093_HB0863sam002











                                     LRB093 05711 SJM 20212 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;
 
                            -2-      LRB093 05711 SJM 20212 a
 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
 
                            -3-      LRB093 05711 SJM 20212 a
 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%  or  50%  of  the
 6             adjusted  basis  of the qualified property) taken on
 7             the taxpayer's federal income  tax  return  for  the
 8             taxable  year under subsection (k) of Section 168 of
 9             the  Internal  Revenue  Code  with  respect  to  any
10             property and, for taxable years ending on  or  after
11             December  31, 2003, an amount equal to any deduction
12             taken for the taxable year under Section 179 of  the
13             Internal  Revenue Code with respect to any property;
14             and
15                  (D-16)  If the taxpayer reports a capital  gain
16             or  loss on the taxpayer's federal income tax return
17             for the taxable year based on a sale or transfer  of
18             property  for which the taxpayer was required in any
19             taxable year to make an addition modification  under
20             subparagraph  (D-15),  then  an  amount equal to the
21             aggregate amount of  the  deductions  taken  in  all
22             taxable  years  under subparagraph (Z) or (Z-1) with
23             respect to that property.;
24                  The taxpayer is required to make  the  addition
25             modification  under this subparagraph only once with
26             respect to any one piece of property;. and
27                  (D-20) (D-15)  For taxable years  beginning  on
28             or   after  January  1,  2002,  in  the  case  of  a
29             distribution from a qualified tuition program  under
30             Section 529 of the Internal Revenue Code, other than
31             (i)  a  distribution  from  a  College  Savings Pool
32             created under Section 16.5 of  the  State  Treasurer
33             Act or (ii) a distribution from the Illinois Prepaid
34             Tuition  Trust  Fund,  an amount equal to the amount
 
                            -4-      LRB093 05711 SJM 20212 a
 1             excluded   from   gross   income    under    Section
 2             529(c)(3)(B);
 3        and  by  deducting  from the total so obtained the sum of
 4        the following amounts:
 5                  (E)  For taxable years ending  before  December
 6             31,  2001,  any  amount  included  in  such total in
 7             respect  of  any  compensation  (including  but  not
 8             limited to any compensation paid  or  accrued  to  a
 9             serviceman  while  a  prisoner  of war or missing in
10             action) paid to a resident by  reason  of  being  on
11             active duty in the Armed Forces of the United States
12             and  in  respect of any compensation paid or accrued
13             to a resident who as a governmental employee  was  a
14             prisoner of war or missing in action, and in respect
15             of  any  compensation  paid to a resident in 1971 or
16             thereafter for annual training performed pursuant to
17             Sections 502 and 503, Title 32, United  States  Code
18             as  a  member  of  the  Illinois National Guard. For
19             taxable years ending on or after December 31,  2001,
20             any  amount included in such total in respect of any
21             compensation  (including  but  not  limited  to  any
22             compensation paid or accrued to a serviceman while a
23             prisoner of war or missing  in  action)  paid  to  a
24             resident   by  reason  of  being  a  member  of  any
25             component of the Armed Forces of the  United  States
26             and  in  respect of any compensation paid or accrued
27             to a resident who as a governmental employee  was  a
28             prisoner of war or missing in action, and in respect
29             of  any  compensation  paid to a resident in 2001 or
30             thereafter by  reason  of  being  a  member  of  the
31             Illinois  National  Guard.  The  provisions  of this
32             amendatory Act of  the  92nd  General  Assembly  are
33             exempt from the provisions of Section 250;
34                  (F)  An amount equal to all amounts included in
 
                            -5-      LRB093 05711 SJM 20212 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
 4             such total as distributions under the provisions  of
 5             any  retirement  or disability plan for employees of
 6             any  governmental  agency  or  unit,  or  retirement
 7             payments to retired  partners,  which  payments  are
 8             excluded   in   computing  net  earnings  from  self
 9             employment by Section 1402 of the  Internal  Revenue
10             Code and regulations adopted pursuant thereto;
11                  (G)  The valuation limitation amount;
12                  (H)  An  amount  equal to the amount of any tax
13             imposed by  this  Act  which  was  refunded  to  the
14             taxpayer  and included in such total for the taxable
15             year;
16                  (I)  An amount equal to all amounts included in
17             such total pursuant to the provisions of Section 111
18             of the Internal Revenue Code as a recovery of  items
19             previously  deducted  from  adjusted gross income in
20             the computation of taxable income;
21                  (J)  An  amount  equal   to   those   dividends
22             included   in  such  total  which  were  paid  by  a
23             corporation which conducts business operations in an
24             Enterprise Zone or zones created under the  Illinois
25             Enterprise  Zone Act, and conducts substantially all
26             of its operations in an Enterprise Zone or zones;
27                  (K)  An  amount  equal   to   those   dividends
28             included   in   such  total  that  were  paid  by  a
29             corporation that conducts business operations  in  a
30             federally  designated Foreign Trade Zone or Sub-Zone
31             and  that  is  designated  a  High  Impact  Business
32             located  in  Illinois;   provided   that   dividends
33             eligible  for the deduction provided in subparagraph
34             (J) of paragraph (2) of this subsection shall not be
 
                            -6-      LRB093 05711 SJM 20212 a
 1             eligible  for  the  deduction  provided  under  this
 2             subparagraph (K);
 3                  (L)  For taxable years  ending  after  December
 4             31,  1983,  an  amount  equal to all social security
 5             benefits and railroad retirement  benefits  included
 6             in  such  total pursuant to Sections 72(r) and 86 of
 7             the Internal Revenue Code;
 8                  (M)  With  the   exception   of   any   amounts
 9             subtracted  under  subparagraph (N), an amount equal
10             to the sum of all amounts disallowed  as  deductions
11             by  (i)  Sections  171(a)  (2),  and  265(2)  of the
12             Internal Revenue Code of 1954, as now  or  hereafter
13             amended,  and  all  amounts of expenses allocable to
14             interest and  disallowed as  deductions  by  Section
15             265(1)  of the Internal Revenue Code of 1954, as now
16             or hereafter amended; and  (ii)  for  taxable  years
17             ending   on  or  after  August  13,  1999,  Sections
18             171(a)(2), 265, 280C,  and  832(b)(5)(B)(i)  of  the
19             Internal   Revenue  Code;  the  provisions  of  this
20             subparagraph  are  exempt  from  the  provisions  of
21             Section 250;
22                  (N)  An amount equal to all amounts included in
23             such total which are exempt from  taxation  by  this
24             State   either   by   reason   of  its  statutes  or
25             Constitution  or  by  reason  of  the  Constitution,
26             treaties or statutes of the United States;  provided
27             that,  in the case of any statute of this State that
28             exempts  income  derived   from   bonds   or   other
29             obligations from the tax imposed under this Act, the
30             amount  exempted  shall  be the interest net of bond
31             premium amortization;
32                  (O)  An amount equal to any  contribution  made
33             to  a  job  training project established pursuant to
34             the Tax Increment Allocation Redevelopment Act;
 
                            -7-      LRB093 05711 SJM 20212 a
 1                  (P)  An amount  equal  to  the  amount  of  the
 2             deduction  used  to  compute  the federal income tax
 3             credit for restoration of substantial  amounts  held
 4             under  claim  of right for the taxable year pursuant
 5             to Section 1341 of  the  Internal  Revenue  Code  of
 6             1986;
 7                  (Q)  An amount equal to any amounts included in
 8             such   total,   received   by  the  taxpayer  as  an
 9             acceleration in the payment of  life,  endowment  or
10             annuity  benefits  in advance of the time they would
11             otherwise be payable as an indemnity for a  terminal
12             illness;
13                  (R)  An  amount  equal  to  the  amount  of any
14             federal or State  bonus  paid  to  veterans  of  the
15             Persian Gulf War;
16                  (S)  An  amount,  to  the  extent  included  in
17             adjusted  gross  income,  equal  to  the amount of a
18             contribution made in the taxable year on  behalf  of
19             the  taxpayer  to  a  medical  care  savings account
20             established under the Medical Care  Savings  Account
21             Act  or the Medical Care Savings Account Act of 2000
22             to the extent the contribution is  accepted  by  the
23             account administrator as provided in that Act;
24                  (T)  An  amount,  to  the  extent  included  in
25             adjusted  gross  income,  equal  to  the  amount  of
26             interest  earned  in  the  taxable year on a medical
27             care savings account established under  the  Medical
28             Care Savings Account Act or the Medical Care Savings
29             Account Act of 2000 on behalf of the taxpayer, other
30             than  interest  added pursuant to item (D-5) of this
31             paragraph (2);
32                  (U)  For one taxable year beginning on or after
33             January 1, 1994, an amount equal to the total amount
34             of tax imposed and paid under  subsections  (a)  and
 
                            -8-      LRB093 05711 SJM 20212 a
 1             (b)  of  Section  201  of  this Act on grant amounts
 2             received by the  taxpayer  under  the  Nursing  Home
 3             Grant  Assistance  Act during the taxpayer's taxable
 4             years 1992 and 1993;
 5                  (V)  Beginning with  tax  years  ending  on  or
 6             after  December  31,  1995 and ending with tax years
 7             ending on or before December  31,  2004,  an  amount
 8             equal  to  the  amount  paid  by a taxpayer who is a
 9             self-employed taxpayer, a partner of a  partnership,
10             or  a  shareholder in a Subchapter S corporation for
11             health insurance or  long-term  care  insurance  for
12             that   taxpayer   or   that   taxpayer's  spouse  or
13             dependents, to the extent that the amount  paid  for
14             that  health  insurance  or long-term care insurance
15             may be deducted under Section 213  of  the  Internal
16             Revenue  Code  of 1986, has not been deducted on the
17             federal income tax return of the taxpayer, and  does
18             not  exceed  the taxable income attributable to that
19             taxpayer's  income,   self-employment   income,   or
20             Subchapter  S  corporation  income;  except  that no
21             deduction shall be allowed under this  item  (V)  if
22             the  taxpayer  is  eligible  to  participate  in any
23             health insurance or long-term care insurance plan of
24             an  employer  of  the  taxpayer  or  the  taxpayer's
25             spouse.  The amount  of  the  health  insurance  and
26             long-term  care insurance subtracted under this item
27             (V) shall be determined by multiplying total  health
28             insurance and long-term care insurance premiums paid
29             by  the  taxpayer times a number that represents the
30             fractional percentage of eligible  medical  expenses
31             under  Section  213  of the Internal Revenue Code of
32             1986 not actually deducted on the taxpayer's federal
33             income tax return;
34                  (W)  For taxable years beginning  on  or  after
 
                            -9-      LRB093 05711 SJM 20212 a
 1             January   1,  1998,  all  amounts  included  in  the
 2             taxpayer's federal gross income in the taxable  year
 3             from  amounts converted from a regular IRA to a Roth
 4             IRA. This paragraph is exempt from the provisions of
 5             Section 250;
 6                  (X)  For taxable year 1999 and  thereafter,  an
 7             amount equal to the amount of any (i) distributions,
 8             to the extent includible in gross income for federal
 9             income tax purposes, made to the taxpayer because of
10             his  or  her  status  as a victim of persecution for
11             racial or religious reasons by Nazi Germany  or  any
12             other  Axis  regime  or as an heir of the victim and
13             (ii) items of income, to the  extent  includible  in
14             gross   income  for  federal  income  tax  purposes,
15             attributable to, derived from or in any way  related
16             to  assets  stolen  from,  hidden from, or otherwise
17             lost to  a  victim  of  persecution  for  racial  or
18             religious  reasons by Nazi Germany or any other Axis
19             regime immediately prior to, during, and immediately
20             after World War II, including, but not  limited  to,
21             interest  on  the  proceeds  receivable as insurance
22             under policies issued to a victim of persecution for
23             racial or religious reasons by Nazi Germany  or  any
24             other  Axis  regime  by European insurance companies
25             immediately  prior  to  and  during  World  War  II;
26             provided, however,  this  subtraction  from  federal
27             adjusted  gross  income  does  not  apply  to assets
28             acquired with such assets or with the proceeds  from
29             the  sale  of  such  assets; provided, further, this
30             paragraph shall only apply to a taxpayer who was the
31             first recipient of such assets after their  recovery
32             and  who  is  a  victim of persecution for racial or
33             religious reasons by Nazi Germany or any other  Axis
34             regime  or  as an heir of the victim.  The amount of
 
                            -10-     LRB093 05711 SJM 20212 a
 1             and  the  eligibility  for  any  public  assistance,
 2             benefit, or similar entitlement is not  affected  by
 3             the   inclusion  of  items  (i)  and  (ii)  of  this
 4             paragraph in gross income  for  federal  income  tax
 5             purposes.   This   paragraph   is  exempt  from  the
 6             provisions of Section 250;
 7                  (Y)  For taxable years beginning  on  or  after
 8             January  1,  2002, moneys contributed in the taxable
 9             year to a College Savings Pool account under Section
10             16.5 of the State Treasurer Act, except that amounts
11             excluded   from   gross   income    under    Section
12             529(c)(3)(C)(i)  of  the Internal Revenue Code shall
13             not be  considered  moneys  contributed  under  this
14             subparagraph  (Y).   This subparagraph (Y) is exempt
15             from the provisions of Section 250;
16                  (Z)  For   each   taxable   years   2001    and
17             thereafter,  for  the  taxable  year ending prior to
18             December 31, 2003 in which  the  bonus  depreciation
19             deduction  (30%  or 50% of the adjusted basis of the
20             qualified  property)  is  taken  on  the  taxpayer's
21             federal income tax return under  subsection  (k)  of
22             Section  168  of  the  Internal Revenue Code and for
23             each subsequent applicable taxable year ending prior
24             to December 31, 2003 thereafter, an amount equal  to
25             "x", where:
26                       (1)  "y"   equals   the   amount   of  the
27                  depreciation deduction taken  for  the  taxable
28                  year  on  the  taxpayer's  federal  income  tax
29                  return   on   property   for  which  the  bonus
30                  depreciation  deduction  (30%  or  50%  of  the
31                  adjusted basis of the qualified  property)  was
32                  taken  in  any  year  under  subsection  (k) of
33                  Section 168 of the Internal Revenue  Code,  but
34                  not including the bonus depreciation deduction;
 
                            -11-     LRB093 05711 SJM 20212 a
 1                  and
 2                       (2)  for   property   on   which  a  bonus
 3                  depreciation deduction of 30% of  the  adjusted
 4                  basis  was  taken, "x" equals "y" multiplied by
 5                  30 and then divided by 70 (or "y" multiplied by
 6                  0.429) and,  for  property  on  which  a  bonus
 7                  depreciation  deduction  of 50% of the adjusted
 8                  basis was taken, "x" equals "y"  multiplied  by
 9                  1.0.
10                  The   aggregate   amount  deducted  under  this
11             subparagraph in all taxable years for any one  piece
12             of  property  may not exceed the amount of the bonus
13             depreciation deduction (30% or 50% of  the  adjusted
14             basis  of  the  qualified  property)  taken  on that
15             property on the taxpayer's federal income tax return
16             under subsection (k) of Section 168 of the  Internal
17             Revenue Code; and
18                  (Z-1)  For  taxable  years  ending  on or after
19             December 31, 2003, an amount equal to the excess, if
20             any, of the federal adjusted gross  income  properly
21             reportable  by  the  taxpayer  for the taxable year,
22             plus  any  addition  required  to  be   made   under
23             subparagraph  (D-15)  for the taxable year, over the
24             adjusted  gross  income   that   would   have   been
25             reportable by the taxpayer if the taxpayer:
26                       (1)  had  made  the election in subsection
27                  (k)(2)(C)(iii) of Section 168 of  the  Internal
28                  Revenue  Code  for  all property qualifying for
29                  bonus depreciation (30% or 50% of the  adjusted
30                  basis  of  the  qualifying  property)  for  all
31                  taxable years; and
32                       (2)  had  made  no  election under Section
33                  179(a) of the Internal  Revenue  Code  for  any
34                  taxable  year  ending  on or after December 31,
 
                            -12-     LRB093 05711 SJM 20212 a
 1                  2003 to treat the cost of any  property  as  an
 2                  expense.
 3             This   subparagraph   (Z-1)   is   exempt  from  the
 4             provisions of Section 250;
 5                  (AA)  If the taxpayer reports a capital gain or
 6             loss on the taxpayer's federal income tax return for
 7             the taxable year based on  a  sale  or  transfer  of
 8             property  for which the taxpayer was required in any
 9             taxable year to make an addition modification  under
10             subparagraph  (D-15),  then  an amount equal to that
11             addition modification.
12                  The taxpayer is allowed to take  the  deduction
13             under  this  subparagraph  only once with respect to
14             any one piece of property; and
15                  (BB) (Z)  Any amount included in adjusted gross
16             income, other than salary, received by a driver in a
17             ridesharing arrangement using a motor vehicle.

18        (b)  Corporations.
19             (1)  In general.  In the case of a corporation, base
20        income means an amount equal to  the  taxpayer's  taxable
21        income for the taxable year as modified by paragraph (2).
22             (2)  Modifications.   The taxable income referred to
23        in paragraph (1) shall be modified by adding thereto  the
24        sum of the following amounts:
25                  (A)  An  amount  equal  to  all amounts paid or
26             accrued  to  the  taxpayer  as  interest   and   all
27             distributions  received  from  regulated  investment
28             companies  during  the  taxable  year  to the extent
29             excluded from gross income  in  the  computation  of
30             taxable income;
31                  (B)  An  amount  equal  to  the  amount  of tax
32             imposed by this Act  to  the  extent  deducted  from
33             gross  income  in  the computation of taxable income
34             for the taxable year;
 
                            -13-     LRB093 05711 SJM 20212 a
 1                  (C)  In the  case  of  a  regulated  investment
 2             company,  an  amount  equal to the excess of (i) the
 3             net long-term capital gain  for  the  taxable  year,
 4             over  (ii)  the amount of the capital gain dividends
 5             designated  as  such  in  accordance  with   Section
 6             852(b)(3)(C)  of  the  Internal Revenue Code and any
 7             amount designated under Section 852(b)(3)(D) of  the
 8             Internal  Revenue  Code, attributable to the taxable
 9             year (this amendatory Act of 1995 (Public Act 89-89)
10             is declarative of existing law  and  is  not  a  new
11             enactment);
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 earlier
24             taxable year, with the following limitations applied
25             in the 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
 
                            -14-     LRB093 05711 SJM 20212 a
 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                  (E-5)  For  taxable years ending after December
16             31,  1997,  an  amount   equal   to   any   eligible
17             remediation  costs  that the corporation deducted in
18             computing adjusted gross income and  for  which  the
19             corporation  claims a credit under subsection (l) of
20             Section 201;
21                  (E-10)  For taxable years ending after December
22             31, 2000 2001 and thereafter, an amount equal to the
23             bonus depreciation deduction  (30%  or  50%  of  the
24             adjusted  basis  of the qualified property) taken on
25             the taxpayer's federal income  tax  return  for  the
26             taxable  year under subsection (k) of Section 168 of
27             the  Internal  Revenue  Code  with  respect  to  any
28             property and, for taxable years ending on  or  after
29             December  31, 2003, an amount equal to any deduction
30             taken for the taxable year under Section 179 of  the
31             Internal  Revenue Code with respect to any property;
32             and
33                  (E-11)  If the taxpayer reports a capital  gain
34             or  loss on the taxpayer's federal income tax return
 
                            -15-     LRB093 05711 SJM 20212 a
 1             for the taxable year based on a sale or transfer  of
 2             property  for which the taxpayer was required in any
 3             taxable year to make an addition modification  under
 4             subparagraph  (E-10),  then  an  amount equal to the
 5             aggregate amount of  the  deductions  taken  in  all
 6             taxable  years  under subparagraph (T) or (T-1) with
 7             respect to that property.;
 8                  The taxpayer is required to make  the  addition
 9             modification  under this subparagraph only once with
10             respect to any one piece of property;
11        and by deducting from the total so obtained  the  sum  of
12        the following amounts:
13                  (F)  An  amount  equal to the amount of any tax
14             imposed by  this  Act  which  was  refunded  to  the
15             taxpayer  and included in such total for the taxable
16             year;
17                  (G)  An amount equal to any amount included  in
18             such  total under Section 78 of the Internal Revenue
19             Code;
20                  (H)  In the  case  of  a  regulated  investment
21             company,  an  amount  equal  to the amount of exempt
22             interest dividends as defined in subsection (b)  (5)
23             of Section 852 of the Internal Revenue Code, paid to
24             shareholders for the taxable year;
25                  (I)  With   the   exception   of   any  amounts
26             subtracted under subparagraph (J), an  amount  equal
27             to  the  sum of all amounts disallowed as deductions
28             by  (i)  Sections  171(a)  (2),  and  265(a)(2)  and
29             amounts disallowed as interest  expense  by  Section
30             291(a)(3)  of  the  Internal Revenue Code, as now or
31             hereafter  amended,  and  all  amounts  of  expenses
32             allocable to interest and disallowed  as  deductions
33             by  Section  265(a)(1) of the Internal Revenue Code,
34             as now or hereafter amended; and  (ii)  for  taxable
 
                            -16-     LRB093 05711 SJM 20212 a
 1             years  ending  on or after August 13, 1999, Sections
 2             171(a)(2), 265, 280C, 291(a)(3), and 832(b)(5)(B)(i)
 3             of the Internal Revenue Code; the provisions of this
 4             subparagraph  are  exempt  from  the  provisions  of
 5             Section 250;
 6                  (J)  An amount equal to all amounts included in
 7             such total which are exempt from  taxation  by  this
 8             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                  (K)  An  amount  equal   to   those   dividends
17             included   in  such  total  which  were  paid  by  a
18             corporation which conducts business operations in an
19             Enterprise Zone or zones created under the  Illinois
20             Enterprise  Zone  Act and conducts substantially all
21             of its operations in an Enterprise Zone or zones;
22                  (L)  An  amount  equal   to   those   dividends
23             included   in   such  total  that  were  paid  by  a
24             corporation that conducts business operations  in  a
25             federally  designated Foreign Trade Zone or Sub-Zone
26             and  that  is  designated  a  High  Impact  Business
27             located  in  Illinois;   provided   that   dividends
28             eligible  for the deduction provided in subparagraph
29             (K) of paragraph 2 of this subsection shall  not  be
30             eligible  for  the  deduction  provided  under  this
31             subparagraph (L);
32                  (M)  For  any  taxpayer  that  is  a  financial
33             organization within the meaning of Section 304(c) of
34             this  Act,  an  amount  included  in  such  total as
 
                            -17-     LRB093 05711 SJM 20212 a
 1             interest income from a loan or loans  made  by  such
 2             taxpayer  to  a  borrower, to the extent that such a
 3             loan is secured by property which  is  eligible  for
 4             the Enterprise Zone Investment Credit.  To determine
 5             the  portion  of  a loan or loans that is secured by
 6             property eligible for a  Section  201(f)  investment
 7             credit  to the borrower, the entire principal amount
 8             of the loan or loans between the  taxpayer  and  the
 9             borrower  should  be  divided  into the basis of the
10             Section  201(f)  investment  credit  property  which
11             secures the loan or loans, using  for  this  purpose
12             the original basis of such property on the date that
13             it  was  placed  in  service in the Enterprise Zone.
14             The subtraction modification available  to  taxpayer
15             in  any  year  under  this  subsection shall be that
16             portion of the total interest paid by  the  borrower
17             with  respect  to  such  loan  attributable  to  the
18             eligible  property  as calculated under the previous
19             sentence;
20                  (M-1)  For any taxpayer  that  is  a  financial
21             organization within the meaning of Section 304(c) of
22             this  Act,  an  amount  included  in  such  total as
23             interest income from a loan or loans  made  by  such
24             taxpayer  to  a  borrower, to the extent that such a
25             loan is secured by property which  is  eligible  for
26             the  High  Impact  Business  Investment  Credit.  To
27             determine the portion of a loan  or  loans  that  is
28             secured  by  property  eligible for a Section 201(h)
29             investment  credit  to  the  borrower,  the   entire
30             principal  amount  of  the loan or loans between the
31             taxpayer and the borrower should be divided into the
32             basis  of  the  Section  201(h)  investment   credit
33             property  which secures the loan or loans, using for
34             this purpose the original basis of such property  on
 
                            -18-     LRB093 05711 SJM 20212 a
 1             the  date  that  it  was  placed  in  service  in  a
 2             federally  designated Foreign Trade Zone or Sub-Zone
 3             located in Illinois.  No taxpayer that  is  eligible
 4             for  the  deduction  provided in subparagraph (M) of
 5             paragraph (2) of this subsection shall  be  eligible
 6             for  the  deduction provided under this subparagraph
 7             (M-1).  The subtraction  modification  available  to
 8             taxpayers in any year under this subsection shall be
 9             that  portion  of  the  total  interest  paid by the
10             borrower with respect to such loan  attributable  to
11             the   eligible  property  as  calculated  under  the
12             previous sentence;
13                  (N)  Two times any contribution made during the
14             taxable year to a designated  zone  organization  to
15             the  extent that the contribution (i) qualifies as a
16             charitable  contribution  under  subsection  (c)  of
17             Section 170 of the Internal Revenue  Code  and  (ii)
18             must,  by  its terms, be used for a project approved
19             by  the  Department   of   Commerce   and   Economic
20             Opportunity  Community  Affairs  under Section 11 of
21             the Illinois Enterprise Zone Act;
22                  (O)  An amount equal to: (i)  85%  for  taxable
23             years  ending  on or before December 31, 1992, or, a
24             percentage equal to the percentage  allowable  under
25             Section  243(a)(1)  of  the Internal Revenue Code of
26             1986 for taxable years  ending  after  December  31,
27             1992,  of  the amount by which dividends included in
28             taxable income and received from a corporation  that
29             is  not  created  or organized under the laws of the
30             United States or any state or political  subdivision
31             thereof,  including,  for taxable years ending on or
32             after  December  31,  1988,  dividends  received  or
33             deemed  received  or  paid  or  deemed  paid   under
34             Sections  951  through  964  of the Internal Revenue
 
                            -19-     LRB093 05711 SJM 20212 a
 1             Code, exceed the amount of the modification provided
 2             under subparagraph (G)  of  paragraph  (2)  of  this
 3             subsection  (b)  which is related to such dividends;
 4             plus (ii) 100% of the  amount  by  which  dividends,
 5             included  in taxable income and received, including,
 6             for taxable years ending on or  after  December  31,
 7             1988,  dividends received or deemed received or paid
 8             or deemed paid under Sections 951 through 964 of the
 9             Internal Revenue Code,  from  any  such  corporation
10             specified  in  clause  (i)  that  would  but for the
11             provisions of Section 1504 (b) (3) of  the  Internal
12             Revenue   Code   be  treated  as  a  member  of  the
13             affiliated  group  which   includes   the   dividend
14             recipient,  exceed  the  amount  of the modification
15             provided under subparagraph (G) of paragraph (2)  of
16             this   subsection  (b)  which  is  related  to  such
17             dividends;
18                  (P)  An amount equal to any  contribution  made
19             to  a  job  training project established pursuant to
20             the Tax Increment Allocation Redevelopment Act;
21                  (Q)  An amount  equal  to  the  amount  of  the
22             deduction  used  to  compute  the federal income tax
23             credit for restoration of substantial  amounts  held
24             under  claim  of right for the taxable year pursuant
25             to Section 1341 of  the  Internal  Revenue  Code  of
26             1986;
27                  (R)  In  the  case  of an attorney-in-fact with
28             respect to whom  an  interinsurer  or  a  reciprocal
29             insurer  has  made the election under Section 835 of
30             the Internal Revenue Code, 26 U.S.C. 835, an  amount
31             equal  to the excess, if any, of the amounts paid or
32             incurred by that interinsurer or reciprocal  insurer
33             in the taxable year to the attorney-in-fact over the
34             deduction allowed to that interinsurer or reciprocal
 
                            -20-     LRB093 05711 SJM 20212 a
 1             insurer  with  respect to the attorney-in-fact under
 2             Section 835(b) of the Internal Revenue Code for  the
 3             taxable year;
 4                  (S)  For  taxable  years  ending  on  or  after
 5             December  31,  1997,  in  the case of a Subchapter S
 6             corporation, an  amount  equal  to  all  amounts  of
 7             income  allocable  to  a  shareholder subject to the
 8             Personal Property Tax Replacement Income Tax imposed
 9             by subsections (c) and (d) of Section  201  of  this
10             Act,  including  amounts  allocable to organizations
11             exempt from federal income tax by reason of  Section
12             501(a)   of   the   Internal   Revenue  Code.   This
13             subparagraph (S) is exempt from  the  provisions  of
14             Section 250;
15                  (T)  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% or 50% 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%  or  50%  of  the
30                  adjusted  basis  of the qualified property) was
31                  taken in  any  year  under  subsection  (k)  of
32                  Section  168  of the Internal Revenue Code, but
33                  not including the bonus depreciation deduction;
34                  and
 
                            -21-     LRB093 05711 SJM 20212 a
 1                       (2)  for  property  on   which   a   bonus
 2                  depreciation  deduction  of 30% of the adjusted
 3                  basis was taken, "x" equals "y"  multiplied  by
 4                  30 and then divided by 70 (or "y" multiplied by
 5                  0.429)  and,  for  property  on  which  a bonus
 6                  depreciation deduction of 50% of  the  adjusted
 7                  basis  was  taken, "x" equals "y" multiplied by
 8                  1.0.
 9                  The  aggregate  amount  deducted   under   this
10             subparagraph  in all taxable years for any one piece
11             of property may not exceed the amount of  the  bonus
12             depreciation  deduction  (30% or 50% of the adjusted
13             basis of  the  qualified  property)  taken  on  that
14             property on the taxpayer's federal income tax return
15             under  subsection (k) of Section 168 of the Internal
16             Revenue Code;
17                  (T-1)  For taxable years  ending  on  or  after
18             December 31, 2003, an amount equal to the excess, if
19             any,   of   the   federal  taxable  income  properly
20             reportable by the taxpayer  for  the  taxable  year,
21             plus   any   addition  required  to  be  made  under
22             subparagraph (E-10) for the taxable year,  over  the
23             taxable  income  that  would have been reportable by
24             the taxpayer if the taxpayer:
25                       (1)  had made the election  in  subsection
26                  (k)(2)(C)(iii)  of  Section 168 of the Internal
27                  Revenue Code for all  property  qualifying  for
28                  bonus  depreciation (30% or 50% of the adjusted
29                  basis  of  the  qualifying  property)  for  all
30                  taxable years; and
31                       (2)  had made no  election  under  Section
32                  179(a)  of  the  Internal  Revenue Code for any
33                  taxable year ending on or  after  December  31,
34                  2003  to  treat  the cost of any property as an
 
                            -22-     LRB093 05711 SJM 20212 a
 1                  expense.
 2             This  subparagraph  (T-1)   is   exempt   from   the
 3             provisions of Section 250; and
 4                  (U)  If  the taxpayer reports a capital gain or
 5             loss on the taxpayer's federal income tax return for
 6             the taxable year based on  a  sale  or  transfer  of
 7             property  for which the taxpayer was required in any
 8             taxable year to make an addition modification  under
 9             subparagraph  (E-10),  then  an amount equal to that
10             addition modification.
11                  The taxpayer is allowed to take  the  deduction
12             under  this  subparagraph  only once with respect to
13             any one piece of property.
14             (3)  Special rule.  For purposes  of  paragraph  (2)
15        (A),  "gross  income"  in  the  case  of a life insurance
16        company, for tax years ending on and after  December  31,
17        1994,  shall  mean  the  gross  investment income for the
18        taxable year.

19        (c)  Trusts and estates.
20             (1)  In general.  In the case of a trust or  estate,
21        base  income  means  an  amount  equal  to the taxpayer's
22        taxable income  for  the  taxable  year  as  modified  by
23        paragraph (2).
24             (2)  Modifications.   Subject  to  the provisions of
25        paragraph  (3),  the  taxable  income  referred   to   in
26        paragraph (1) shall be modified by adding thereto the sum
27        of the following amounts:
28                  (A)  An  amount  equal  to  all amounts paid or
29             accrued to the taxpayer  as  interest  or  dividends
30             during  the taxable year to the extent excluded from
31             gross income in the computation of taxable income;
32                  (B)  In the case of (i) an estate, $600; (ii) a
33             trust which,  under  its  governing  instrument,  is
34             required  to distribute all of its income currently,
 
                            -23-     LRB093 05711 SJM 20212 a
 1             $300; and (iii) any other trust, $100, but  in  each
 2             such  case,  only  to  the  extent  such  amount was
 3             deducted in the computation of taxable income;
 4                  (C)  An amount  equal  to  the  amount  of  tax
 5             imposed  by  this  Act  to  the extent deducted from
 6             gross income in the computation  of  taxable  income
 7             for the taxable year;
 8                  (D)  The  amount  of  any  net  operating  loss
 9             deduction taken in arriving at taxable income, other
10             than  a  net  operating  loss carried forward from a
11             taxable year ending prior to December 31, 1986;
12                  (E)  For taxable years in which a net operating
13             loss carryback or carryforward from a  taxable  year
14             ending  prior  to December 31, 1986 is an element of
15             taxable income under paragraph (1) of subsection (e)
16             or subparagraph (E) of paragraph (2)  of  subsection
17             (e),  the  amount  by  which  addition modifications
18             other than those provided by this  subparagraph  (E)
19             exceeded  subtraction  modifications in such taxable
20             year, with the following limitations applied in  the
21             order that they are listed:
22                       (i)  the addition modification relating to
23                  the  net operating loss carried back or forward
24                  to the  taxable  year  from  any  taxable  year
25                  ending  prior  to  December  31,  1986 shall be
26                  reduced by the amount of addition  modification
27                  under  this  subparagraph  (E) which related to
28                  that net operating loss  and  which  was  taken
29                  into  account in calculating the base income of
30                  an earlier taxable year, and
31                       (ii)  the addition  modification  relating
32                  to  the  net  operating  loss  carried  back or
33                  forward to the taxable year  from  any  taxable
34                  year  ending  prior  to December 31, 1986 shall
 
                            -24-     LRB093 05711 SJM 20212 a
 1                  not exceed the  amount  of  such  carryback  or
 2                  carryforward;
 3                  For  taxable  years  in  which  there  is a net
 4             operating loss carryback or carryforward  from  more
 5             than one other taxable year ending prior to December
 6             31, 1986, the addition modification provided in this
 7             subparagraph  (E)  shall  be  the sum of the amounts
 8             computed   independently   under    the    preceding
 9             provisions  of  this  subparagraph (E) for each such
10             taxable year;
11                  (F)  For  taxable  years  ending  on  or  after
12             January 1, 1989, an amount equal to the tax deducted
13             pursuant to Section 164 of the Internal Revenue Code
14             if the trust or estate is claiming the same tax  for
15             purposes  of  the  Illinois foreign tax credit under
16             Section 601 of this Act;
17                  (G)  An amount  equal  to  the  amount  of  the
18             capital  gain deduction allowable under the Internal
19             Revenue Code, to  the  extent  deducted  from  gross
20             income in the computation of taxable income;
21                  (G-5)  For  taxable years ending after December
22             31,  1997,  an  amount   equal   to   any   eligible
23             remediation  costs that the trust or estate deducted
24             in computing adjusted gross income and for which the
25             trust or estate claims a credit under subsection (l)
26             of Section 201;
27                  (G-10)  For taxable years ending after December
28             31, 2000 2001 and thereafter, an amount equal to the
29             bonus depreciation deduction  (30%  or  50%  of  the
30             adjusted  basis  of the qualified property) taken on
31             the taxpayer's federal income  tax  return  for  the
32             taxable  year under subsection (k) of Section 168 of
33             the  Internal  Revenue  Code  with  respect  to  any
34             property and, for taxable years ending on  or  after
 
                            -25-     LRB093 05711 SJM 20212 a
 1             December  31, 2003, an amount equal to any deduction
 2             taken for the taxable year under Section 179 of  the
 3             Internal  Revenue Code with respect to any property;
 4             and
 5                  (G-11)  If the taxpayer reports a capital  gain
 6             or  loss on the taxpayer's federal income tax return
 7             for the taxable year based on a sale or transfer  of
 8             property  for which the taxpayer was required in any
 9             taxable year to make an addition modification  under
10             subparagraph  (G-10),  then  an  amount equal to the
11             aggregate amount of  the  deductions  taken  in  all
12             taxable  years  under subparagraph (R) or (R-1) with
13             respect to that property.;
14                  The taxpayer is required to make  the  addition
15             modification  under this subparagraph only once with
16             respect to any one piece of property;
17        and by deducting from the total so obtained  the  sum  of
18        the following amounts:
19                  (H)  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 such
23             total  as  distributions under the provisions of any
24             retirement or disability plan for employees  of  any
25             governmental  agency or unit, or retirement payments
26             to retired partners, which payments are excluded  in
27             computing  net  earnings  from  self  employment  by
28             Section  1402  of  the  Internal  Revenue  Code  and
29             regulations adopted pursuant thereto;
30                  (I)  The valuation limitation amount;
31                  (J)  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;
 
                            -26-     LRB093 05711 SJM 20212 a
 1                  (K)  An amount equal to all amounts included in
 2             taxable income as  modified  by  subparagraphs  (A),
 3             (B),  (C),  (D),  (E),  (F) and (G) which are exempt
 4             from taxation by this State either by reason of  its
 5             statutes   or  Constitution  or  by  reason  of  the
 6             Constitution, treaties or  statutes  of  the  United
 7             States; provided that, in the case of any statute of
 8             this State that exempts income derived from bonds or
 9             other  obligations  from  the tax imposed under this
10             Act, the amount exempted shall be the  interest  net
11             of bond premium amortization;
12                  (L)  With   the   exception   of   any  amounts
13             subtracted under subparagraph (K), an  amount  equal
14             to  the  sum of all amounts disallowed as deductions
15             by (i) Sections 171(a)  (2)  and  265(a)(2)  of  the
16             Internal  Revenue Code, as now or hereafter amended,
17             and all amounts of expenses  allocable  to  interest
18             and  disallowed  as  deductions by Section 265(1) of
19             the  Internal  Revenue  Code  of  1954,  as  now  or
20             hereafter amended; and (ii) for taxable years ending
21             on or after August  13,  1999,  Sections  171(a)(2),
22             265,  280C,  and  832(b)(5)(B)(i)  of  the  Internal
23             Revenue  Code;  the  provisions of this subparagraph
24             are exempt from the provisions of Section 250;
25                  (M)  An  amount  equal   to   those   dividends
26             included   in  such  total  which  were  paid  by  a
27             corporation which conducts business operations in an
28             Enterprise Zone or zones created under the  Illinois
29             Enterprise  Zone  Act and conducts substantially all
30             of its operations in an Enterprise Zone or Zones;
31                  (N)  An amount equal to any  contribution  made
32             to  a  job  training project established pursuant to
33             the Tax Increment Allocation Redevelopment Act;
34                  (O)  An  amount  equal   to   those   dividends
 
                            -27-     LRB093 05711 SJM 20212 a
 1             included   in   such  total  that  were  paid  by  a
 2             corporation that conducts business operations  in  a
 3             federally  designated Foreign Trade Zone or Sub-Zone
 4             and  that  is  designated  a  High  Impact  Business
 5             located  in  Illinois;   provided   that   dividends
 6             eligible  for the deduction provided in subparagraph
 7             (M) of paragraph (2) of this subsection shall not be
 8             eligible  for  the  deduction  provided  under  this
 9             subparagraph (O);
10                  (P)  An amount  equal  to  the  amount  of  the
11             deduction  used  to  compute  the federal income tax
12             credit for restoration of substantial  amounts  held
13             under  claim  of right for the taxable year pursuant
14             to Section 1341 of  the  Internal  Revenue  Code  of
15             1986;
16                  (Q)  For  taxable  year 1999 and thereafter, an
17             amount equal to the amount of any (i) distributions,
18             to the extent includible in gross income for federal
19             income tax purposes, made to the taxpayer because of
20             his or her status as a  victim  of  persecution  for
21             racial  or  religious reasons by Nazi Germany or any
22             other Axis regime or as an heir of  the  victim  and
23             (ii)  items  of  income, to the extent includible in
24             gross  income  for  federal  income  tax   purposes,
25             attributable  to, derived from or in any way related
26             to assets stolen from,  hidden  from,  or  otherwise
27             lost  to  a  victim  of  persecution  for  racial or
28             religious reasons by Nazi Germany or any other  Axis
29             regime immediately prior to, during, and immediately
30             after  World  War II, including, but not limited to,
31             interest on the  proceeds  receivable  as  insurance
32             under policies issued to a victim of persecution for
33             racial  or  religious reasons by Nazi Germany or any
34             other Axis regime by  European  insurance  companies
 
                            -28-     LRB093 05711 SJM 20212 a
 1             immediately  prior  to  and  during  World  War  II;
 2             provided,  however,  this  subtraction  from federal
 3             adjusted gross  income  does  not  apply  to  assets
 4             acquired  with such assets or with the proceeds from
 5             the sale of such  assets;  provided,  further,  this
 6             paragraph shall only apply to a taxpayer who was the
 7             first  recipient of such assets after their recovery
 8             and who is a victim of  persecution  for  racial  or
 9             religious  reasons by Nazi Germany or any other Axis
10             regime or as an heir of the victim.  The  amount  of
11             and  the  eligibility  for  any  public  assistance,
12             benefit,  or  similar entitlement is not affected by
13             the  inclusion  of  items  (i)  and  (ii)  of   this
14             paragraph  in  gross  income  for federal income tax
15             purposes.  This  paragraph  is   exempt   from   the
16             provisions of Section 250;
17                  (R)  For    each   taxable   years   2001   and
18             thereafter, for the taxable  year  ending  prior  to
19             December  31,  2003  in which the bonus depreciation
20             deduction (30% or 50% of the adjusted basis  of  the
21             qualified  property)  is  taken  on  the  taxpayer's
22             federal  income  tax  return under subsection (k) of
23             Section 168 of the Internal  Revenue  Code  and  for
24             each subsequent applicable taxable year ending prior
25             to  December 31, 2003 thereafter, an amount equal to
26             "x", where:
27                       (1)  "y"  equals   the   amount   of   the
28                  depreciation  deduction  taken  for the taxable
29                  year  on  the  taxpayer's  federal  income  tax
30                  return  on  property  for   which   the   bonus
31                  depreciation  deduction  (30%  or  50%  of  the
32                  adjusted  basis  of the qualified property) was
33                  taken in  any  year  under  subsection  (k)  of
34                  Section  168  of the Internal Revenue Code, but
 
                            -29-     LRB093 05711 SJM 20212 a
 1                  not including the bonus depreciation deduction;
 2                  and
 3                       (2)  for  property  on   which   a   bonus
 4                  depreciation  deduction  of 30% of the adjusted
 5                  basis was taken, "x" equals "y"  multiplied  by
 6                  30 and then divided by 70 (or "y" multiplied by
 7                  0.429)  and,  for  property  on  which  a bonus
 8                  depreciation deduction of 50% of  the  adjusted
 9                  basis  was  taken, "x" equals "y" multiplied by
10                  1.0.
11                  The  aggregate  amount  deducted   under   this
12             subparagraph  in all taxable years for any one piece
13             of property may not exceed the amount of  the  bonus
14             depreciation  deduction  (30% or 50% of the adjusted
15             basis of  the  qualified  property)  taken  on  that
16             property on the taxpayer's federal income tax return
17             under  subsection (k) of Section 168 of the Internal
18             Revenue Code;
19                  (R-1)  For taxable years  ending  on  or  after
20             December 31, 2003, an amount equal to the excess, if
21             any,   of   the   federal  taxable  income  properly
22             reportable by the taxpayer  for  the  taxable  year,
23             plus   any   addition  required  to  be  made  under
24             subparagraph (G-10) for the taxable year,  over  the
25             taxable  income  that  would have been reportable by
26             the taxpayer if the taxpayer:
27                       (1)   had made the election in  subsection
28                  (k)(2)(C)(iii)  of  Section 168 of the Internal
29                  Revenue Code for all  property  qualifying  for
30                  bonus  depreciation (30% or 50% of the adjusted
31                  basis  of  the  qualifying  property)  for  all
32                  taxable years; and
33                       (2)  had made no  election  under  Section
34                  179(a)  of  the  Internal  Revenue Code for any
 
                            -30-     LRB093 05711 SJM 20212 a
 1                  taxable year ending on or  after  December  31,
 2                  2003  to  treat  the cost of any property as an
 3                  expense.
 4             This  subparagraph  (R-1)   is   exempt   from   the
 5             provisions of Section 250; and
 6                  (S)  If  the taxpayer reports a capital gain or
 7             loss on the taxpayer's federal income tax return for
 8             the taxable year based on  a  sale  or  transfer  of
 9             property  for which the taxpayer was required in any
10             taxable year to make an addition modification  under
11             subparagraph  (G-10),  then  an amount equal to that
12             addition modification.
13                  The taxpayer is allowed to take  the  deduction
14             under  this  subparagraph  only once with respect to
15             any one piece of property.
16             (3)  Limitation.  The  amount  of  any  modification
17        otherwise  required  under  this  subsection shall, under
18        regulations prescribed by the Department, be adjusted  by
19        any  amounts  included  therein which were properly paid,
20        credited, or required to be distributed,  or  permanently
21        set  aside  for charitable purposes pursuant  to Internal
22        Revenue Code Section 642(c) during the taxable year.

23        (d)  Partnerships.
24             (1)  In general. In the case of a partnership,  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 or dividends
32             during the taxable year to the extent excluded  from
33             gross income in the computation of taxable income;
34                  (B)  An  amount  equal  to  the  amount  of tax
 
                            -31-     LRB093 05711 SJM 20212 a
 1             imposed by this Act  to  the  extent  deducted  from
 2             gross income for the taxable year;
 3                  (C)  The  amount  of  deductions allowed to the
 4             partnership pursuant  to  Section  707  (c)  of  the
 5             Internal  Revenue  Code  in  calculating its taxable
 6             income;
 7                  (D)  An amount  equal  to  the  amount  of  the
 8             capital  gain deduction allowable under the Internal
 9             Revenue Code, to  the  extent  deducted  from  gross
10             income in the computation of taxable income;
11                  (D-5)  For  taxable years ending after December
12             31, 2000 2001 and thereafter, an amount equal to the
13             bonus depreciation deduction  (30%  or  50%  of  the
14             adjusted  basis  of the qualified property) taken on
15             the taxpayer's federal income  tax  return  for  the
16             taxable  year under subsection (k) of Section 168 of
17             the  Internal  Revenue  Code  with  respect  to  any
18             property and, for taxable years ending on  or  after
19             December  31, 2003, an amount equal to any deduction
20             taken for the taxable year under Section 179 of  the
21             Internal  Revenue Code with respect to any property;
22             and
23                  (D-6)  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  (D-5),  then  an  amount  equal to the
29             aggregate amount of  the  deductions  taken  in  all
30             taxable  years  under subparagraph (O) or (O-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;
 
                            -32-     LRB093 05711 SJM 20212 a
 1        and by deducting from the total so obtained the following
 2        amounts:
 3                  (E)  The valuation limitation amount;
 4                  (F)  An amount equal to the amount of  any  tax
 5             imposed  by  this  Act  which  was  refunded  to the
 6             taxpayer and included in such total for the  taxable
 7             year;
 8                  (G)  An amount equal to all amounts included in
 9             taxable  income  as  modified  by subparagraphs (A),
10             (B), (C) and (D) which are exempt from  taxation  by
11             this  State  either  by  reason  of  its statutes or
12             Constitution  or  by  reason  of  the  Constitution,
13             treaties or statutes of the United States;  provided
14             that,  in the case of any statute of this State that
15             exempts  income  derived   from   bonds   or   other
16             obligations from the tax imposed under this Act, the
17             amount  exempted  shall  be the interest net of bond
18             premium amortization;
19                  (H)  Any  income  of  the   partnership   which
20             constitutes  personal  service  income as defined in
21             Section 1348 (b) (1) of the  Internal  Revenue  Code
22             (as  in  effect  December  31, 1981) or a reasonable
23             allowance  for  compensation  paid  or  accrued  for
24             services rendered by partners  to  the  partnership,
25             whichever is greater;
26                  (I)  An  amount  equal to all amounts of income
27             distributable to an entity subject to  the  Personal
28             Property  Tax  Replacement  Income  Tax  imposed  by
29             subsections  (c)  and (d) of Section 201 of this Act
30             including  amounts  distributable  to  organizations
31             exempt from federal income tax by reason of  Section
32             501(a) of the Internal Revenue Code;
33                  (J)  With   the   exception   of   any  amounts
34             subtracted under subparagraph (G), an  amount  equal
 
                            -33-     LRB093 05711 SJM 20212 a
 1             to  the  sum of all amounts disallowed as deductions
 2             by (i)  Sections  171(a)  (2),  and  265(2)  of  the
 3             Internal  Revenue  Code of 1954, as now or hereafter
 4             amended, and all amounts of  expenses  allocable  to
 5             interest  and  disallowed  as  deductions by Section
 6             265(1) of the  Internal  Revenue  Code,  as  now  or
 7             hereafter amended; and (ii) for taxable years ending
 8             on  or  after  August  13, 1999, Sections 171(a)(2),
 9             265,  280C,  and  832(b)(5)(B)(i)  of  the  Internal
10             Revenue Code; the provisions  of  this  subparagraph
11             are exempt from the provisions of Section 250;
12                  (K)  An   amount   equal   to  those  dividends
13             included  in  such  total  which  were  paid  by   a
14             corporation which conducts business operations in an
15             Enterprise  Zone or zones created under the Illinois
16             Enterprise Zone Act, enacted  by  the  82nd  General
17             Assembly,  and  conducts  substantially  all  of its
18             operations in an Enterprise Zone or Zones;
19                  (L)  An amount equal to any  contribution  made
20             to  a  job  training project established pursuant to
21             the   Real   Property   Tax   Increment   Allocation
22             Redevelopment Act;
23                  (M)  An  amount  equal   to   those   dividends
24             included   in   such  total  that  were  paid  by  a
25             corporation that conducts business operations  in  a
26             federally  designated Foreign Trade Zone or Sub-Zone
27             and  that  is  designated  a  High  Impact  Business
28             located  in  Illinois;   provided   that   dividends
29             eligible  for the deduction provided in subparagraph
30             (K) of paragraph (2) of this subsection shall not be
31             eligible  for  the  deduction  provided  under  this
32             subparagraph (M);
33                  (N)  An amount  equal  to  the  amount  of  the
34             deduction  used  to  compute  the federal income tax
 
                            -34-     LRB093 05711 SJM 20212 a
 1             credit for restoration of substantial  amounts  held
 2             under  claim  of right for the taxable year pursuant
 3             to Section 1341 of  the  Internal  Revenue  Code  of
 4             1986;
 5                  (O)  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% or 50% 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%  or  50%  of  the
20                  adjusted  basis  of the qualified property) was
21                  taken in  any  year  under  subsection  (k)  of
22                  Section  168  of the Internal Revenue Code, but
23                  not including the bonus depreciation deduction;
24                  and
25                       (2)  for  property  on   which   a   bonus
26                  depreciation  deduction  of 30% of the adjusted
27                  basis was taken, "x" equals "y"  multiplied  by
28                  30 and then divided by 70 (or "y" multiplied by
29                  0.429)  and,  for  property  on  which  a bonus
30                  depreciation deduction of 50% of  the  adjusted
31                  basis  was  taken, "x" equals "y" multiplied by
32                  1.0.
33                  The  aggregate  amount  deducted   under   this
34             subparagraph  in all taxable years for any one piece
 
                            -35-     LRB093 05711 SJM 20212 a
 1             of property may not exceed the amount of  the  bonus
 2             depreciation  deduction  (30% or 50% of the adjusted
 3             basis of  the  qualified  property)  taken  on  that
 4             property on the taxpayer's federal income tax return
 5             under  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  qualifying  for
18                  bonus  depreciation (30% or 50% of the adjusted
19                  basis  of  the  qualifying  property)  for  all
20                  taxable years; and
21                       (2)  had made no  election  under  Section
22                  179(a)  of  the  Internal  Revenue Code for any
23                  taxable year ending on or  after  December  31,
24                  2003  to  treat  the cost of any property as an
25                  expense.
26             This  subparagraph  (O-1)   is   exempt   from   the
27             provisions of Section 250; and
28                  (P)  If  the taxpayer reports a capital gain or
29             loss on the taxpayer's federal income tax return for
30             the taxable year based on  a  sale  or  transfer  of
31             property  for which the taxpayer was required in any
32             taxable year to make an addition modification  under
33             subparagraph  (D-5),  then  an  amount equal to that
34             addition modification.
 
                            -36-     LRB093 05711 SJM 20212 a
 1                  The taxpayer is allowed to take  the  deduction
 2             under  this  subparagraph  only once with respect to
 3             any one piece of property.

 4        (e)  Gross income; adjusted gross income; taxable income.
 5             (1)  In  general.   Subject  to  the  provisions  of
 6        paragraph (2) and subsection (b)  (3),  for  purposes  of
 7        this  Section  and  Section  803(e),  a  taxpayer's gross
 8        income, adjusted gross income, or taxable income for  the
 9        taxable  year  shall  mean  the  amount  of gross income,
10        adjusted  gross  income  or   taxable   income   properly
11        reportable  for  federal  income  tax  purposes  for  the
12        taxable year under the provisions of the Internal Revenue
13        Code.  Taxable income may be less than zero. However, for
14        taxable years ending on or after December 31,  1986,  net
15        operating  loss  carryforwards  from taxable years ending
16        prior to December 31, 1986, may not  exceed  the  sum  of
17        federal  taxable  income  for the taxable year before net
18        operating loss deduction, plus  the  excess  of  addition
19        modifications  over  subtraction  modifications  for  the
20        taxable year.  For taxable years ending prior to December
21        31, 1986, taxable income may never be an amount in excess
22        of the net operating loss for the taxable year as defined
23        in subsections (c) and (d) of Section 172 of the Internal
24        Revenue  Code,  provided  that  when  taxable income of a
25        corporation (other  than  a  Subchapter  S  corporation),
26        trust,   or   estate  is  less  than  zero  and  addition
27        modifications, other than those provided by  subparagraph
28        (E)  of  paragraph (2) of subsection (b) for corporations
29        or subparagraph (E) of paragraph (2)  of  subsection  (c)
30        for trusts and estates, exceed subtraction modifications,
31        an   addition  modification  must  be  made  under  those
32        subparagraphs for any other taxable  year  to  which  the
33        taxable  income  less  than  zero (net operating loss) is
34        applied under Section 172 of the Internal Revenue Code or
 
                            -37-     LRB093 05711 SJM 20212 a
 1        under  subparagraph  (E)  of  paragraph   (2)   of   this
 2        subsection (e) applied in conjunction with Section 172 of
 3        the Internal Revenue Code.
 4             (2)  Special rule.  For purposes of paragraph (1) of
 5        this  subsection,  the taxable income properly reportable
 6        for federal income tax purposes shall mean:
 7                  (A)  Certain life insurance companies.  In  the
 8             case  of a life insurance company subject to the tax
 9             imposed by Section 801 of the Internal Revenue Code,
10             life insurance  company  taxable  income,  plus  the
11             amount  of  distribution  from pre-1984 policyholder
12             surplus accounts as calculated under Section 815a of
13             the Internal Revenue Code;
14                  (B)  Certain other insurance companies.  In the
15             case of mutual insurance companies  subject  to  the
16             tax  imposed  by Section 831 of the Internal Revenue
17             Code, insurance company taxable income;
18                  (C)  Regulated investment  companies.   In  the
19             case  of  a  regulated investment company subject to
20             the tax imposed  by  Section  852  of  the  Internal
21             Revenue Code, investment company taxable income;
22                  (D)  Real  estate  investment  trusts.   In the
23             case of a real estate investment  trust  subject  to
24             the  tax  imposed  by  Section  857  of the Internal
25             Revenue Code, real estate investment  trust  taxable
26             income;
27                  (E)  Consolidated corporations.  In the case of
28             a  corporation  which  is  a member of an affiliated
29             group of corporations filing a  consolidated  income
30             tax  return  for the taxable year for federal income
31             tax purposes, taxable income determined as  if  such
32             corporation  had filed a separate return for federal
33             income tax purposes for the taxable  year  and  each
34             preceding  taxable year for which it was a member of
 
                            -38-     LRB093 05711 SJM 20212 a
 1             an  affiliated   group.   For   purposes   of   this
 2             subparagraph, the taxpayer's separate taxable income
 3             shall  be  determined as if the election provided by
 4             Section 243(b) (2) of the Internal Revenue Code  had
 5             been in effect for all such years;
 6                  (F)  Cooperatives.     In   the   case   of   a
 7             cooperative corporation or association, the  taxable
 8             income of such organization determined in accordance
 9             with  the provisions of Section 1381 through 1388 of
10             the Internal Revenue Code;
11                  (G)  Subchapter S corporations.   In  the  case
12             of:  (i)  a Subchapter S corporation for which there
13             is in effect an election for the taxable year  under
14             Section  1362  of  the  Internal  Revenue  Code, the
15             taxable income of  such  corporation  determined  in
16             accordance  with  Section  1363(b)  of  the Internal
17             Revenue Code, except that taxable income shall  take
18             into  account  those  items  which  are  required by
19             Section 1363(b)(1) of the Internal Revenue  Code  to
20             be  separately  stated;  and  (ii)  a  Subchapter  S
21             corporation  for  which there is in effect a federal
22             election  to  opt  out  of  the  provisions  of  the
23             Subchapter S Revision Act of 1982 and  have  applied
24             instead  the  prior federal Subchapter S rules as in
25             effect on July 1, 1982, the taxable income  of  such
26             corporation   determined   in  accordance  with  the
27             federal Subchapter S rules as in effect on  July  1,
28             1982; and
29                  (H)  Partnerships.     In   the   case   of   a
30             partnership, taxable income determined in accordance
31             with Section  703  of  the  Internal  Revenue  Code,
32             except  that  taxable income shall take into account
33             those items which are required by Section  703(a)(1)
34             to  be  separately  stated  but which would be taken
 
                            -39-     LRB093 05711 SJM 20212 a
 1             into account by an  individual  in  calculating  his
 2             taxable income.

 3        (f)  Valuation limitation amount.
 4             (1)  In  general.   The  valuation limitation amount
 5        referred to in subsections (a) (2) (G), (c) (2)  (I)  and
 6        (d)(2) (E) is an amount equal to:
 7                  (A)  The   sum   of   the  pre-August  1,  1969
 8             appreciation amounts (to the  extent  consisting  of
 9             gain reportable under the provisions of Section 1245
10             or  1250  of  the  Internal  Revenue  Code)  for all
11             property in respect of which such gain was  reported
12             for the taxable year; plus
13                  (B)  The   lesser   of   (i)  the  sum  of  the
14             pre-August 1,  1969  appreciation  amounts  (to  the
15             extent  consisting of capital gain) for all property
16             in respect of  which  such  gain  was  reported  for
17             federal income tax purposes for the taxable year, or
18             (ii)  the  net  capital  gain  for the taxable year,
19             reduced in either case by any amount  of  such  gain
20             included  in  the amount determined under subsection
21             (a) (2) (F) or (c) (2) (H).
22             (2)  Pre-August 1, 1969 appreciation amount.
23                  (A)  If  the  fair  market  value  of  property
24             referred   to   in   paragraph   (1)   was   readily
25             ascertainable on August 1, 1969, the  pre-August  1,
26             1969  appreciation  amount  for such property is the
27             lesser of (i) the excess of such fair  market  value
28             over the taxpayer's basis (for determining gain) for
29             such  property  on  that  date (determined under the
30             Internal Revenue Code as in effect on that date), or
31             (ii) the total  gain  realized  and  reportable  for
32             federal  income tax purposes in respect of the sale,
33             exchange or other disposition of such property.
34                  (B)  If  the  fair  market  value  of  property
 
                            -40-     LRB093 05711 SJM 20212 a
 1             referred  to  in  paragraph  (1)  was  not   readily
 2             ascertainable  on  August 1, 1969, the pre-August 1,
 3             1969 appreciation amount for such property  is  that
 4             amount  which bears the same ratio to the total gain
 5             reported in respect  of  the  property  for  federal
 6             income  tax  purposes  for  the taxable year, as the
 7             number of full calendar months in that part  of  the
 8             taxpayer's  holding  period  for the property ending
 9             July 31, 1969 bears to the number of  full  calendar
10             months  in  the taxpayer's entire holding period for
11             the property.
12                  (C)  The  Department   shall   prescribe   such
13             regulations  as  may  be  necessary to carry out the
14             purposes of this paragraph.

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

18        (h)  Legislative intention.  Except as expressly provided
19    by  this  Section  there  shall  be   no   modifications   or
20    limitations on the amounts of income, gain, loss or deduction
21    taken  into  account  in  determining  gross income, adjusted
22    gross  income  or  taxable  income  for  federal  income  tax
23    purposes for the taxable year, or in the amount of such items
24    entering into the computation of base income and  net  income
25    under  this  Act for such taxable year, whether in respect of
26    property values as of August 1, 1969 or otherwise.
27    (Source: P.A. 91-192, eff.  7-20-99;  91-205,  eff.  7-20-99;
28    91-357,  eff.  7-29-99;  91-541,  eff.  8-13-99; 91-676, eff.
29    12-23-99; 91-845, eff. 6-22-00; 91-913, eff.  1-1-01;  92-16,
30    eff.  6-28-01;  92-244,  eff.  8-3-01;  92-439, eff. 8-17-01;
31    92-603, eff. 6-28-02;  92-626,  eff.  7-11-02;  92-651,  eff.
32    7-11-02; 92-846, eff. 8-23-02; revised 10-15-03.)
 
                            -41-     LRB093 05711 SJM 20212 a
 1        Section  99.  Effective date.  This Act takes effect upon
 2    becoming law.".