taxable year to make an addition modification under
34 subparagraph (D-5), then an amount equal to the
-31- LRB093 05711 SJM 19532 a
1 aggregate amount of the deductions taken in all
2 taxable years under subparagraph (O) or (O-1) with
3 respect to that property.;
4 The taxpayer is required to make the addition
5 modification under this subparagraph only once with
6 respect to any one piece of property;
7 and by deducting from the total so obtained the following
8 amounts:
9 (E) The valuation limitation amount;
10 (F) An amount equal to the amount of any tax
11 imposed by this Act which was refunded to the
12 taxpayer and included in such total for the taxable
13 year;
14 (G) An amount equal to all amounts included in
15 taxable income as modified by subparagraphs (A),
16 (B), (C) and (D) which are exempt from taxation by
17 this State either by reason of its statutes or
18 Constitution or by reason of the Constitution,
19 treaties or statutes of the United States; provided
20 that, in the case of any statute of this State that
21 exempts income derived from bonds or other
22 obligations from the tax imposed under this Act, the
23 amount exempted shall be the interest net of bond
24 premium amortization;
25 (H) Any income of the partnership which
26 constitutes personal service income as defined in
27 Section 1348 (b) (1) of the Internal Revenue Code
28 (as in effect December 31, 1981) or a reasonable
29 allowance for compensation paid or accrued for
30 services rendered by partners to the partnership,
31 whichever is greater;
32 (I) An amount equal to all amounts of income
33 distributable to an entity subject to the Personal
34 Property Tax Replacement Income Tax imposed by
-32- LRB093 05711 SJM 19532 a
1 subsections (c) and (d) of Section 201 of this Act
2 including amounts distributable to organizations
3 exempt from federal income tax by reason of Section
4 501(a) of the Internal Revenue Code;
5 (J) With the exception of any amounts
6 subtracted under subparagraph (G), an amount equal
7 to the sum of all amounts disallowed as deductions
8 by (i) Sections 171(a) (2), and 265(2) of the
9 Internal Revenue Code of 1954, as now or hereafter
10 amended, and all amounts of expenses allocable to
11 interest and disallowed as deductions by Section
12 265(1) of the Internal Revenue Code, as now or
13 hereafter amended; and (ii) for taxable years ending
14 on or after August 13, 1999, Sections 171(a)(2),
15 265, 280C, and 832(b)(5)(B)(i) of the Internal
16 Revenue Code; the provisions of this subparagraph
17 are exempt from the provisions of Section 250;
18 (K) An amount equal to those dividends
19 included in such total which were paid by a
20 corporation which conducts business operations in an
21 Enterprise Zone or zones created under the Illinois
22 Enterprise Zone Act, enacted by the 82nd General
23 Assembly, and conducts substantially all of its
24 operations in an Enterprise Zone or Zones;
25 (L) An amount equal to any contribution made
26 to a job training project established pursuant to
27 the Real Property Tax Increment Allocation
28 Redevelopment Act;
29 (M) An amount equal to those dividends
30 included in such total that were paid by a
31 corporation that conducts business operations in a
32 federally designated Foreign Trade Zone or Sub-Zone
33 and that is designated a High Impact Business
34 located in Illinois; provided that dividends
-33- LRB093 05711 SJM 19532 a
1 eligible for the deduction provided in subparagraph
2 (K) of paragraph (2) of this subsection shall not be
3 eligible for the deduction provided under this
4 subparagraph (M);
5 (N) An amount equal to the amount of the
6 deduction used to compute the federal income tax
7 credit for restoration of substantial amounts held
8 under claim of right for the taxable year pursuant
9 to Section 1341 of the Internal Revenue Code of
10 1986;
11 (O) For each taxable years 2001 and
12 thereafter, for the taxable year ending prior to
13 December 31, 2003 in which the bonus depreciation
14 deduction (30% of the adjusted basis of the
15 qualified property) is taken on the taxpayer's
16 federal income tax return under subsection (k) of
17 Section 168 of the Internal Revenue Code and for
18 each subsequent applicable taxable year ending prior
19 to December 31, 2003 thereafter, an amount equal to
20 "x", where:
21 (1) "y" equals the amount of the
22 depreciation deduction taken for the taxable
23 year on the taxpayer's federal income tax
24 return on property for which the bonus
25 depreciation deduction (30% of the adjusted
26 basis of the qualified property) was taken in
27 any year under subsection (k) of Section 168 of
28 the Internal Revenue Code, but not including
29 the bonus depreciation deduction; and
30 (2) "x" equals "y" multiplied by 30 and
31 then divided by 70 (or "y" multiplied by
32 0.429).
33 The aggregate amount deducted under this
34 subparagraph in all taxable years for any one piece
-34- LRB093 05711 SJM 19532 a
1 of property may not exceed the amount of the bonus
2 depreciation deduction (30% of the adjusted basis of
3 the qualified property) taken on that property on
4 the taxpayer's federal income tax return under
5 subsection (k) of Section 168 of the Internal
6 Revenue Code;
7 (O-1) For taxable years ending on or after
8 December 31, 2003, an amount equal to the excess, if
9 any, of the federal taxable income properly
10 reportable by the taxpayer for the taxable year,
11 plus any addition required to be made under
12 subparagraph (D-5) for the taxable year, over the
13 taxable income that would have been reportable by
14 the taxpayer if the taxpayer:
15 (1) had made the election in subsection
16 (k)(2)(C)(iii) of Section 168 of the Internal
17 Revenue Code for all property for all taxable
18 years; and
19 (2) had made no election under Section
20 179(a) of the Internal Revenue Code for any
21 taxable year ending on or after December 31,
22 2003 to treat the cost of any property as an
23 expense.
24 This subparagraph (O-1) is exempt from the
25 provisions of Section 250; and
26 (P) If the taxpayer reports a capital gain or
27 loss on the taxpayer's federal income tax return for
28 the taxable year based on a sale or transfer of
29 property for which the taxpayer was required in any
30 taxable year to make an addition modification under
31 subparagraph (D-5), then an amount equal to that
32 addition modification.
33 The taxpayer is allowed to take the deduction
34 under this subparagraph only once with respect to
-35- LRB093 05711 SJM 19532 a
1 any one piece of property.
2 (e) Gross income; adjusted gross income; taxable income.
3 (1) In general. Subject to the provisions of
4 paragraph (2) and subsection (b) (3), for purposes of
5 this Section and Section 803(e), a taxpayer's gross
6 income, adjusted gross income, or taxable income for the
7 taxable year shall mean the amount of gross income,
8 adjusted gross income or taxable income properly
9 reportable for federal income tax purposes for the
10 taxable year under the provisions of the Internal Revenue
11 Code. Taxable income may be less than zero. However, for
12 taxable years ending on or after December 31, 1986, net
13 operating loss carryforwards from taxable years ending
14 prior to December 31, 1986, may not exceed the sum of
15 federal taxable income for the taxable year before net
16 operating loss deduction, plus the excess of addition
17 modifications over subtraction modifications for the
18 taxable year. For taxable years ending prior to December
19 31, 1986, taxable income may never be an amount in excess
20 of the net operating loss for the taxable year as defined
21 in subsections (c) and (d) of Section 172 of the Internal
22 Revenue Code, provided that when taxable income of a
23 corporation (other than a Subchapter S corporation),
24 trust, or estate is less than zero and addition
25 modifications, other than those provided by subparagraph
26 (E) of paragraph (2) of subsection (b) for corporations
27 or subparagraph (E) of paragraph (2) of subsection (c)
28 for trusts and estates, exceed subtraction modifications,
29 an addition modification must be made under those
30 subparagraphs for any other taxable year to which the
31 taxable income less than zero (net operating loss) is
32 applied under Section 172 of the Internal Revenue Code or
33 under subparagraph (E) of paragraph (2) of this
34 subsection (e) applied in conjunction with Section 172 of
-36- LRB093 05711 SJM 19532 a
1 the Internal Revenue Code.
2 (2) Special rule. For purposes of paragraph (1) of
3 this subsection, the taxable income properly reportable
4 for federal income tax purposes shall mean:
5 (A) Certain life insurance companies. In the
6 case of a life insurance company subject to the tax
7 imposed by Section 801 of the Internal Revenue Code,
8 life insurance company taxable income, plus the
9 amount of distribution from pre-1984 policyholder
10 surplus accounts as calculated under Section 815a of
11 the Internal Revenue Code;
12 (B) Certain other insurance companies. In the
13 case of mutual insurance companies subject to the
14 tax imposed by Section 831 of the Internal Revenue
15 Code, insurance company taxable income;
16 (C) Regulated investment companies. In the
17 case of a regulated investment company subject to
18 the tax imposed by Section 852 of the Internal
19 Revenue Code, investment company taxable income;
20 (D) Real estate investment trusts. In the
21 case of a real estate investment trust subject to
22 the tax imposed by Section 857 of the Internal
23 Revenue Code, real estate investment trust taxable
24 income;
25 (E) Consolidated corporations. In the case of
26 a corporation which is a member of an affiliated
27 group of corporations filing a consolidated income
28 tax return for the taxable year for federal income
29 tax purposes, taxable income determined as if such
30 corporation had filed a separate return for federal
31 income tax purposes for the taxable year and each
32 preceding taxable year for which it was a member of
33 an affiliated group. For purposes of this
34 subparagraph, the taxpayer's separate taxable income
-37- LRB093 05711 SJM 19532 a
1 shall be determined as if the election provided by
2 Section 243(b) (2) of the Internal Revenue Code had
3 been in effect for all such years;
4 (F) Cooperatives. In the case of a
5 cooperative corporation or association, the taxable
6 income of such organization determined in accordance
7 with the provisions of Section 1381 through 1388 of
8 the Internal Revenue Code;
9 (G) Subchapter S corporations. In the case
10 of: (i) a Subchapter S corporation for which there
11 is in effect an election for the taxable year under
12 Section 1362 of the Internal Revenue Code, the
13 taxable income of such corporation determined in
14 accordance with Section 1363(b) of the Internal
15 Revenue Code, except that taxable income shall take
16 into account those items which are required by
17 Section 1363(b)(1) of the Internal Revenue Code to
18 be separately stated; and (ii) a Subchapter S
19 corporation for which there is in effect a federal
20 election to opt out of the provisions of the
21 Subchapter S Revision Act of 1982 and have applied
22 instead the prior federal Subchapter S rules as in
23 effect on July 1, 1982, the taxable income of such
24 corporation determined in accordance with the
25 federal Subchapter S rules as in effect on July 1,
26 1982; and
27 (H) Partnerships. In the case of a
28 partnership, taxable income determined in accordance
29 with Section 703 of the Internal Revenue Code,
30 except that taxable income shall take into account
31 those items which are required by Section 703(a)(1)
32 to be separately stated but which would be taken
33 into account by an individual in calculating his
34 taxable income.
-38- LRB093 05711 SJM 19532 a
1 (f) Valuation limitation amount.
2 (1) In general. The valuation limitation amount
3 referred to in subsections (a) (2) (G), (c) (2) (I) and
4 (d)(2) (E) is an amount equal to:
5 (A) The sum of the pre-August 1, 1969
6 appreciation amounts (to the extent consisting of
7 gain reportable under the provisions of Section 1245
8 or 1250 of the Internal Revenue Code) for all
9 property in respect of which such gain was reported
10 for the taxable year; plus
11 (B) The lesser of (i) the sum of the
12 pre-August 1, 1969 appreciation amounts (to the
13 extent consisting of capital gain) for all property
14 in respect of which such gain was reported for
15 federal income tax purposes for the taxable year, or
16 (ii) the net capital gain for the taxable year,
17 reduced in either case by any amount of such gain
18 included in the amount determined under subsection
19 (a) (2) (F) or (c) (2) (H).
20 (2) Pre-August 1, 1969 appreciation amount.
21 (A) If the fair market value of property
22 referred to in paragraph (1) was readily
23 ascertainable on August 1, 1969, the pre-August 1,
24 1969 appreciation amount for such property is the
25 lesser of (i) the excess of such fair market value
26 over the taxpayer's basis (for determining gain) for
27 such property on that date (determined under the
28 Internal Revenue Code as in effect on that date), or
29 (ii) the total gain realized and reportable for
30 federal income tax purposes in respect of the sale,
31 exchange or other disposition of such property.
32 (B) If the fair market value of property
33 referred to in paragraph (1) was not readily
34 ascertainable on August 1, 1969, the pre-August 1,
-39- LRB093 05711 SJM 19532 a
1 1969 appreciation amount for such property is that
2 amount which bears the same ratio to the total gain
3 reported in respect of the property for federal
4 income tax purposes for the taxable year, as the
5 number of full calendar months in that part of the
6 taxpayer's holding period for the property ending
7 July 31, 1969 bears to the number of full calendar
8 months in the taxpayer's entire holding period for
9 the property.
10 (C) The Department shall prescribe such
11 regulations as may be necessary to carry out the
12 purposes of this paragraph.
13 (g) Double deductions. Unless specifically provided
14 otherwise, nothing in this Section shall permit the same item
15 to be deducted more than once.
16 (h) Legislative intention. Except as expressly provided
17 by this Section there shall be no modifications or
18 limitations on the amounts of income, gain, loss or deduction
19 taken into account in determining gross income, adjusted
20 gross income or taxable income for federal income tax
21 purposes for the taxable year, or in the amount of such items
22 entering into the computation of base income and net income
23 under this Act for such taxable year, whether in respect of
24 property values as of August 1, 1969 or otherwise.
25 (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99;
26 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676, eff.
27 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01; 92-16,
28 eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff. 8-17-01;
29 92-603, eff. 6-28-02; 92-626, eff. 7-11-02; 92-651, eff.
30 7-11-02; 92-846, eff. 8-23-02; revised 10-15-03.)
31 Section 99. Effective date. This Act takes effect upon
32 becoming law.".