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1 | AN ACT concerning college savings.
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2 | Be it enacted by the People of the State of Illinois, | ||||||||||||||||||||||||||
3 | represented in the General Assembly:
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4 | Section 5. The State Treasurer Act is amended by changing
| ||||||||||||||||||||||||||
5 | Section 16.5 as follows:
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6 | (15 ILCS 505/16.5)
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7 | Sec. 16.5. College Savings Pool. The State Treasurer may | ||||||||||||||||||||||||||
8 | establish and
administer a College Savings Pool to supplement | ||||||||||||||||||||||||||
9 | and enhance the investment
opportunities otherwise available | ||||||||||||||||||||||||||
10 | to persons seeking to finance the costs of
higher education. | ||||||||||||||||||||||||||
11 | The State Treasurer, in administering the College Savings
Pool, | ||||||||||||||||||||||||||
12 | may receive moneys paid into the pool by a participant and may | ||||||||||||||||||||||||||
13 | serve as
the fiscal agent of that participant for the purpose | ||||||||||||||||||||||||||
14 | of holding and investing
those moneys.
| ||||||||||||||||||||||||||
15 | "Participant", as used in this Section, means any person | ||||||||||||||||||||||||||
16 | who makes
investments in the pool. "Designated beneficiary", as | ||||||||||||||||||||||||||
17 | used in this Section,
means any person on whose behalf an | ||||||||||||||||||||||||||
18 | account is established in the College
Savings Pool by a | ||||||||||||||||||||||||||
19 | participant. Both in-state and out-of-state persons may be
| ||||||||||||||||||||||||||
20 | participants and designated beneficiaries in the College | ||||||||||||||||||||||||||
21 | Savings Pool.
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22 | New accounts in the College Savings Pool shall be processed | ||||||||||||||||||||||||||
23 | through
participating financial institutions. "Participating | ||||||||||||||||||||||||||
24 | financial institution",
as used in this Section, means any | ||||||||||||||||||||||||||
25 | financial institution insured by the Federal
Deposit Insurance | ||||||||||||||||||||||||||
26 | Corporation and lawfully doing business in the State of
| ||||||||||||||||||||||||||
27 | Illinois and any credit union approved by the State Treasurer | ||||||||||||||||||||||||||
28 | and lawfully
doing business in the State of Illinois that | ||||||||||||||||||||||||||
29 | agrees to process new accounts in
the College Savings Pool. | ||||||||||||||||||||||||||
30 | Participating financial institutions may charge a
processing | ||||||||||||||||||||||||||
31 | fee to participants to open an account in the pool that shall | ||||||||||||||||||||||||||
32 | not
exceed $30 until the year 2001. Beginning in 2001 and every |
| |||||||
| |||||||
1 | year thereafter,
the maximum fee limit shall be adjusted by the | ||||||
2 | Treasurer based on the Consumer
Price Index for the North | ||||||
3 | Central Region as published by the United States
Department of | ||||||
4 | Labor, Bureau of Labor Statistics for the immediately preceding
| ||||||
5 | calendar year. Every contribution received by a financial | ||||||
6 | institution for
investment in the College Savings Pool shall be | ||||||
7 | transferred from the financial
institution to a location | ||||||
8 | selected by the State Treasurer within one business
day | ||||||
9 | following the day that the funds must be made available in | ||||||
10 | accordance with
federal law. All communications from the State | ||||||
11 | Treasurer to participants shall
reference the participating | ||||||
12 | financial institution at which the account was
processed.
| ||||||
13 | The Treasurer may invest the moneys in the College Savings | ||||||
14 | Pool in the same
manner, in the same types of investments, and | ||||||
15 | subject to the same limitations
provided for the investment of | ||||||
16 | moneys by the Illinois State Board of
Investment. To enhance | ||||||
17 | the safety and liquidity of the College Savings Pool,
to ensure | ||||||
18 | the diversification of the investment portfolio of the pool, | ||||||
19 | and in
an effort to keep investment dollars in the State of | ||||||
20 | Illinois, the State
Treasurer shall make a percentage of each | ||||||
21 | account available for investment in
participating financial | ||||||
22 | institutions doing business in the State. The State
Treasurer | ||||||
23 | shall deposit with the participating financial institution at | ||||||
24 | which
the account was processed the following percentage of | ||||||
25 | each account at a
prevailing rate offered by the institution, | ||||||
26 | provided that the deposit is
federally insured or fully | ||||||
27 | collateralized and the institution accepts the
deposit: 10% of | ||||||
28 | the total amount of each account for which the current age of
| ||||||
29 | the beneficiary is less than 7 years of age, 20% of the total | ||||||
30 | amount of each
account for which the beneficiary is at least 7 | ||||||
31 | years of age and less than 12
years of age, and 50% of the total | ||||||
32 | amount of each account for which the current
age of the | ||||||
33 | beneficiary is at least 12 years of age. The State Treasurer | ||||||
34 | shall
adjust each account at least annually to ensure | ||||||
35 | compliance with this Section.
The Treasurer shall develop, | ||||||
36 | publish, and implement an investment policy
covering the |
| |||||||
| |||||||
1 | investment of the moneys in the College Savings Pool. The | ||||||
2 | policy
shall be published (i) at least once each year in at | ||||||
3 | least one newspaper of
general circulation in both Springfield | ||||||
4 | and Chicago and (ii) each year as part
of the audit of the | ||||||
5 | College Savings Pool by the Auditor General, which shall be
| ||||||
6 | distributed to all participants. The Treasurer shall notify all | ||||||
7 | participants
in writing, and the Treasurer shall publish in a | ||||||
8 | newspaper of general
circulation in both Chicago and | ||||||
9 | Springfield, any changes to the previously
published | ||||||
10 | investment policy at least 30 calendar days before implementing | ||||||
11 | the
policy. Any investment policy adopted by the Treasurer | ||||||
12 | shall be reviewed and
updated if necessary within 90 days | ||||||
13 | following the date that the State Treasurer
takes office.
| ||||||
14 | Participants shall be required to use moneys distributed | ||||||
15 | from the College
Savings Pool for qualified expenses at | ||||||
16 | eligible educational institutions.
"Qualified expenses", as | ||||||
17 | used in this Section, means the following: (i)
tuition, fees, | ||||||
18 | and the costs of books, supplies, and equipment required for
| ||||||
19 | enrollment or attendance at an eligible educational | ||||||
20 | institution and (ii)
certain room and board expenses incurred | ||||||
21 | while attending an eligible
educational institution at least | ||||||
22 | half-time. "Eligible educational
institutions", as used in | ||||||
23 | this Section, means public and private colleges,
junior | ||||||
24 | colleges, graduate schools, and certain vocational | ||||||
25 | institutions that are
described in Section 481 of the Higher | ||||||
26 | Education Act of 1965 (20 U.S.C. 1088)
and that are eligible to | ||||||
27 | participate in Department of Education student aid
programs. A | ||||||
28 | student shall be considered to be enrolled at
least half-time | ||||||
29 | if the student is enrolled for at least half the full-time
| ||||||
30 | academic work load for the course of study the student is | ||||||
31 | pursuing as
determined under the standards of the institution | ||||||
32 | at which the student is
enrolled. Distributions made from the | ||||||
33 | pool for qualified expenses shall be
made directly to the | ||||||
34 | eligible educational institution, directly to a vendor, or
in | ||||||
35 | the form of a check payable to both the beneficiary and the | ||||||
36 | institution or
vendor. Any moneys that are distributed in any |
| |||||||
| |||||||
1 | other manner or that are used
for expenses other than qualified | ||||||
2 | expenses at an eligible educational
institution shall be | ||||||
3 | subject to a penalty of 10% of the earnings unless the
| ||||||
4 | beneficiary dies, becomes disabled, or receives a scholarship | ||||||
5 | that equals or
exceeds the distribution. Penalties shall be | ||||||
6 | withheld at the time the
distribution is made.
| ||||||
7 | The Treasurer shall limit the contributions that may be | ||||||
8 | made on behalf of a
designated beneficiary based on an | ||||||
9 | actuarial estimate of what is required to
pay tuition, fees, | ||||||
10 | and room and board for 5 undergraduate years at the highest
| ||||||
11 | cost eligible educational institution. The contributions made | ||||||
12 | on behalf of a
beneficiary who is also a beneficiary under the | ||||||
13 | Illinois Prepaid Tuition
Program shall be further restricted to | ||||||
14 | ensure that the contributions in both
programs combined do not | ||||||
15 | exceed the limit established for the College Savings
Pool. The | ||||||
16 | Treasurer shall provide the Illinois Student Assistance | ||||||
17 | Commission
each year at a time designated by the Commission, an | ||||||
18 | electronic report of all
participant accounts in the | ||||||
19 | Treasurer's College Savings Pool, listing total
contributions | ||||||
20 | and disbursements from each individual account during the
| ||||||
21 | previous calendar year. As soon thereafter as is possible | ||||||
22 | following receipt of
the Treasurer's report, the Illinois | ||||||
23 | Student Assistance Commission shall, in
turn, provide the | ||||||
24 | Treasurer with an electronic report listing those College
| ||||||
25 | Savings Pool participants who also participate in the State's | ||||||
26 | prepaid tuition
program, administered by the Commission. The | ||||||
27 | Commission shall be responsible
for filing any combined tax | ||||||
28 | reports regarding State qualified savings programs
required by | ||||||
29 | the United States Internal Revenue Service. The Treasurer shall
| ||||||
30 | work with the Illinois Student Assistance Commission to | ||||||
31 | coordinate the
marketing of the College Savings Pool and the | ||||||
32 | Illinois Prepaid Tuition
Program when considered beneficial by | ||||||
33 | the Treasurer and the Director of the
Illinois Student | ||||||
34 | Assistance
Commission. The Treasurer's office shall not | ||||||
35 | publicize or otherwise market the
College Savings Pool or | ||||||
36 | accept any moneys into the College Savings Pool prior
to March |
| |||||||
| |||||||
1 | 1, 2000. The Treasurer shall provide a separate accounting for | ||||||
2 | each
designated beneficiary to each participant, the Illinois | ||||||
3 | Student Assistance
Commission, and the participating financial | ||||||
4 | institution at which the account
was processed. No interest in | ||||||
5 | the program may be pledged as security for a
loan.
| ||||||
6 | The assets of the College Savings Pool and its income and | ||||||
7 | operation shall
be exempt from all taxation by the State of | ||||||
8 | Illinois and any of its
subdivisions. The accrued earnings on | ||||||
9 | investments in the Pool once disbursed
on behalf of a | ||||||
10 | designated beneficiary shall be similarly exempt from all
| ||||||
11 | taxation by the State of Illinois and its subdivisions, so long | ||||||
12 | as they are
used for qualified expenses. Contributions during | ||||||
13 | the taxable year to a
College Savings Pool account
or other | ||||||
14 | qualified tuition program under Section 529 of the Internal | ||||||
15 | Revenue
Code (26 U.S.C. 529)
during the taxable year
may be | ||||||
16 | deducted from adjusted gross income as
provided
in Section 203 | ||||||
17 | of the Illinois Income Tax Act. The provisions of this
| ||||||
18 | paragraph are exempt from Section 250 of the Illinois Income | ||||||
19 | Tax Act.
| ||||||
20 | The Treasurer shall adopt rules he or she considers | ||||||
21 | necessary for the
efficient administration of the College | ||||||
22 | Savings Pool. The rules shall provide
whatever additional | ||||||
23 | parameters and restrictions are necessary to ensure that
the | ||||||
24 | College Savings Pool meets all of the requirements for a | ||||||
25 | qualified
state
tuition program under Section 529 of the | ||||||
26 | Internal Revenue Code (26 U.S.C. 529).
The rules shall provide | ||||||
27 | for the administration expenses of the pool to be paid
from its | ||||||
28 | earnings and for the investment earnings in excess of the | ||||||
29 | expenses and
all moneys collected as penalties to be credited | ||||||
30 | or paid monthly to the several
participants in the pool in a | ||||||
31 | manner which equitably reflects the differing
amounts of their | ||||||
32 | respective investments in the pool and the differing periods
of | ||||||
33 | time for which those amounts were in the custody of the pool. | ||||||
34 | Also, the
rules shall require the maintenance of records that | ||||||
35 | enable the Treasurer's
office to produce a report for each | ||||||
36 | account in the pool at least annually that
documents the |
| |||||||
| |||||||
1 | account balance and investment earnings. Notice of any proposed
| ||||||
2 | amendments to the rules and regulations shall be provided to | ||||||
3 | all participants
prior to adoption. Amendments to rules and | ||||||
4 | regulations shall apply only to
contributions made after the | ||||||
5 | adoption of the amendment.
| ||||||
6 | Upon creating the College Savings Pool, the State Treasurer | ||||||
7 | shall give bond
with 2 or more sufficient sureties, payable to | ||||||
8 | and for the benefit of the
participants in the College Savings | ||||||
9 | Pool, in the penal sum of $1,000,000,
conditioned upon the | ||||||
10 | faithful discharge of his or her duties in relation to
the | ||||||
11 | College Savings Pool.
| ||||||
12 | No contributions to the College Savings Pool
authorized by | ||||||
13 | this
Section
shall
be
considered in evaluating the financial | ||||||
14 | situation of the designated beneficiary
or be
deemed a | ||||||
15 | financial resource of or a form of financial aid or assistance | ||||||
16 | to the
designated beneficiary, for purposes of determining | ||||||
17 | eligibility for any
scholarship,
grant, or monetary assistance | ||||||
18 | awarded by the Illinois Student Assistance
Commission,
the | ||||||
19 | State, or any agency thereof; nor shall contributions to the | ||||||
20 | College
Savings Pool
reduce the amount of any scholarship, | ||||||
21 | grant, or monetary assistance that the
designated beneficiary | ||||||
22 | is eligible to be awarded by the Illinois Student
Assistance
| ||||||
23 | Commission, the State, or any agency thereof in accordance with | ||||||
24 | the provisions
of any
State law.
| ||||||
25 | (Source: P.A. 91-607, eff. 1-1-00; 91-829, eff. 1-1-01; 92-16, | ||||||
26 | eff. 6-28-01;
92-439, eff. 8-17-01; 92-626, eff. 7-11-02.)
| ||||||
27 | Section 10. The Illinois Income Tax Act is amended by | ||||||
28 | changing
Section 203 as follows:
| ||||||
29 | (35 ILCS 5/203) (from Ch. 120, par. 2-203)
| ||||||
30 | Sec. 203. Base income defined.
| ||||||
31 | (a) Individuals.
| ||||||
32 | (1) In general. In the case of an individual, base | ||||||
33 | income means an
amount equal to the taxpayer's adjusted | ||||||
34 | gross income for the taxable
year as modified by paragraph |
| |||||||
| |||||||
1 | (2).
| ||||||
2 | (2) Modifications. The adjusted gross income referred | ||||||
3 | to in
paragraph (1) shall be modified by adding thereto the | ||||||
4 | sum of the
following amounts:
| ||||||
5 | (A) An amount equal to all amounts paid or accrued | ||||||
6 | to the taxpayer
as interest or dividends during the | ||||||
7 | taxable year to the extent excluded
from gross income | ||||||
8 | in the computation of adjusted gross income, except | ||||||
9 | stock
dividends of qualified public utilities | ||||||
10 | described in Section 305(e) of the
Internal Revenue | ||||||
11 | Code;
| ||||||
12 | (B) An amount equal to the amount of tax imposed by | ||||||
13 | this Act to the
extent deducted from gross income in | ||||||
14 | the computation of adjusted gross
income for the | ||||||
15 | taxable year;
| ||||||
16 | (C) An amount equal to the amount received during | ||||||
17 | the taxable year
as a recovery or refund of real | ||||||
18 | property taxes paid with respect to the
taxpayer's | ||||||
19 | principal residence under the Revenue Act of
1939 and | ||||||
20 | for which a deduction was previously taken under | ||||||
21 | subparagraph (L) of
this paragraph (2) prior to July 1, | ||||||
22 | 1991, the retrospective application date of
Article 4 | ||||||
23 | of Public Act 87-17. In the case of multi-unit or | ||||||
24 | multi-use
structures and farm dwellings, the taxes on | ||||||
25 | the taxpayer's principal residence
shall be that | ||||||
26 | portion of the total taxes for the entire property | ||||||
27 | which is
attributable to such principal residence;
| ||||||
28 | (D) An amount equal to the amount of the capital | ||||||
29 | gain deduction
allowable under the Internal Revenue | ||||||
30 | Code, to the extent deducted from gross
income in the | ||||||
31 | computation of adjusted gross income;
| ||||||
32 | (D-5) An amount, to the extent not included in | ||||||
33 | adjusted gross income,
equal to the amount of money | ||||||
34 | withdrawn by the taxpayer in the taxable year from
a | ||||||
35 | medical care savings account and the interest earned on | ||||||
36 | the account in the
taxable year of a withdrawal |
| |||||||
| |||||||
1 | pursuant to subsection (b) of Section 20 of the
Medical | ||||||
2 | Care Savings Account Act or subsection (b) of Section | ||||||
3 | 20 of the
Medical Care Savings Account Act of 2000;
| ||||||
4 | (D-10) For taxable years ending after December 31, | ||||||
5 | 1997, an
amount equal to any eligible remediation costs | ||||||
6 | that the individual
deducted in computing adjusted | ||||||
7 | gross income and for which the
individual claims a | ||||||
8 | credit under subsection (l) of Section 201;
| ||||||
9 | (D-15) For taxable years 2001 and thereafter, an | ||||||
10 | amount equal to the
bonus depreciation deduction (30% | ||||||
11 | of the adjusted basis of the qualified
property) taken | ||||||
12 | on the taxpayer's federal income tax return for the | ||||||
13 | taxable
year under subsection (k) of Section 168 of the | ||||||
14 | Internal Revenue Code; and
| ||||||
15 | (D-16) If the taxpayer reports a capital gain or | ||||||
16 | loss on the
taxpayer's federal income tax return for | ||||||
17 | 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 taxable
| ||||||
22 | years under subparagraph (Z) with respect to that | ||||||
23 | 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 or | ||||||
28 | after January 1,
2002 and ending on or before December | ||||||
29 | 31, 2003 , in
the
case of a distribution from a | ||||||
30 | qualified tuition program under Section 529 of
the | ||||||
31 | Internal Revenue Code, other than (i) a distribution | ||||||
32 | from a College Savings
Pool created under Section 16.5 | ||||||
33 | of the State Treasurer Act or (ii) a
distribution from | ||||||
34 | the Illinois Prepaid Tuition Trust Fund, an amount | ||||||
35 | equal to
the amount excluded from gross income under | ||||||
36 | Section 529(c)(3)(B);
|
| |||||||
| |||||||
1 | and by deducting from the total so obtained the
sum of the | ||||||
2 | following amounts:
| ||||||
3 | (E) For taxable years ending before December 31, | ||||||
4 | 2001,
any amount included in such total in respect of | ||||||
5 | any compensation
(including but not limited to any | ||||||
6 | compensation paid or accrued to a
serviceman while a | ||||||
7 | prisoner of war or missing in action) paid to a | ||||||
8 | resident
by reason of being on active duty in the Armed | ||||||
9 | Forces of the United States
and in respect of any | ||||||
10 | compensation paid or accrued to a resident who as a
| ||||||
11 | governmental employee was a prisoner of war or missing | ||||||
12 | in action, and in
respect of any compensation paid to a | ||||||
13 | resident in 1971 or thereafter for
annual training | ||||||
14 | performed pursuant to Sections 502 and 503, Title 32,
| ||||||
15 | United States Code as a member of the Illinois National | ||||||
16 | Guard.
For taxable years ending on or after December | ||||||
17 | 31, 2001, any amount included in
such total in respect | ||||||
18 | of any compensation (including but not limited to any
| ||||||
19 | compensation paid or accrued to a serviceman while a | ||||||
20 | prisoner of war or missing
in action) paid to a | ||||||
21 | resident by reason of being a member of any component | ||||||
22 | of
the Armed Forces of the United States and in respect | ||||||
23 | of any compensation paid
or accrued to a resident who | ||||||
24 | as a governmental employee was a prisoner of war
or | ||||||
25 | missing in action, and in respect of any compensation | ||||||
26 | paid to a resident in
2001 or thereafter by reason of | ||||||
27 | being a member of the Illinois National Guard.
The | ||||||
28 | provisions of this amendatory Act of the 92nd General | ||||||
29 | Assembly are exempt
from the provisions of Section 250;
| ||||||
30 | (F) An amount equal to all amounts included in such | ||||||
31 | total pursuant
to the provisions of Sections 402(a), | ||||||
32 | 402(c), 403(a), 403(b), 406(a), 407(a),
and 408 of the | ||||||
33 | Internal Revenue Code, or included in such total as
| ||||||
34 | distributions under the provisions of any retirement | ||||||
35 | or disability plan for
employees of any governmental | ||||||
36 | agency or unit, or retirement payments to
retired |
| |||||||
| |||||||
1 | partners, which payments are excluded in computing net | ||||||
2 | earnings
from self employment by Section 1402 of the | ||||||
3 | Internal Revenue Code and
regulations adopted pursuant | ||||||
4 | thereto;
| ||||||
5 | (G) The valuation limitation amount;
| ||||||
6 | (H) An amount equal to the amount of any tax | ||||||
7 | imposed by this Act
which was refunded to the taxpayer | ||||||
8 | and included in such total for the
taxable year;
| ||||||
9 | (I) An amount equal to all amounts included in such | ||||||
10 | total pursuant
to the provisions of Section 111 of the | ||||||
11 | Internal Revenue Code as a
recovery of items previously | ||||||
12 | deducted from adjusted gross income in the
computation | ||||||
13 | of taxable income;
| ||||||
14 | (J) An amount equal to those dividends included in | ||||||
15 | such total which were
paid by a corporation which | ||||||
16 | conducts business operations in an Enterprise
Zone or | ||||||
17 | zones created under the Illinois Enterprise Zone Act, | ||||||
18 | and conducts
substantially all of its operations in an | ||||||
19 | Enterprise Zone or zones;
| ||||||
20 | (K) An amount equal to those dividends included in | ||||||
21 | such total that
were paid by a corporation that | ||||||
22 | conducts business operations in a federally
designated | ||||||
23 | Foreign Trade Zone or Sub-Zone and that is designated a | ||||||
24 | High Impact
Business located in Illinois; provided | ||||||
25 | that dividends eligible for the
deduction provided in | ||||||
26 | subparagraph (J) of paragraph (2) of this subsection
| ||||||
27 | shall not be eligible for the deduction provided under | ||||||
28 | this subparagraph
(K);
| ||||||
29 | (L) For taxable years ending after December 31, | ||||||
30 | 1983, an amount equal to
all social security benefits | ||||||
31 | and railroad retirement benefits included in
such | ||||||
32 | total pursuant to Sections 72(r) and 86 of the Internal | ||||||
33 | Revenue Code;
| ||||||
34 | (M) With the exception of any amounts subtracted | ||||||
35 | under subparagraph
(N), an amount equal to the sum of | ||||||
36 | all amounts disallowed as
deductions by (i) Sections |
| |||||||
| |||||||
1 | 171(a) (2), and 265(2) of the Internal Revenue Code
of | ||||||
2 | 1954, as now or hereafter amended, and all amounts of | ||||||
3 | expenses allocable
to interest and disallowed as | ||||||
4 | deductions by Section 265(1) of the Internal
Revenue | ||||||
5 | Code of 1954, as now or hereafter amended;
and (ii) for | ||||||
6 | taxable years
ending on or after August 13, 1999, | ||||||
7 | Sections 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of | ||||||
8 | the Internal Revenue Code; the provisions of this
| ||||||
9 | subparagraph are exempt from the provisions of Section | ||||||
10 | 250;
| ||||||
11 | (N) An amount equal to all amounts included in such | ||||||
12 | total which are
exempt from taxation by this State | ||||||
13 | either by reason of its statutes or
Constitution
or by | ||||||
14 | reason of the Constitution, treaties or statutes of the | ||||||
15 | United States;
provided that, in the case of any | ||||||
16 | statute of this State that exempts income
derived from | ||||||
17 | bonds or other obligations from the tax imposed under | ||||||
18 | this Act,
the amount exempted shall be the interest net | ||||||
19 | of bond premium amortization;
| ||||||
20 | (O) An amount equal to any contribution made to a | ||||||
21 | job training
project established pursuant to the Tax | ||||||
22 | Increment Allocation Redevelopment Act;
| ||||||
23 | (P) An amount equal to the amount of the deduction | ||||||
24 | used to compute the
federal income tax credit for | ||||||
25 | restoration of substantial amounts held under
claim of | ||||||
26 | right for the taxable year pursuant to Section 1341 of | ||||||
27 | the
Internal Revenue Code of 1986;
| ||||||
28 | (Q) An amount equal to any amounts included in such | ||||||
29 | total, received by
the taxpayer as an acceleration in | ||||||
30 | the payment of life, endowment or annuity
benefits in | ||||||
31 | advance of the time they would otherwise be payable as | ||||||
32 | an indemnity
for a terminal illness;
| ||||||
33 | (R) An amount equal to the amount of any federal or | ||||||
34 | State bonus paid
to veterans of the Persian Gulf War;
| ||||||
35 | (S) An amount, to the extent included in adjusted | ||||||
36 | gross income, equal
to the amount of a contribution |
| |||||||
| |||||||
1 | made in the taxable year on behalf of the
taxpayer to a | ||||||
2 | medical care savings account established under the | ||||||
3 | Medical Care
Savings Account Act or the Medical Care | ||||||
4 | Savings Account Act of 2000 to the
extent the | ||||||
5 | contribution is accepted by the account
administrator | ||||||
6 | as provided in that Act;
| ||||||
7 | (T) An amount, to the extent included in adjusted | ||||||
8 | gross income, equal to
the amount of interest earned in | ||||||
9 | the taxable year on a medical care savings
account | ||||||
10 | established under the Medical Care Savings Account Act | ||||||
11 | or the Medical
Care Savings Account Act of 2000 on | ||||||
12 | behalf of the
taxpayer, other than interest added | ||||||
13 | pursuant to item (D-5) of this paragraph
(2);
| ||||||
14 | (U) For one taxable year beginning on or after | ||||||
15 | January 1,
1994, an
amount equal to the total amount of | ||||||
16 | tax imposed and paid under subsections (a)
and (b) of | ||||||
17 | Section 201 of this Act on grant amounts received by | ||||||
18 | the taxpayer
under the Nursing Home Grant Assistance | ||||||
19 | Act during the taxpayer's taxable years
1992 and 1993;
| ||||||
20 | (V) Beginning with tax years ending on or after | ||||||
21 | December 31, 1995 and
ending with tax years ending on | ||||||
22 | or before December 31, 2004, an amount equal to
the | ||||||
23 | amount paid by a taxpayer who is a
self-employed | ||||||
24 | taxpayer, a partner of a partnership, or a
shareholder | ||||||
25 | in a Subchapter S corporation for health insurance or | ||||||
26 | long-term
care insurance for that taxpayer or that | ||||||
27 | taxpayer's spouse or dependents, to
the extent that the | ||||||
28 | amount paid for that health insurance or long-term care
| ||||||
29 | insurance may be deducted under Section 213 of the | ||||||
30 | Internal Revenue Code of
1986, has not been deducted on | ||||||
31 | the federal income tax return of the taxpayer,
and does | ||||||
32 | not exceed the taxable income attributable to that | ||||||
33 | taxpayer's income,
self-employment income, or | ||||||
34 | Subchapter S corporation income; except that no
| ||||||
35 | deduction shall be allowed under this item (V) if the | ||||||
36 | taxpayer is eligible to
participate in any health |
| |||||||
| |||||||
1 | insurance or long-term care insurance plan of an
| ||||||
2 | employer of the taxpayer or the taxpayer's
spouse. The | ||||||
3 | amount of the health insurance and long-term care | ||||||
4 | insurance
subtracted under this item (V) shall be | ||||||
5 | determined by multiplying total
health insurance and | ||||||
6 | long-term care insurance premiums paid by the taxpayer
| ||||||
7 | times a number that represents the fractional | ||||||
8 | percentage of eligible medical
expenses under Section | ||||||
9 | 213 of the Internal Revenue Code of 1986 not actually
| ||||||
10 | deducted on the taxpayer's federal income tax return;
| ||||||
11 | (W) For taxable years beginning on or after January | ||||||
12 | 1, 1998,
all amounts included in the taxpayer's federal | ||||||
13 | gross income
in the taxable year from amounts converted | ||||||
14 | from a regular IRA to a Roth IRA.
This paragraph is | ||||||
15 | exempt from the provisions of Section
250;
| ||||||
16 | (X) For taxable year 1999 and thereafter, an amount | ||||||
17 | equal to the
amount of any (i) distributions, to the | ||||||
18 | extent includible in gross income for
federal income | ||||||
19 | tax purposes, made to the taxpayer because of his or | ||||||
20 | her status
as a victim of persecution for racial or | ||||||
21 | religious reasons by Nazi Germany or
any other Axis | ||||||
22 | regime or as an heir of the victim and (ii) items
of | ||||||
23 | income, to the extent
includible in gross income for | ||||||
24 | federal income tax purposes, attributable to,
derived | ||||||
25 | from or in any way related to assets stolen from, | ||||||
26 | hidden from, or
otherwise lost to a victim of
| ||||||
27 | persecution for racial or religious reasons by Nazi | ||||||
28 | Germany or any other Axis
regime immediately prior to, | ||||||
29 | during, and immediately after World War II,
including, | ||||||
30 | but
not limited to, interest on the proceeds receivable | ||||||
31 | as insurance
under policies issued to a victim of | ||||||
32 | persecution for racial or religious
reasons
by Nazi | ||||||
33 | Germany or any other Axis regime by European insurance | ||||||
34 | companies
immediately prior to and during World War II;
| ||||||
35 | provided, however, this subtraction from federal | ||||||
36 | adjusted gross income does not
apply to assets acquired |
| |||||||
| |||||||
1 | with such assets or with the proceeds from the sale of
| ||||||
2 | such assets; provided, further, this paragraph shall | ||||||
3 | only apply to a taxpayer
who was the first recipient of | ||||||
4 | such assets after their recovery and who is a
victim of | ||||||
5 | persecution for racial or religious reasons
by Nazi | ||||||
6 | Germany or any other Axis regime or as an heir of the | ||||||
7 | victim. The
amount of and the eligibility for any | ||||||
8 | public assistance, benefit, or
similar entitlement is | ||||||
9 | not affected by the inclusion of items (i) and (ii) of
| ||||||
10 | this paragraph in gross income for federal income tax | ||||||
11 | purposes.
This paragraph is exempt from the provisions | ||||||
12 | of Section 250;
| ||||||
13 | (Y) For taxable years beginning on or after January | ||||||
14 | 1, 2002 and ending on or before December 31, 2003 ,
| ||||||
15 | moneys contributed in the taxable year to a College | ||||||
16 | Savings Pool account under
Section 16.5 of the State | ||||||
17 | Treasurer Act, except that amounts excluded from
gross | ||||||
18 | income under Section 529(c)(3) (C) (i) of the Internal | ||||||
19 | Revenue Code
shall not be considered moneys | ||||||
20 | contributed under this subparagraph (Y). For
taxable | ||||||
21 | years ending after December 31, 2003, moneys | ||||||
22 | contributed to a College
Savings Pool account under | ||||||
23 | Section 16.5 of the State Treasurer Act, to the
| ||||||
24 | Illinois Prepaid Tuition Trust Fund under the Illinois | ||||||
25 | Prepaid Tuition Act, or
to any other qualified tuition | ||||||
26 | program under Section 529 of the Internal
Revenue Code, | ||||||
27 | except that amounts rolled over into a program under | ||||||
28 | Section
529(c)(3)(C)(i) of the Internal Revenue Code | ||||||
29 | shall not be considered moneys
contributed under this | ||||||
30 | subparagraph (Y). This
subparagraph (Y) is exempt from | ||||||
31 | the provisions of Section 250;
| ||||||
32 | (Z) For taxable years 2001 and thereafter, for the | ||||||
33 | taxable year in
which the bonus depreciation deduction | ||||||
34 | (30% of the adjusted basis of the
qualified property) | ||||||
35 | is taken on the taxpayer's federal income tax return | ||||||
36 | under
subsection (k) of Section 168 of the Internal |
| |||||||
| |||||||
1 | Revenue Code and for each
applicable taxable year | ||||||
2 | thereafter, an amount equal to "x", where:
| ||||||
3 | (1) "y" equals the amount of the depreciation | ||||||
4 | deduction taken for the
taxable year
on the | ||||||
5 | taxpayer's federal income tax return on property | ||||||
6 | for which the bonus
depreciation deduction (30% of | ||||||
7 | the adjusted basis of the qualified property)
was | ||||||
8 | taken in any year under subsection (k) of Section | ||||||
9 | 168 of the Internal
Revenue Code, but not including | ||||||
10 | the bonus depreciation deduction; and
| ||||||
11 | (2) "x" equals "y" multiplied by 30 and then | ||||||
12 | divided by 70 (or "y"
multiplied by 0.429).
| ||||||
13 | The aggregate amount deducted under this | ||||||
14 | subparagraph in all taxable
years for any one piece of | ||||||
15 | property may not exceed the amount of the bonus
| ||||||
16 | depreciation deduction (30% of the adjusted basis of | ||||||
17 | the qualified property)
taken on that property on the | ||||||
18 | taxpayer's federal income tax return under
subsection | ||||||
19 | (k) of Section 168 of the Internal Revenue Code; and
| ||||||
20 | (AA) If the taxpayer reports a capital gain or loss | ||||||
21 | on the taxpayer's
federal income tax return for the | ||||||
22 | taxable year based on a sale or transfer of
property | ||||||
23 | for which the taxpayer was required in any taxable year | ||||||
24 | to make an
addition modification under subparagraph | ||||||
25 | (D-15), then an amount equal to that
addition | ||||||
26 | modification.
| ||||||
27 | The taxpayer is allowed to take the deduction under | ||||||
28 | this subparagraph
only once with respect to any one | ||||||
29 | piece of property; and
| ||||||
30 | (BB)
(Z) Any amount included in adjusted gross | ||||||
31 | income, other
than
salary,
received by a driver in a | ||||||
32 | ridesharing arrangement using a motor vehicle.
| ||||||
33 | (b) Corporations.
| ||||||
34 | (1) In general. In the case of a corporation, base | ||||||
35 | income means an
amount equal to the taxpayer's taxable |
| |||||||
| |||||||
1 | income for the taxable year as
modified by paragraph (2).
| ||||||
2 | (2) Modifications. The taxable income referred to in | ||||||
3 | paragraph (1)
shall be modified by adding thereto the sum | ||||||
4 | of the following amounts:
| ||||||
5 | (A) An amount equal to all amounts paid or accrued | ||||||
6 | to the taxpayer
as interest and all distributions | ||||||
7 | received from regulated investment
companies during | ||||||
8 | the taxable year to the extent excluded from gross
| ||||||
9 | income in the computation of taxable income;
| ||||||
10 | (B) An amount equal to the amount of tax imposed by | ||||||
11 | this Act to the
extent deducted from gross income in | ||||||
12 | the computation of taxable income
for the taxable year;
| ||||||
13 | (C) In the case of a regulated investment company, | ||||||
14 | an amount equal to
the excess of (i) the net long-term | ||||||
15 | capital gain for the taxable year, over
(ii) the amount | ||||||
16 | of the capital gain dividends designated as such in | ||||||
17 | accordance
with Section 852(b)(3)(C) of the Internal | ||||||
18 | Revenue Code and any amount
designated under Section | ||||||
19 | 852(b)(3)(D) of the Internal Revenue Code,
| ||||||
20 | attributable to the taxable year (this amendatory Act | ||||||
21 | of 1995
(Public Act 89-89) is declarative of existing | ||||||
22 | law and is not a new
enactment);
| ||||||
23 | (D) The amount of any net operating loss deduction | ||||||
24 | taken in arriving
at taxable income, other than a net | ||||||
25 | operating loss carried forward from a
taxable year | ||||||
26 | ending prior to December 31, 1986;
| ||||||
27 | (E) For taxable years in which a net operating loss | ||||||
28 | carryback or
carryforward from a taxable year ending | ||||||
29 | prior to December 31, 1986 is an
element of taxable | ||||||
30 | income under paragraph (1) of subsection (e) or
| ||||||
31 | subparagraph (E) of paragraph (2) of subsection (e), | ||||||
32 | the amount by which
addition modifications other than | ||||||
33 | those provided by this subparagraph (E)
exceeded | ||||||
34 | subtraction modifications in such earlier taxable | ||||||
35 | year, with the
following limitations applied in the | ||||||
36 | order that they are listed:
|
| |||||||
| |||||||
1 | (i) the addition modification relating to the | ||||||
2 | net operating loss
carried back or forward to the | ||||||
3 | taxable year from any taxable year ending
prior to | ||||||
4 | December 31, 1986 shall be reduced by the amount of | ||||||
5 | addition
modification under this subparagraph (E) | ||||||
6 | which related to that net operating
loss and which | ||||||
7 | was taken into account in calculating the base | ||||||
8 | income of an
earlier taxable year, and
| ||||||
9 | (ii) the addition modification relating to the | ||||||
10 | net operating loss
carried back or forward to the | ||||||
11 | taxable year from any taxable year ending
prior to | ||||||
12 | December 31, 1986 shall not exceed the amount of | ||||||
13 | such carryback or
carryforward;
| ||||||
14 | For taxable years in which there is a net operating | ||||||
15 | loss carryback or
carryforward from more than one other | ||||||
16 | taxable year ending prior to December
31, 1986, the | ||||||
17 | addition modification provided in this subparagraph | ||||||
18 | (E) shall
be the sum of the amounts computed | ||||||
19 | independently under the preceding
provisions of this | ||||||
20 | subparagraph (E) for each such taxable year;
| ||||||
21 | (E-5) For taxable years ending after December 31, | ||||||
22 | 1997, an
amount equal to any eligible remediation costs | ||||||
23 | that the corporation
deducted in computing adjusted | ||||||
24 | gross income and for which the
corporation claims a | ||||||
25 | credit under subsection (l) of Section 201;
| ||||||
26 | (E-10) For taxable years 2001 and thereafter, an | ||||||
27 | amount equal to the
bonus depreciation deduction (30% | ||||||
28 | of the adjusted basis of the qualified
property) taken | ||||||
29 | on the taxpayer's federal income tax return for the | ||||||
30 | taxable
year under subsection (k) of Section 168 of the | ||||||
31 | Internal Revenue Code; and
| ||||||
32 | (E-11) If the taxpayer reports a capital gain or | ||||||
33 | loss on the
taxpayer's federal income tax return for | ||||||
34 | the taxable year based on a sale or
transfer of | ||||||
35 | property for which the taxpayer was required in any | ||||||
36 | taxable year to
make an addition modification under |
| |||||||
| |||||||
1 | subparagraph (E-10), then an amount equal
to the | ||||||
2 | aggregate amount of the deductions taken in all taxable
| ||||||
3 | years under subparagraph (T) with respect to that | ||||||
4 | property . ;
| ||||||
5 | The taxpayer is required to make the addition | ||||||
6 | modification under this
subparagraph
only once with | ||||||
7 | respect to any one piece of property;
| ||||||
8 | and by deducting from the total so obtained the sum of the | ||||||
9 | following
amounts:
| ||||||
10 | (F) An amount equal to the amount of any tax | ||||||
11 | imposed by this Act
which was refunded to the taxpayer | ||||||
12 | and included in such total for the
taxable year;
| ||||||
13 | (G) An amount equal to any amount included in such | ||||||
14 | total under
Section 78 of the Internal Revenue Code;
| ||||||
15 | (H) In the case of a regulated investment company, | ||||||
16 | an amount equal
to the amount of exempt interest | ||||||
17 | dividends as defined in subsection (b)
(5) of Section | ||||||
18 | 852 of the Internal Revenue Code, paid to shareholders
| ||||||
19 | for the taxable year;
| ||||||
20 | (I) With the exception of any amounts subtracted | ||||||
21 | under subparagraph
(J),
an amount equal to the sum of | ||||||
22 | all amounts disallowed as
deductions by (i) Sections | ||||||
23 | 171(a) (2), and 265(a)(2) and amounts disallowed as
| ||||||
24 | interest expense by Section 291(a)(3) of the Internal | ||||||
25 | Revenue Code, as now
or hereafter amended, and all | ||||||
26 | amounts of expenses allocable to interest and
| ||||||
27 | disallowed as deductions by Section 265(a)(1) of the | ||||||
28 | Internal Revenue Code,
as now or hereafter amended;
and | ||||||
29 | (ii) for taxable years
ending on or after August 13, | ||||||
30 | 1999, Sections
171(a)(2), 265,
280C, 291(a)(3), and | ||||||
31 | 832(b)(5)(B)(i) of the Internal Revenue Code; the
| ||||||
32 | provisions of this
subparagraph are exempt from the | ||||||
33 | provisions of Section 250;
| ||||||
34 | (J) An amount equal to all amounts included in such | ||||||
35 | total which are
exempt from taxation by this State | ||||||
36 | either by reason of its statutes or
Constitution
or by |
| |||||||
| |||||||
1 | reason of the Constitution, treaties or statutes of the | ||||||
2 | United States;
provided that, in the case of any | ||||||
3 | statute of this State that exempts income
derived from | ||||||
4 | bonds or other obligations from the tax imposed under | ||||||
5 | this Act,
the amount exempted shall be the interest net | ||||||
6 | of bond premium amortization;
| ||||||
7 | (K) An amount equal to those dividends included in | ||||||
8 | such total
which were paid by a corporation which | ||||||
9 | conducts
business operations in an Enterprise Zone or | ||||||
10 | zones created under
the Illinois Enterprise Zone Act | ||||||
11 | and conducts substantially all of its
operations in an | ||||||
12 | Enterprise Zone or zones;
| ||||||
13 | (L) An amount equal to those dividends included in | ||||||
14 | such total that
were paid by a corporation that | ||||||
15 | conducts business operations in a federally
designated | ||||||
16 | Foreign Trade Zone or Sub-Zone and that is designated a | ||||||
17 | High Impact
Business located in Illinois; provided | ||||||
18 | that dividends eligible for the
deduction provided in | ||||||
19 | subparagraph (K) of paragraph 2 of this subsection
| ||||||
20 | shall not be eligible for the deduction provided under | ||||||
21 | this 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 interest
| ||||||
25 | income from a loan or loans made by such taxpayer to a | ||||||
26 | borrower, to the extent
that such a loan is secured by | ||||||
27 | property which is eligible for the Enterprise
Zone | ||||||
28 | Investment Credit. To determine the portion of a loan | ||||||
29 | or loans that is
secured by property eligible for a | ||||||
30 | Section 201(f) investment
credit to the borrower, the | ||||||
31 | entire principal amount of the loan or loans
between | ||||||
32 | the taxpayer and the borrower should be divided into | ||||||
33 | the basis of the
Section 201(f) investment credit | ||||||
34 | property which secures the
loan or loans, using for | ||||||
35 | this purpose the original basis of such property on
the | ||||||
36 | date that it was placed in service in the
Enterprise |
| |||||||
| |||||||
1 | Zone. The subtraction modification available to | ||||||
2 | taxpayer in any
year under this subsection shall be | ||||||
3 | that portion of the total interest paid
by the borrower | ||||||
4 | with respect to such loan attributable to the eligible
| ||||||
5 | property as calculated under the previous sentence;
| ||||||
6 | (M-1) For any taxpayer that is a financial | ||||||
7 | organization within the
meaning of Section 304(c) of | ||||||
8 | this Act, an amount included in such total as
interest | ||||||
9 | income from a loan or loans made by such taxpayer to a | ||||||
10 | borrower,
to the extent that such a loan is secured by | ||||||
11 | property which is eligible for
the High Impact Business | ||||||
12 | Investment Credit. To determine the portion of a
loan | ||||||
13 | or loans that is secured by property eligible for a | ||||||
14 | Section 201(h) investment credit to the borrower, the | ||||||
15 | entire principal amount of
the loan or loans between | ||||||
16 | the taxpayer and the borrower should be divided into
| ||||||
17 | the basis of the Section 201(h) investment credit | ||||||
18 | property which
secures the loan or loans, using for | ||||||
19 | this purpose the original basis of such
property on the | ||||||
20 | date that it was placed in service in a federally | ||||||
21 | designated
Foreign Trade Zone or Sub-Zone located in | ||||||
22 | Illinois. No taxpayer that is
eligible for the | ||||||
23 | deduction provided in subparagraph (M) of paragraph | ||||||
24 | (2) of
this subsection shall be eligible for the | ||||||
25 | deduction provided under this
subparagraph (M-1). The | ||||||
26 | subtraction modification available to taxpayers in
any | ||||||
27 | year under this subsection shall be that portion of the | ||||||
28 | total interest
paid by the borrower with respect to | ||||||
29 | such loan attributable to the eligible
property as | ||||||
30 | calculated under the previous sentence;
| ||||||
31 | (N) Two times any contribution made during the | ||||||
32 | taxable year to a
designated zone organization to the | ||||||
33 | extent that the contribution (i)
qualifies as a | ||||||
34 | charitable contribution under subsection (c) of | ||||||
35 | Section 170
of the Internal Revenue Code and (ii) must, | ||||||
36 | by its terms, be used for a
project approved by the |
| |||||||
| |||||||
1 | Department of Commerce and Economic Opportunity
| ||||||
2 | Community Affairs under Section 11 of the Illinois | ||||||
3 | Enterprise Zone Act;
| ||||||
4 | (O) An amount equal to: (i) 85% for taxable years | ||||||
5 | ending on or before
December 31, 1992, or, a percentage | ||||||
6 | equal to the percentage allowable under
Section | ||||||
7 | 243(a)(1) of the Internal Revenue Code of 1986 for | ||||||
8 | taxable years ending
after December 31, 1992, of the | ||||||
9 | amount by which dividends included in taxable
income | ||||||
10 | and received from a corporation that is not created or | ||||||
11 | organized under
the laws of the United States or any | ||||||
12 | state or political subdivision thereof,
including, for | ||||||
13 | taxable years ending on or after December 31, 1988, | ||||||
14 | dividends
received or deemed received or paid or deemed | ||||||
15 | paid under Sections 951 through
964 of the Internal | ||||||
16 | Revenue Code, exceed the amount of the modification
| ||||||
17 | provided under subparagraph (G) of paragraph (2) of | ||||||
18 | this subsection (b) which
is related to such dividends; | ||||||
19 | plus (ii) 100% of the amount by which dividends,
| ||||||
20 | included in taxable income and received, including, | ||||||
21 | for taxable years ending on
or after December 31, 1988, | ||||||
22 | dividends received or deemed received or paid or
deemed | ||||||
23 | paid under Sections 951 through 964 of the Internal | ||||||
24 | Revenue Code, from
any such corporation specified in | ||||||
25 | clause (i) that would but for the provisions
of Section | ||||||
26 | 1504 (b) (3) of the Internal Revenue Code be treated as | ||||||
27 | a member of
the affiliated group which includes the | ||||||
28 | dividend recipient, exceed the amount
of the | ||||||
29 | modification provided under subparagraph (G) of | ||||||
30 | paragraph (2) of this
subsection (b) which is related | ||||||
31 | to such dividends;
| ||||||
32 | (P) An amount equal to any contribution made to a | ||||||
33 | job training project
established pursuant to the Tax | ||||||
34 | Increment Allocation Redevelopment Act;
| ||||||
35 | (Q) An amount equal to the amount of the deduction | ||||||
36 | used to compute the
federal income tax credit for |
| |||||||
| |||||||
1 | restoration of substantial amounts held under
claim of | ||||||
2 | right for the taxable year pursuant to Section 1341 of | ||||||
3 | the
Internal Revenue Code of 1986;
| ||||||
4 | (R) In the case of an attorney-in-fact with respect | ||||||
5 | to whom an
interinsurer or a reciprocal insurer has | ||||||
6 | made the election under Section 835 of
the Internal | ||||||
7 | Revenue Code, 26 U.S.C. 835, an amount equal to the | ||||||
8 | excess, if
any, of the amounts paid or incurred by that | ||||||
9 | interinsurer or reciprocal insurer
in the taxable year | ||||||
10 | to the attorney-in-fact over the deduction allowed to | ||||||
11 | that
interinsurer or reciprocal insurer with respect | ||||||
12 | to the attorney-in-fact under
Section 835(b) of the | ||||||
13 | Internal Revenue Code for the taxable year;
| ||||||
14 | (S) For taxable years ending on or after December | ||||||
15 | 31, 1997, in the
case of a Subchapter
S corporation, an | ||||||
16 | amount equal to all amounts of income allocable to a
| ||||||
17 | shareholder subject to the Personal Property Tax | ||||||
18 | Replacement Income Tax imposed
by subsections (c) and | ||||||
19 | (d) of Section 201 of this Act, including amounts
| ||||||
20 | allocable to organizations exempt from federal income | ||||||
21 | tax by reason of Section
501(a) of the Internal Revenue | ||||||
22 | Code. This subparagraph (S) is exempt from
the | ||||||
23 | provisions of Section 250;
| ||||||
24 | (T) For taxable years 2001 and thereafter, for the | ||||||
25 | taxable year in
which the bonus depreciation deduction | ||||||
26 | (30% of the adjusted basis of the
qualified property) | ||||||
27 | is taken on the taxpayer's federal income tax return | ||||||
28 | under
subsection (k) of Section 168 of the Internal | ||||||
29 | Revenue Code and for each
applicable taxable year | ||||||
30 | thereafter, an amount equal to "x", where:
| ||||||
31 | (1) "y" equals the amount of the depreciation | ||||||
32 | deduction taken for the
taxable year
on the | ||||||
33 | taxpayer's federal income tax return on property | ||||||
34 | for which the bonus
depreciation deduction (30% of | ||||||
35 | the adjusted basis of the qualified property)
was | ||||||
36 | taken in any year under subsection (k) of Section |
| |||||||
| |||||||
1 | 168 of the Internal
Revenue Code, but not including | ||||||
2 | the bonus depreciation deduction; and
| ||||||
3 | (2) "x" equals "y" multiplied by 30 and then | ||||||
4 | divided by 70 (or "y"
multiplied by 0.429).
| ||||||
5 | The aggregate amount deducted under this | ||||||
6 | subparagraph in all taxable
years for any one piece of | ||||||
7 | property may not exceed the amount of the bonus
| ||||||
8 | depreciation deduction (30% of the adjusted basis of | ||||||
9 | the qualified property)
taken on that property on the | ||||||
10 | taxpayer's federal income tax return under
subsection | ||||||
11 | (k) of Section 168 of the Internal Revenue Code; and
| ||||||
12 | (U) If the taxpayer reports a capital gain or loss | ||||||
13 | on the taxpayer's
federal income tax return for the | ||||||
14 | taxable year based on a sale or transfer of
property | ||||||
15 | for which the taxpayer was required in any taxable year | ||||||
16 | to make an
addition modification under subparagraph | ||||||
17 | (E-10), then an amount equal to that
addition | ||||||
18 | modification.
| ||||||
19 | The taxpayer is allowed to take the deduction under | ||||||
20 | this subparagraph
only once with respect to any one | ||||||
21 | piece of property.
| ||||||
22 | (3) Special rule. For purposes of paragraph (2) (A), | ||||||
23 | "gross income"
in the case of a life insurance company, for | ||||||
24 | tax years ending on and after
December 31, 1994,
shall mean | ||||||
25 | the gross investment income for the taxable year.
| ||||||
26 | (c) Trusts and estates.
| ||||||
27 | (1) In general. In the case of a trust or estate, base | ||||||
28 | income means
an amount equal to the taxpayer's taxable | ||||||
29 | income for the taxable year as
modified by paragraph (2).
| ||||||
30 | (2) Modifications. Subject to the provisions of | ||||||
31 | paragraph (3), the
taxable income referred to in paragraph | ||||||
32 | (1) shall be modified by adding
thereto the sum of the | ||||||
33 | following amounts:
| ||||||
34 | (A) An amount equal to all amounts paid or accrued | ||||||
35 | to the taxpayer
as interest or dividends during the |
| |||||||
| |||||||
1 | taxable year to the extent excluded
from gross income | ||||||
2 | in the computation of taxable income;
| ||||||
3 | (B) In the case of (i) an estate, $600; (ii) a | ||||||
4 | trust which, under
its governing instrument, is | ||||||
5 | required to distribute all of its income
currently, | ||||||
6 | $300; and (iii) any other trust, $100, but in each such | ||||||
7 | case,
only to the extent such amount was deducted in | ||||||
8 | the computation of
taxable income;
| ||||||
9 | (C) An amount equal to the amount of tax imposed by | ||||||
10 | this Act to the
extent deducted from gross income in | ||||||
11 | the computation of taxable income
for the taxable year;
| ||||||
12 | (D) The amount of any net operating loss deduction | ||||||
13 | taken in arriving at
taxable income, other than a net | ||||||
14 | operating loss carried forward from a
taxable year | ||||||
15 | ending prior to December 31, 1986;
| ||||||
16 | (E) For taxable years in which a net operating loss | ||||||
17 | carryback or
carryforward from a taxable year ending | ||||||
18 | prior to December 31, 1986 is an
element of taxable | ||||||
19 | income under paragraph (1) of subsection (e) or | ||||||
20 | subparagraph
(E) of paragraph (2) of subsection (e), | ||||||
21 | the amount by which addition
modifications other than | ||||||
22 | those provided by this subparagraph (E) exceeded
| ||||||
23 | subtraction modifications in such taxable year, with | ||||||
24 | the following limitations
applied in the order that | ||||||
25 | they are listed:
| ||||||
26 | (i) the addition modification relating to the | ||||||
27 | net operating loss
carried back or forward to the | ||||||
28 | taxable year from any taxable year ending
prior to | ||||||
29 | December 31, 1986 shall be reduced by the amount of | ||||||
30 | addition
modification under this subparagraph (E) | ||||||
31 | which related to that net
operating loss and which | ||||||
32 | was taken into account in calculating the base
| ||||||
33 | income of an earlier taxable year, and
| ||||||
34 | (ii) the addition modification relating to the | ||||||
35 | net operating loss
carried back or forward to the | ||||||
36 | taxable year from any taxable year ending
prior to |
| |||||||
| |||||||
1 | December 31, 1986 shall not exceed the amount of | ||||||
2 | such carryback or
carryforward;
| ||||||
3 | For taxable years in which there is a net operating | ||||||
4 | loss carryback or
carryforward from more than one other | ||||||
5 | taxable year ending prior to December
31, 1986, the | ||||||
6 | addition modification provided in this subparagraph | ||||||
7 | (E) shall
be the sum of the amounts computed | ||||||
8 | independently under the preceding
provisions of this | ||||||
9 | subparagraph (E) for each such taxable year;
| ||||||
10 | (F) For taxable years ending on or after January 1, | ||||||
11 | 1989, an amount
equal to the tax deducted pursuant to | ||||||
12 | Section 164 of the Internal Revenue
Code if the trust | ||||||
13 | or estate is claiming the same tax for purposes of the
| ||||||
14 | Illinois foreign tax credit under Section 601 of this | ||||||
15 | Act;
| ||||||
16 | (G) An amount equal to the amount of the capital | ||||||
17 | gain deduction
allowable under the Internal Revenue | ||||||
18 | Code, to the extent deducted from
gross income in the | ||||||
19 | computation of taxable income;
| ||||||
20 | (G-5) For taxable years ending after December 31, | ||||||
21 | 1997, an
amount equal to any eligible remediation costs | ||||||
22 | that the trust or estate
deducted in computing adjusted | ||||||
23 | gross income and for which the trust
or estate claims a | ||||||
24 | credit under subsection (l) of Section 201;
| ||||||
25 | (G-10) For taxable years 2001 and thereafter, an | ||||||
26 | amount equal to the
bonus depreciation deduction (30% | ||||||
27 | of the adjusted basis of the qualified
property) taken | ||||||
28 | on the taxpayer's federal income tax return for the | ||||||
29 | taxable
year under subsection (k) of Section 168 of the | ||||||
30 | Internal Revenue Code; and
| ||||||
31 | (G-11) If the taxpayer reports a capital gain or | ||||||
32 | loss on the
taxpayer's federal income tax return for | ||||||
33 | the taxable year based on a sale or
transfer of | ||||||
34 | property for which the taxpayer was required in any | ||||||
35 | taxable year to
make an addition modification under | ||||||
36 | subparagraph (G-10), then an amount equal
to the |
| |||||||
| |||||||
1 | aggregate amount of the deductions taken in all taxable
| ||||||
2 | years under subparagraph (R) with respect to that | ||||||
3 | 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 sum of the | ||||||
8 | following
amounts:
| ||||||
9 | (H) An amount equal to all amounts included in such | ||||||
10 | total pursuant
to the provisions of Sections 402(a), | ||||||
11 | 402(c), 403(a), 403(b), 406(a), 407(a)
and 408 of the | ||||||
12 | Internal Revenue Code or included in such total as
| ||||||
13 | distributions under the provisions of any retirement | ||||||
14 | or disability plan for
employees of any governmental | ||||||
15 | agency or unit, or retirement payments to
retired | ||||||
16 | partners, which payments are excluded in computing net | ||||||
17 | earnings
from self employment by Section 1402 of the | ||||||
18 | Internal Revenue Code and
regulations adopted pursuant | ||||||
19 | thereto;
| ||||||
20 | (I) The valuation limitation amount;
| ||||||
21 | (J) An amount equal to the amount of any tax | ||||||
22 | imposed by this Act
which was refunded to the taxpayer | ||||||
23 | and included in such total for the
taxable year;
| ||||||
24 | (K) An amount equal to all amounts included in | ||||||
25 | taxable income as
modified by subparagraphs (A), (B), | ||||||
26 | (C), (D), (E), (F) and (G) which
are exempt from | ||||||
27 | taxation by this State either by reason of its statutes | ||||||
28 | or
Constitution
or by reason of the Constitution, | ||||||
29 | treaties or statutes of the United States;
provided | ||||||
30 | that, in the case of any statute of this State that | ||||||
31 | exempts income
derived from bonds or other obligations | ||||||
32 | from the tax imposed under this Act,
the amount | ||||||
33 | exempted shall be the interest net of bond premium | ||||||
34 | amortization;
| ||||||
35 | (L) With the exception of any amounts subtracted | ||||||
36 | under subparagraph
(K),
an amount equal to the sum of |
| |||||||
| |||||||
1 | all amounts disallowed as
deductions by (i) Sections | ||||||
2 | 171(a) (2) and 265(a)(2) of the Internal Revenue
Code, | ||||||
3 | as now or hereafter amended, and all amounts of | ||||||
4 | expenses allocable
to interest and disallowed as | ||||||
5 | deductions by Section 265(1) of the Internal
Revenue | ||||||
6 | Code of 1954, as now or hereafter amended;
and (ii) for | ||||||
7 | taxable years
ending on or after August 13, 1999, | ||||||
8 | Sections
171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of | ||||||
9 | the Internal Revenue Code; the provisions of this
| ||||||
10 | subparagraph are exempt from the provisions of Section | ||||||
11 | 250;
| ||||||
12 | (M) An amount equal to those dividends included in | ||||||
13 | such total
which were paid by a corporation which | ||||||
14 | conducts business operations in an
Enterprise Zone or | ||||||
15 | zones created under the Illinois Enterprise Zone Act | ||||||
16 | and
conducts substantially all of its operations in an | ||||||
17 | Enterprise Zone or Zones;
| ||||||
18 | (N) An amount equal to any contribution made to a | ||||||
19 | job training
project established pursuant to the Tax | ||||||
20 | Increment Allocation
Redevelopment Act;
| ||||||
21 | (O) An amount equal to those dividends included in | ||||||
22 | such total
that were paid by a corporation that | ||||||
23 | conducts business operations in a
federally designated | ||||||
24 | Foreign Trade Zone or Sub-Zone and that is designated
a | ||||||
25 | High Impact Business located in Illinois; provided | ||||||
26 | that dividends eligible
for the deduction provided in | ||||||
27 | subparagraph (M) of paragraph (2) of this
subsection | ||||||
28 | shall not be eligible for the deduction provided under | ||||||
29 | this
subparagraph (O);
| ||||||
30 | (P) An amount equal to the amount of the deduction | ||||||
31 | used to compute the
federal income tax credit for | ||||||
32 | restoration of substantial amounts held under
claim of | ||||||
33 | right for the taxable year pursuant to Section 1341 of | ||||||
34 | the
Internal Revenue Code of 1986;
| ||||||
35 | (Q) For taxable year 1999 and thereafter, an amount | ||||||
36 | equal to the
amount of any
(i) distributions, to the |
| |||||||
| |||||||
1 | extent includible in gross income for
federal income | ||||||
2 | tax purposes, made to the taxpayer because of
his or | ||||||
3 | her status as a victim of
persecution for racial or | ||||||
4 | religious reasons by Nazi Germany or any other Axis
| ||||||
5 | regime or as an heir of the victim and (ii) items
of | ||||||
6 | income, to the extent
includible in gross income for | ||||||
7 | federal income tax purposes, attributable to,
derived | ||||||
8 | from or in any way related to assets stolen from, | ||||||
9 | hidden from, or
otherwise lost to a victim of
| ||||||
10 | persecution for racial or religious reasons by Nazi
| ||||||
11 | Germany or any other Axis regime
immediately prior to, | ||||||
12 | during, and immediately after World War II, including,
| ||||||
13 | but
not limited to, interest on the proceeds receivable | ||||||
14 | as insurance
under policies issued to a victim of | ||||||
15 | persecution for racial or religious
reasons by Nazi | ||||||
16 | Germany or any other Axis regime by European insurance
| ||||||
17 | companies
immediately prior to and during World War II;
| ||||||
18 | provided, however, this subtraction from federal | ||||||
19 | adjusted gross income does not
apply to assets acquired | ||||||
20 | with such assets or with the proceeds from the sale of
| ||||||
21 | such assets; provided, further, this paragraph shall | ||||||
22 | only apply to a taxpayer
who was the first recipient of | ||||||
23 | such assets after their recovery and who is a
victim of
| ||||||
24 | persecution for racial or religious reasons
by Nazi | ||||||
25 | Germany or any other Axis regime or as an heir of the | ||||||
26 | victim. The
amount of and the eligibility for any | ||||||
27 | public assistance, benefit, or
similar entitlement is | ||||||
28 | not affected by the inclusion of items (i) and (ii) of
| ||||||
29 | this paragraph in gross income for federal income tax | ||||||
30 | purposes.
This paragraph is exempt from the provisions | ||||||
31 | of Section 250;
| ||||||
32 | (R) For taxable years 2001 and thereafter, for the | ||||||
33 | taxable year in
which the bonus depreciation deduction | ||||||
34 | (30% of the adjusted basis of the
qualified property) | ||||||
35 | is taken on the taxpayer's federal income tax return | ||||||
36 | under
subsection (k) of Section 168 of the Internal |
| |||||||
| |||||||
1 | Revenue Code and for each
applicable taxable year | ||||||
2 | thereafter, an amount equal to "x", where:
| ||||||
3 | (1) "y" equals the amount of the depreciation | ||||||
4 | deduction taken for the
taxable year
on the | ||||||
5 | taxpayer's federal income tax return on property | ||||||
6 | for which the bonus
depreciation deduction (30% of | ||||||
7 | the adjusted basis of the qualified property)
was | ||||||
8 | taken in any year under subsection (k) of Section | ||||||
9 | 168 of the Internal
Revenue Code, but not including | ||||||
10 | the bonus depreciation deduction; and
| ||||||
11 | (2) "x" equals "y" multiplied by 30 and then | ||||||
12 | divided by 70 (or "y"
multiplied by 0.429).
| ||||||
13 | The aggregate amount deducted under this | ||||||
14 | subparagraph in all taxable
years for any one piece of | ||||||
15 | property may not exceed the amount of the bonus
| ||||||
16 | depreciation deduction (30% of the adjusted basis of | ||||||
17 | the qualified property)
taken on that property on the | ||||||
18 | taxpayer's federal income tax return under
subsection | ||||||
19 | (k) of Section 168 of the Internal Revenue Code; and
| ||||||
20 | (S) If the taxpayer reports a capital gain or loss | ||||||
21 | on the taxpayer's
federal income tax return for the | ||||||
22 | taxable year based on a sale or transfer of
property | ||||||
23 | for which the taxpayer was required in any taxable year | ||||||
24 | to make an
addition modification under subparagraph | ||||||
25 | (G-10), then an amount equal to that
addition | ||||||
26 | modification.
| ||||||
27 | The taxpayer is allowed to take the deduction under | ||||||
28 | this subparagraph
only once with respect to any one | ||||||
29 | piece of property.
| ||||||
30 | (3) Limitation. The amount of any modification | ||||||
31 | otherwise required
under this subsection shall, under | ||||||
32 | regulations prescribed by the
Department, be adjusted by | ||||||
33 | any amounts included therein which were
properly paid, | ||||||
34 | credited, or required to be distributed, or permanently set
| ||||||
35 | aside for charitable purposes pursuant to Internal Revenue | ||||||
36 | Code Section
642(c) during the taxable year.
|
| |||||||
| |||||||
1 | (d) Partnerships.
| ||||||
2 | (1) In general. In the case of a partnership, base | ||||||
3 | income means an
amount equal to the taxpayer's taxable | ||||||
4 | income for the taxable year as
modified by paragraph (2).
| ||||||
5 | (2) Modifications. The taxable income referred to in | ||||||
6 | paragraph (1)
shall be modified by adding thereto the sum | ||||||
7 | of the following amounts:
| ||||||
8 | (A) An amount equal to all amounts paid or accrued | ||||||
9 | to the taxpayer as
interest or dividends during the | ||||||
10 | taxable year to the extent excluded from
gross income | ||||||
11 | in the computation of taxable income;
| ||||||
12 | (B) An amount equal to the amount of tax imposed by | ||||||
13 | this Act to the
extent deducted from gross income for | ||||||
14 | the taxable year;
| ||||||
15 | (C) The amount of deductions allowed to the | ||||||
16 | partnership pursuant to
Section 707 (c) of the Internal | ||||||
17 | Revenue Code in calculating its taxable income;
| ||||||
18 | (D) An amount equal to the amount of the capital | ||||||
19 | gain deduction
allowable under the Internal Revenue | ||||||
20 | Code, to the extent deducted from
gross income in the | ||||||
21 | computation of taxable income;
| ||||||
22 | (D-5) For taxable years 2001 and thereafter, an | ||||||
23 | amount equal to the
bonus depreciation deduction (30% | ||||||
24 | of the adjusted basis of the qualified
property) taken | ||||||
25 | on the taxpayer's federal income tax return for the | ||||||
26 | taxable
year under subsection (k) of Section 168 of the | ||||||
27 | Internal Revenue Code; and
| ||||||
28 | (D-6) 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 the
| ||||||
34 | aggregate amount of the deductions taken in all taxable | ||||||
35 | years
under subparagraph (O) with respect to that |
| |||||||
| |||||||
1 | property . ;
| ||||||
2 | The taxpayer is required to make the addition | ||||||
3 | modification under this
subparagraph
only once with | ||||||
4 | respect to any one piece of property;
| ||||||
5 | and by deducting from the total so obtained the following | ||||||
6 | amounts:
| ||||||
7 | (E) The valuation limitation amount;
| ||||||
8 | (F) An amount equal to the amount of any tax | ||||||
9 | imposed by this Act which
was refunded to the taxpayer | ||||||
10 | and included in such total for the taxable year;
| ||||||
11 | (G) An amount equal to all amounts included in | ||||||
12 | taxable income as
modified by subparagraphs (A), (B), | ||||||
13 | (C) and (D) which are exempt from
taxation by this | ||||||
14 | State either by reason of its statutes or Constitution | ||||||
15 | or
by reason of
the Constitution, treaties or statutes | ||||||
16 | of the United States;
provided that, in the case of any | ||||||
17 | statute of this State that exempts income
derived from | ||||||
18 | bonds or other obligations from the tax imposed under | ||||||
19 | this Act,
the amount exempted shall be the interest net | ||||||
20 | of bond premium amortization;
| ||||||
21 | (H) Any income of the partnership which | ||||||
22 | constitutes personal service
income as defined in | ||||||
23 | Section 1348 (b) (1) of the Internal Revenue Code (as
| ||||||
24 | in effect December 31, 1981) or a reasonable allowance | ||||||
25 | for compensation
paid or accrued for services rendered | ||||||
26 | by partners to the partnership,
whichever is greater;
| ||||||
27 | (I) An amount equal to all amounts of income | ||||||
28 | distributable to an entity
subject to the Personal | ||||||
29 | Property Tax Replacement Income Tax imposed by
| ||||||
30 | subsections (c) and (d) of Section 201 of this Act | ||||||
31 | including amounts
distributable to organizations | ||||||
32 | exempt from federal income tax by reason of
Section | ||||||
33 | 501(a) of the Internal Revenue Code;
| ||||||
34 | (J) With the exception of any amounts subtracted | ||||||
35 | under subparagraph
(G),
an amount equal to the sum of | ||||||
36 | all amounts disallowed as deductions
by (i) Sections |
| |||||||
| |||||||
1 | 171(a) (2), and 265(2) of the Internal Revenue Code of | ||||||
2 | 1954,
as now or hereafter amended, and all amounts of | ||||||
3 | expenses allocable to
interest and disallowed as | ||||||
4 | deductions by Section 265(1) of the Internal
Revenue | ||||||
5 | Code, as now or hereafter amended;
and (ii) for taxable | ||||||
6 | years
ending on or after August 13, 1999, Sections
| ||||||
7 | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the | ||||||
8 | Internal Revenue Code; the provisions of this
| ||||||
9 | subparagraph are exempt from the provisions of Section | ||||||
10 | 250;
| ||||||
11 | (K) An amount equal to those dividends included in | ||||||
12 | such total which were
paid by a corporation which | ||||||
13 | conducts business operations in an Enterprise
Zone or | ||||||
14 | zones created under the Illinois Enterprise Zone Act, | ||||||
15 | enacted by
the 82nd General Assembly, and
conducts | ||||||
16 | substantially all of its operations
in an Enterprise | ||||||
17 | Zone or Zones;
| ||||||
18 | (L) An amount equal to any contribution made to a | ||||||
19 | job training project
established pursuant to the Real | ||||||
20 | Property Tax Increment Allocation
Redevelopment Act;
| ||||||
21 | (M) An amount equal to those dividends included in | ||||||
22 | such total
that were paid by a corporation that | ||||||
23 | conducts business operations in a
federally designated | ||||||
24 | Foreign Trade Zone or Sub-Zone and that is designated a
| ||||||
25 | High Impact Business located in Illinois; provided | ||||||
26 | that dividends eligible
for the deduction provided in | ||||||
27 | subparagraph (K) of paragraph (2) of this
subsection | ||||||
28 | shall not be eligible for the deduction provided under | ||||||
29 | this
subparagraph (M);
| ||||||
30 | (N) An amount equal to the amount of the deduction | ||||||
31 | used to compute the
federal income tax credit for | ||||||
32 | restoration of substantial amounts held under
claim of | ||||||
33 | right for the taxable year pursuant to Section 1341 of | ||||||
34 | the
Internal Revenue Code of 1986;
| ||||||
35 | (O) For taxable years 2001 and thereafter, for the | ||||||
36 | taxable year in
which the bonus depreciation deduction |
| |||||||
| |||||||
1 | (30% of the adjusted basis of the
qualified property) | ||||||
2 | is taken on the taxpayer's federal income tax return | ||||||
3 | under
subsection (k) of Section 168 of the Internal | ||||||
4 | Revenue Code and for each
applicable taxable year | ||||||
5 | thereafter, an amount equal to "x", where:
| ||||||
6 | (1) "y" equals the amount of the depreciation | ||||||
7 | deduction taken for the
taxable year
on the | ||||||
8 | taxpayer's federal income tax return on property | ||||||
9 | for which the bonus
depreciation deduction (30% of | ||||||
10 | the adjusted basis of the qualified property)
was | ||||||
11 | taken in any year under subsection (k) of Section | ||||||
12 | 168 of the Internal
Revenue Code, but not including | ||||||
13 | the bonus depreciation deduction; and
| ||||||
14 | (2) "x" equals "y" multiplied by 30 and then | ||||||
15 | divided by 70 (or "y"
multiplied by 0.429).
| ||||||
16 | The aggregate amount deducted under this | ||||||
17 | subparagraph in all taxable
years for any one piece of | ||||||
18 | property may not exceed the amount of the bonus
| ||||||
19 | depreciation deduction (30% of the adjusted basis of | ||||||
20 | the qualified property)
taken on that property on the | ||||||
21 | taxpayer's federal income tax return under
subsection | ||||||
22 | (k) of Section 168 of the Internal Revenue Code; and
| ||||||
23 | (P) If the taxpayer reports a capital gain or loss | ||||||
24 | on the taxpayer's
federal income tax return for the | ||||||
25 | taxable year based on a sale or transfer of
property | ||||||
26 | for which the taxpayer was required in any taxable year | ||||||
27 | to make an
addition modification under subparagraph | ||||||
28 | (D-5), then an amount equal to that
addition | ||||||
29 | modification.
| ||||||
30 | The taxpayer is allowed to take the deduction under | ||||||
31 | this subparagraph
only once with respect to any one | ||||||
32 | piece of property.
| ||||||
33 | (e) Gross income; adjusted gross income; taxable income.
| ||||||
34 | (1) In general. Subject to the provisions of paragraph | ||||||
35 | (2) and
subsection (b) (3), for purposes of this Section |
| |||||||
| |||||||
1 | and Section 803(e), a
taxpayer's gross income, adjusted | ||||||
2 | gross income, or taxable income for
the taxable year shall | ||||||
3 | mean the amount of gross income, adjusted gross
income or | ||||||
4 | taxable income properly reportable for federal income tax
| ||||||
5 | purposes for the taxable year under the provisions of the | ||||||
6 | Internal
Revenue Code. Taxable income may be less than | ||||||
7 | zero. However, for taxable
years ending on or after | ||||||
8 | December 31, 1986, net operating loss
carryforwards from | ||||||
9 | taxable years ending prior to December 31, 1986, may not
| ||||||
10 | exceed the sum of federal taxable income for the taxable | ||||||
11 | year before net
operating loss deduction, plus the excess | ||||||
12 | of addition modifications over
subtraction modifications | ||||||
13 | for the taxable year. For taxable years ending
prior to | ||||||
14 | December 31, 1986, taxable income may never be an amount in | ||||||
15 | excess
of the net operating loss for the taxable year as | ||||||
16 | defined in subsections
(c) and (d) of Section 172 of the | ||||||
17 | Internal Revenue Code, provided that when
taxable income of | ||||||
18 | a corporation (other than a Subchapter S corporation),
| ||||||
19 | trust, or estate is less than zero and addition | ||||||
20 | modifications, other than
those provided by subparagraph | ||||||
21 | (E) of paragraph (2) of subsection (b) for
corporations or | ||||||
22 | subparagraph (E) of paragraph (2) of subsection (c) for
| ||||||
23 | trusts and estates, exceed subtraction modifications, an | ||||||
24 | addition
modification must be made under those | ||||||
25 | subparagraphs for any other taxable
year to which the | ||||||
26 | taxable income less than zero (net operating loss) is
| ||||||
27 | applied under Section 172 of the Internal Revenue Code or | ||||||
28 | under
subparagraph (E) of paragraph (2) of this subsection | ||||||
29 | (e) applied in
conjunction with Section 172 of the Internal | ||||||
30 | Revenue Code.
| ||||||
31 | (2) Special rule. For purposes of paragraph (1) of this | ||||||
32 | subsection,
the taxable income properly reportable for | ||||||
33 | federal income tax purposes
shall mean:
| ||||||
34 | (A) Certain life insurance companies. In the case | ||||||
35 | of a life
insurance company subject to the tax imposed | ||||||
36 | by Section 801 of the
Internal Revenue Code, life |
| |||||||
| |||||||
1 | insurance company taxable income, plus the
amount of | ||||||
2 | distribution from pre-1984 policyholder surplus | ||||||
3 | accounts as
calculated under Section 815a of the | ||||||
4 | Internal Revenue Code;
| ||||||
5 | (B) Certain other insurance companies. In the case | ||||||
6 | of mutual
insurance companies subject to the tax | ||||||
7 | imposed by Section 831 of the
Internal Revenue Code, | ||||||
8 | insurance company taxable income;
| ||||||
9 | (C) Regulated investment companies. In the case of | ||||||
10 | a regulated
investment company subject to the tax | ||||||
11 | imposed by Section 852 of the
Internal Revenue Code, | ||||||
12 | investment company taxable income;
| ||||||
13 | (D) Real estate investment trusts. In the case of a | ||||||
14 | real estate
investment trust subject to the tax imposed | ||||||
15 | by Section 857 of the
Internal Revenue Code, real | ||||||
16 | estate investment trust taxable income;
| ||||||
17 | (E) Consolidated corporations. In the case of a | ||||||
18 | corporation which
is a member of an affiliated group of | ||||||
19 | corporations filing a consolidated
income tax return | ||||||
20 | for the taxable year for federal income tax purposes,
| ||||||
21 | taxable income determined as if such corporation had | ||||||
22 | filed a separate
return for federal income tax purposes | ||||||
23 | for the taxable year and each
preceding taxable year | ||||||
24 | for which it was a member of an affiliated group.
For | ||||||
25 | purposes of this subparagraph, the taxpayer's separate | ||||||
26 | taxable
income shall be determined as if the election | ||||||
27 | provided by Section
243(b) (2) of the Internal Revenue | ||||||
28 | Code had been in effect for all such years;
| ||||||
29 | (F) Cooperatives. In the case of a cooperative | ||||||
30 | corporation or
association, the taxable income of such | ||||||
31 | organization determined in
accordance with the | ||||||
32 | provisions of Section 1381 through 1388 of the
Internal | ||||||
33 | Revenue Code;
| ||||||
34 | (G) Subchapter S corporations. In the case of: (i) | ||||||
35 | a Subchapter S
corporation for which there is in effect | ||||||
36 | an election for the taxable year
under Section 1362 of |
| |||||||
| |||||||
1 | the Internal Revenue Code, the taxable income of such
| ||||||
2 | corporation determined in accordance with Section | ||||||
3 | 1363(b) of the Internal
Revenue Code, except that | ||||||
4 | taxable income shall take into
account those items | ||||||
5 | which are required by Section 1363(b)(1) of the
| ||||||
6 | Internal Revenue Code to be separately stated; and (ii) | ||||||
7 | a Subchapter
S corporation for which there is in effect | ||||||
8 | a federal election to opt out of
the provisions of the | ||||||
9 | Subchapter S Revision Act of 1982 and have applied
| ||||||
10 | instead the prior federal Subchapter S rules as in | ||||||
11 | effect on July 1, 1982,
the taxable income of such | ||||||
12 | corporation determined in accordance with the
federal | ||||||
13 | Subchapter S rules as in effect on July 1, 1982; and
| ||||||
14 | (H) Partnerships. In the case of a partnership, | ||||||
15 | taxable income
determined in accordance with Section | ||||||
16 | 703 of the Internal Revenue Code,
except that taxable | ||||||
17 | income shall take into account those items which are
| ||||||
18 | required by Section 703(a)(1) to be separately stated | ||||||
19 | but which would be
taken into account by an individual | ||||||
20 | in calculating his taxable income.
| ||||||
21 | (f) Valuation limitation amount.
| ||||||
22 | (1) In general. The valuation limitation amount | ||||||
23 | referred to in
subsections (a) (2) (G), (c) (2) (I) and | ||||||
24 | (d)(2) (E) is an amount equal to:
| ||||||
25 | (A) The sum of the pre-August 1, 1969 appreciation | ||||||
26 | amounts (to the
extent consisting of gain reportable | ||||||
27 | under the provisions of Section
1245 or 1250 of the | ||||||
28 | Internal Revenue Code) for all property in respect
of | ||||||
29 | which such gain was reported for the taxable year; plus
| ||||||
30 | (B) The lesser of (i) the sum of the pre-August 1, | ||||||
31 | 1969 appreciation
amounts (to the extent consisting of | ||||||
32 | capital gain) for all property in
respect of which such | ||||||
33 | gain was reported for federal income tax purposes
for | ||||||
34 | the taxable year, or (ii) the net capital gain for the | ||||||
35 | taxable year,
reduced in either case by any amount of |
| |||||||
| |||||||
1 | such gain included in the amount
determined under | ||||||
2 | subsection (a) (2) (F) or (c) (2) (H).
| ||||||
3 | (2) Pre-August 1, 1969 appreciation amount.
| ||||||
4 | (A) If the fair market value of property referred | ||||||
5 | to in paragraph
(1) was readily ascertainable on August | ||||||
6 | 1, 1969, the pre-August 1, 1969
appreciation amount for | ||||||
7 | such property is the lesser of (i) the excess of
such | ||||||
8 | fair market value over the taxpayer's basis (for | ||||||
9 | determining gain)
for such property on that date | ||||||
10 | (determined under the Internal Revenue
Code as in | ||||||
11 | effect on that date), or (ii) the total gain realized | ||||||
12 | and
reportable for federal income tax purposes in | ||||||
13 | respect of the sale,
exchange or other disposition of | ||||||
14 | such property.
| ||||||
15 | (B) If the fair market value of property referred | ||||||
16 | to in paragraph
(1) was not readily ascertainable on | ||||||
17 | August 1, 1969, the pre-August 1,
1969 appreciation | ||||||
18 | amount for such property is that amount which bears
the | ||||||
19 | same ratio to the total gain reported in respect of the | ||||||
20 | property for
federal income tax purposes for the | ||||||
21 | taxable year, as the number of full
calendar months in | ||||||
22 | that part of the taxpayer's holding period for the
| ||||||
23 | property ending July 31, 1969 bears to the number of | ||||||
24 | full calendar
months in the taxpayer's entire holding | ||||||
25 | period for the
property.
| ||||||
26 | (C) The Department shall prescribe such | ||||||
27 | regulations as may be
necessary to carry out the | ||||||
28 | purposes of this paragraph.
| ||||||
29 | (g) Double deductions. Unless specifically provided | ||||||
30 | otherwise, nothing
in this Section shall permit the same item | ||||||
31 | to be deducted more than once.
| ||||||
32 | (h) Legislative intention. Except as expressly provided by | ||||||
33 | this
Section there shall be no modifications or limitations on | ||||||
34 | the amounts
of income, gain, loss or deduction taken into |
| |||||||
| |||||||
1 | account in determining
gross income, adjusted gross income or | ||||||
2 | taxable income for federal income
tax purposes for the taxable | ||||||
3 | year, or in the amount of such items
entering into the | ||||||
4 | computation of base income and net income under this
Act for | ||||||
5 | such taxable year, whether in respect of property values as of
| ||||||
6 | August 1, 1969 or otherwise.
| ||||||
7 | (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99; | ||||||
8 | 91-357, eff.
7-29-99; 91-541, eff. 8-13-99; 91-676, eff. | ||||||
9 | 12-23-99; 91-845, eff. 6-22-00;
91-913, eff. 1-1-01; 92-16, | ||||||
10 | eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff.
8-17-01; | ||||||
11 | 92-603, eff. 6-28-02; 92-626, eff. 7-11-02; 92-651, eff. | ||||||
12 | 7-11-02;
92-846, eff. 8-23-02; revised 10-15-03.)
| ||||||
13 | Section 99. Effective date. This Act takes effect upon | ||||||
14 | becoming law. |