93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2893

 

Introduced 2/6/2004, by Antonio Munoz

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/203   from Ch. 120, par. 2-203

    Amends the Illinois Income Tax Act. Makes a techinical change in a provision concerning the definitions of "gross income", "adjusted gross income", and "taxable income" for consolidated corporations.


LRB093 17809 SJM 43490 b

 

 

A BILL FOR

 

SB2893 LRB093 17809 SJM 43490 b

1     AN ACT concerning taxes.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Income Tax Act is amended by
5 changing Section 203 as follows:
 
6     (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
7     Sec. 203. Base income defined.
8     (a) Individuals.
9         (1) In general. In the case of an individual, base
10     income means an amount equal to the taxpayer's adjusted
11     gross income for the taxable year as modified by paragraph
12     (2).
13         (2) Modifications. The adjusted gross income referred
14     to in paragraph (1) shall be modified by adding thereto the
15     sum of the following amounts:
16             (A) An amount equal to all amounts paid or accrued
17         to the taxpayer as interest or dividends during the
18         taxable year to the extent excluded from gross income
19         in the computation of adjusted gross income, except
20         stock dividends of qualified public utilities
21         described in Section 305(e) of the Internal Revenue
22         Code;
23             (B) An amount equal to the amount of tax imposed by
24         this Act to the extent deducted from gross income in
25         the computation of adjusted gross income for the
26         taxable year;
27             (C) An amount equal to the amount received during
28         the taxable year as a recovery or refund of real
29         property taxes paid with respect to the taxpayer's
30         principal residence under the Revenue Act of 1939 and
31         for which a deduction was previously taken under
32         subparagraph (L) of this paragraph (2) prior to July 1,

 

 

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1         1991, the retrospective application date of Article 4
2         of Public Act 87-17. In the case of multi-unit or
3         multi-use structures and farm dwellings, the taxes on
4         the taxpayer's principal residence shall be that
5         portion of the total taxes for the entire property
6         which is attributable to such principal residence;
7             (D) An amount equal to the amount of the capital
8         gain deduction allowable under the Internal Revenue
9         Code, to the extent deducted from gross income in the
10         computation of adjusted gross income;
11             (D-5) An amount, to the extent not included in
12         adjusted gross income, equal to the amount of money
13         withdrawn by the taxpayer in the taxable year from a
14         medical care savings account and the interest earned on
15         the account in the taxable year of a withdrawal
16         pursuant to subsection (b) of Section 20 of the Medical
17         Care Savings Account Act or subsection (b) of Section
18         20 of the Medical Care Savings Account Act of 2000;
19             (D-10) For taxable years ending after December 31,
20         1997, an amount equal to any eligible remediation costs
21         that the individual deducted in computing adjusted
22         gross income and for which the individual claims a
23         credit under subsection (l) of Section 201;
24             (D-15) For taxable years 2001 and thereafter, an
25         amount equal to the bonus depreciation deduction (30%
26         of the adjusted basis of the qualified property) taken
27         on the taxpayer's federal income tax return for the
28         taxable year under subsection (k) of Section 168 of the
29         Internal Revenue Code; and
30             (D-16) If the taxpayer reports a capital gain or
31         loss on the taxpayer's federal income tax return for
32         the taxable year based on a sale or transfer of
33         property for which the taxpayer was required in any
34         taxable year to make an addition modification under
35         subparagraph (D-15), then an amount equal to the
36         aggregate amount of the deductions taken in all taxable

 

 

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1         years under subparagraph (Z) with respect to that
2         property. ;
3             The taxpayer is required to make the addition
4         modification under this subparagraph only once with
5         respect to any one piece of property; . and
6             (D-20) (D-15) For taxable years beginning on or
7         after January 1, 2002, in the case of a distribution
8         from a qualified tuition program under Section 529 of
9         the Internal Revenue Code, other than (i) a
10         distribution from a College Savings Pool created under
11         Section 16.5 of the State Treasurer Act or (ii) a
12         distribution from the Illinois Prepaid Tuition Trust
13         Fund, an amount equal to the amount excluded from gross
14         income under Section 529(c)(3)(B);
15     and by deducting from the total so obtained the sum of the
16     following amounts:
17             (E) For taxable years ending before December 31,
18         2001, any amount included in such total in respect of
19         any compensation (including but not limited to any
20         compensation paid or accrued to a serviceman while a
21         prisoner of war or missing in action) paid to a
22         resident by reason of being on active duty in the Armed
23         Forces of the United States and in respect of any
24         compensation paid or accrued to a resident who as a
25         governmental employee was a prisoner of war or missing
26         in action, and in respect of any compensation paid to a
27         resident in 1971 or thereafter for annual training
28         performed pursuant to Sections 502 and 503, Title 32,
29         United States Code as a member of the Illinois National
30         Guard. For taxable years ending on or after December
31         31, 2001, any amount included in such total in respect
32         of any compensation (including but not limited to any
33         compensation paid or accrued to a serviceman while a
34         prisoner of war or missing in action) paid to a
35         resident by reason of being a member of any component
36         of the Armed Forces of the United States and in respect

 

 

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1         of any compensation paid or accrued to a resident who
2         as a governmental employee was a prisoner of war or
3         missing in action, and in respect of any compensation
4         paid to a resident in 2001 or thereafter by reason of
5         being a member of the Illinois National Guard. The
6         provisions of this amendatory Act of the 92nd General
7         Assembly are exempt from the provisions of Section 250;
8             (F) An amount equal to all amounts included in such
9         total pursuant to the provisions of Sections 402(a),
10         402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
11         Internal Revenue Code, or included in such total as
12         distributions under the provisions of any retirement
13         or disability plan for employees of any governmental
14         agency or unit, or retirement payments to retired
15         partners, which payments are excluded in computing net
16         earnings from self employment by Section 1402 of the
17         Internal Revenue Code and regulations adopted pursuant
18         thereto;
19             (G) The valuation limitation amount;
20             (H) An amount equal to the amount of any tax
21         imposed by this Act which was refunded to the taxpayer
22         and included in such total for the taxable year;
23             (I) An amount equal to all amounts included in such
24         total pursuant to the provisions of Section 111 of the
25         Internal Revenue Code as a recovery of items previously
26         deducted from adjusted gross income in the computation
27         of taxable income;
28             (J) An amount equal to those dividends included in
29         such total which were paid by a corporation which
30         conducts business operations in an Enterprise Zone or
31         zones created under the Illinois Enterprise Zone Act,
32         and conducts substantially all of its operations in an
33         Enterprise Zone or zones;
34             (K) An amount equal to those dividends included in
35         such total that were paid by a corporation that
36         conducts business operations in a federally designated

 

 

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1         Foreign Trade Zone or Sub-Zone and that is designated a
2         High Impact Business located in Illinois; provided
3         that dividends eligible for the deduction provided in
4         subparagraph (J) of paragraph (2) of this subsection
5         shall not be eligible for the deduction provided under
6         this subparagraph (K);
7             (L) For taxable years ending after December 31,
8         1983, an amount equal to all social security benefits
9         and railroad retirement benefits included in such
10         total pursuant to Sections 72(r) and 86 of the Internal
11         Revenue Code;
12             (M) With the exception of any amounts subtracted
13         under subparagraph (N), an amount equal to the sum of
14         all amounts disallowed as deductions by (i) Sections
15         171(a) (2), and 265(2) of the Internal Revenue Code of
16         1954, as now or hereafter amended, and all amounts of
17         expenses allocable to interest and disallowed as
18         deductions by Section 265(1) of the Internal Revenue
19         Code of 1954, as now or hereafter amended; and (ii) for
20         taxable years ending on or after August 13, 1999,
21         Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
22         the Internal Revenue Code; the provisions of this
23         subparagraph are exempt from the provisions of Section
24         250;
25             (N) An amount equal to all amounts included in such
26         total which are exempt from taxation by this State
27         either by reason of its statutes or Constitution or by
28         reason of the Constitution, treaties or statutes of the
29         United States; provided that, in the case of any
30         statute of this State that exempts income derived from
31         bonds or other obligations from the tax imposed under
32         this Act, the amount exempted shall be the interest net
33         of bond premium amortization;
34             (O) An amount equal to any contribution made to a
35         job training project established pursuant to the Tax
36         Increment Allocation Redevelopment Act;

 

 

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1             (P) An amount equal to the amount of the deduction
2         used to compute the federal income tax credit for
3         restoration of substantial amounts held under claim of
4         right for the taxable year pursuant to Section 1341 of
5         the Internal Revenue Code of 1986;
6             (Q) An amount equal to any amounts included in such
7         total, received by the taxpayer as an acceleration in
8         the payment of life, endowment or annuity benefits in
9         advance of the time they would otherwise be payable as
10         an indemnity for a terminal illness;
11             (R) An amount equal to the amount of any federal or
12         State bonus paid to veterans of the Persian Gulf War;
13             (S) An amount, to the extent included in adjusted
14         gross income, equal to the amount of a contribution
15         made in the taxable year on behalf of the taxpayer to a
16         medical care savings account established under the
17         Medical Care Savings Account Act or the Medical Care
18         Savings Account Act of 2000 to the extent the
19         contribution is accepted by the account administrator
20         as provided in that Act;
21             (T) An amount, to the extent included in adjusted
22         gross income, equal to the amount of interest earned in
23         the taxable year on a medical care savings account
24         established under the Medical Care Savings Account Act
25         or the Medical Care Savings Account Act of 2000 on
26         behalf of the taxpayer, other than interest added
27         pursuant to item (D-5) of this paragraph (2);
28             (U) For one taxable year beginning on or after
29         January 1, 1994, an amount equal to the total amount of
30         tax imposed and paid under subsections (a) and (b) of
31         Section 201 of this Act on grant amounts received by
32         the taxpayer under the Nursing Home Grant Assistance
33         Act during the taxpayer's taxable years 1992 and 1993;
34             (V) Beginning with tax years ending on or after
35         December 31, 1995 and ending with tax years ending on
36         or before December 31, 2004, an amount equal to the

 

 

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1         amount paid by a taxpayer who is a self-employed
2         taxpayer, a partner of a partnership, or a shareholder
3         in a Subchapter S corporation for health insurance or
4         long-term care insurance for that taxpayer or that
5         taxpayer's spouse or dependents, to the extent that the
6         amount paid for that health insurance or long-term care
7         insurance may be deducted under Section 213 of the
8         Internal Revenue Code of 1986, has not been deducted on
9         the federal income tax return of the taxpayer, and does
10         not exceed the taxable income attributable to that
11         taxpayer's income, self-employment income, or
12         Subchapter S corporation income; except that no
13         deduction shall be allowed under this item (V) if the
14         taxpayer is eligible to participate in any health
15         insurance or long-term care insurance plan of an
16         employer of the taxpayer or the taxpayer's spouse. The
17         amount of the health insurance and long-term care
18         insurance subtracted under this item (V) shall be
19         determined by multiplying total health insurance and
20         long-term care insurance premiums paid by the taxpayer
21         times a number that represents the fractional
22         percentage of eligible medical expenses under Section
23         213 of the Internal Revenue Code of 1986 not actually
24         deducted on the taxpayer's federal income tax return;
25             (W) For taxable years beginning on or after January
26         1, 1998, all amounts included in the taxpayer's federal
27         gross income in the taxable year from amounts converted
28         from a regular IRA to a Roth IRA. This paragraph is
29         exempt from the provisions of Section 250;
30             (X) For taxable year 1999 and thereafter, an amount
31         equal to the amount of any (i) distributions, to the
32         extent includible in gross income for federal income
33         tax purposes, made to the taxpayer because of his or
34         her status as a victim of persecution for racial or
35         religious reasons by Nazi Germany or any other Axis
36         regime or as an heir of the victim and (ii) items of

 

 

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1         income, to the extent includible in gross income for
2         federal income tax purposes, attributable to, derived
3         from or in any way related to assets stolen from,
4         hidden from, or otherwise lost to a victim of
5         persecution for racial or religious reasons by Nazi
6         Germany or any other Axis regime immediately prior to,
7         during, and immediately after World War II, including,
8         but not limited to, interest on the proceeds receivable
9         as insurance under policies issued to a victim of
10         persecution for racial or religious reasons by Nazi
11         Germany or any other Axis regime by European insurance
12         companies immediately prior to and during World War II;
13         provided, however, this subtraction from federal
14         adjusted gross income does not apply to assets acquired
15         with such assets or with the proceeds from the sale of
16         such assets; provided, further, this paragraph shall
17         only apply to a taxpayer who was the first recipient of
18         such assets after their recovery and who is a victim of
19         persecution for racial or religious reasons by Nazi
20         Germany or any other Axis regime or as an heir of the
21         victim. The amount of and the eligibility for any
22         public assistance, benefit, or similar entitlement is
23         not affected by the inclusion of items (i) and (ii) of
24         this paragraph in gross income for federal income tax
25         purposes. This paragraph is exempt from the provisions
26         of Section 250;
27             (Y) For taxable years beginning on or after January
28         1, 2002, moneys contributed in the taxable year to a
29         College Savings Pool account under Section 16.5 of the
30         State Treasurer Act, except that amounts excluded from
31         gross income under Section 529(c)(3)(C)(i) of the
32         Internal Revenue Code shall not be considered moneys
33         contributed under this subparagraph (Y). This
34         subparagraph (Y) is exempt from the provisions of
35         Section 250;
36             (Z) For taxable years 2001 and thereafter, for the

 

 

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1         taxable year in which the bonus depreciation deduction
2         (30% of the adjusted basis of the qualified property)
3         is taken on the taxpayer's federal income tax return
4         under subsection (k) of Section 168 of the Internal
5         Revenue Code and for each applicable taxable year
6         thereafter, an amount equal to "x", where:
7                 (1) "y" equals the amount of the depreciation
8             deduction taken for the taxable year on the
9             taxpayer's federal income tax return on property
10             for which the bonus depreciation deduction (30% of
11             the adjusted basis of the qualified property) was
12             taken in any year under subsection (k) of Section
13             168 of the Internal Revenue Code, but not including
14             the bonus depreciation deduction; and
15                 (2) "x" equals "y" multiplied by 30 and then
16             divided by 70 (or "y" multiplied by 0.429).
17             The aggregate amount deducted under this
18         subparagraph in all taxable years for any one piece of
19         property may not exceed the amount of the bonus
20         depreciation deduction (30% of the adjusted basis of
21         the qualified property) taken on that property on the
22         taxpayer's federal income tax return under subsection
23         (k) of Section 168 of the Internal Revenue Code; and
24             (AA) If the taxpayer reports a capital gain or loss
25         on the taxpayer's federal income tax return for the
26         taxable year based on a sale or transfer of property
27         for which the taxpayer was required in any taxable year
28         to make an addition modification under subparagraph
29         (D-15), then an amount equal to that addition
30         modification.
31             The taxpayer is allowed to take the deduction under
32         this subparagraph only once with respect to any one
33         piece of property; and
34             (BB) (Z) Any amount included in adjusted gross
35         income, other than salary, received by a driver in a
36         ridesharing arrangement using a motor vehicle.
 

 

 

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1     (b) Corporations.
2         (1) In general. In the case of a corporation, 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 and all distributions
10         received from regulated investment companies during
11         the taxable year to the extent excluded from gross
12         income in the computation of taxable income;
13             (B) An amount equal to the amount of tax imposed by
14         this Act to the extent deducted from gross income in
15         the computation of taxable income for the taxable year;
16             (C) In the case of a regulated investment company,
17         an amount equal to the excess of (i) the net long-term
18         capital gain for the taxable year, over (ii) the amount
19         of the capital gain dividends designated as such in
20         accordance with Section 852(b)(3)(C) of the Internal
21         Revenue Code and any amount designated under Section
22         852(b)(3)(D) of the Internal Revenue Code,
23         attributable to the taxable year (this amendatory Act
24         of 1995 (Public Act 89-89) is declarative of existing
25         law and is not a new enactment);
26             (D) The amount of any net operating loss deduction
27         taken in arriving at taxable income, other than a net
28         operating loss carried forward from a taxable year
29         ending prior to December 31, 1986;
30             (E) For taxable years in which a net operating loss
31         carryback or carryforward from a taxable year ending
32         prior to December 31, 1986 is an element of taxable
33         income under paragraph (1) of subsection (e) or
34         subparagraph (E) of paragraph (2) of subsection (e),
35         the amount by which addition modifications other than

 

 

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1         those provided by this subparagraph (E) exceeded
2         subtraction modifications in such earlier taxable
3         year, with the following limitations applied in the
4         order that they are listed:
5                 (i) the addition modification relating to the
6             net operating loss carried back or forward to the
7             taxable year from any taxable year ending prior to
8             December 31, 1986 shall be reduced by the amount of
9             addition modification under this subparagraph (E)
10             which related to that net operating loss and which
11             was taken into account in calculating the base
12             income of an earlier taxable year, and
13                 (ii) the addition modification relating to the
14             net operating loss carried back or forward to the
15             taxable year from any taxable year ending prior to
16             December 31, 1986 shall not exceed the amount of
17             such carryback or carryforward;
18             For taxable years in which there is a net operating
19         loss carryback or carryforward from more than one other
20         taxable year ending prior to December 31, 1986, the
21         addition modification provided in this subparagraph
22         (E) shall be the sum of the amounts computed
23         independently under the preceding provisions of this
24         subparagraph (E) for each such taxable year;
25             (E-5) For taxable years ending after December 31,
26         1997, an amount equal to any eligible remediation costs
27         that the corporation deducted in computing adjusted
28         gross income and for which the corporation claims a
29         credit under subsection (l) of Section 201;
30             (E-10) For taxable years 2001 and thereafter, an
31         amount equal to the bonus depreciation deduction (30%
32         of the adjusted basis of the qualified property) taken
33         on the taxpayer's federal income tax return for the
34         taxable year under subsection (k) of Section 168 of the
35         Internal Revenue Code; and
36             (E-11) If the taxpayer reports a capital gain or

 

 

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1         loss on the taxpayer's federal income tax return for
2         the taxable year based on a sale or transfer of
3         property for which the taxpayer was required in any
4         taxable year to make an addition modification under
5         subparagraph (E-10), then an amount equal to the
6         aggregate amount of the deductions taken in all taxable
7         years under subparagraph (T) with respect to that
8         property. ;
9             The taxpayer is required to make the addition
10         modification under this subparagraph only once with
11         respect to any one piece of property;
12     and by deducting from the total so obtained the sum of the
13     following amounts:
14             (F) An amount equal to the amount of any tax
15         imposed by this Act which was refunded to the taxpayer
16         and included in such total for the taxable year;
17             (G) An amount equal to any amount included in such
18         total under Section 78 of the Internal Revenue Code;
19             (H) In the case of a regulated investment company,
20         an amount equal to the amount of exempt interest
21         dividends as defined in subsection (b) (5) of Section
22         852 of the Internal Revenue Code, paid to shareholders
23         for the taxable year;
24             (I) With the exception of any amounts subtracted
25         under subparagraph (J), an amount equal to the sum of
26         all amounts disallowed as deductions by (i) Sections
27         171(a) (2), and 265(a)(2) and amounts disallowed as
28         interest expense by Section 291(a)(3) of the Internal
29         Revenue Code, as now or hereafter amended, and all
30         amounts of expenses allocable to interest and
31         disallowed as deductions by Section 265(a)(1) of the
32         Internal Revenue Code, as now or hereafter amended; and
33         (ii) for taxable years ending on or after August 13,
34         1999, Sections 171(a)(2), 265, 280C, 291(a)(3), and
35         832(b)(5)(B)(i) of the Internal Revenue Code; the
36         provisions of this subparagraph are exempt from the

 

 

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1         provisions of Section 250;
2             (J) An amount equal to all amounts included in such
3         total which are exempt from taxation by this State
4         either by reason of its statutes or Constitution or by
5         reason of the Constitution, treaties or statutes of the
6         United States; provided that, in the case of any
7         statute of this State that exempts income derived from
8         bonds or other obligations from the tax imposed under
9         this Act, the amount exempted shall be the interest net
10         of bond premium amortization;
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         and conducts substantially all of its operations in an
16         Enterprise Zone or zones;
17             (L) An amount equal to those dividends included in
18         such total that were paid by a corporation that
19         conducts business operations in a federally designated
20         Foreign Trade Zone or Sub-Zone and that is designated a
21         High Impact Business located in Illinois; provided
22         that dividends eligible for the deduction provided in
23         subparagraph (K) of paragraph 2 of this subsection
24         shall not be eligible for the deduction provided under
25         this subparagraph (L);
26             (M) For any taxpayer that is a financial
27         organization within the meaning of Section 304(c) of
28         this Act, an amount included in such total as interest
29         income from a loan or loans made by such taxpayer to a
30         borrower, to the extent that such a loan is secured by
31         property which is eligible for the Enterprise Zone
32         Investment Credit. To determine the portion of a loan
33         or loans that is secured by property eligible for a
34         Section 201(f) investment credit to the borrower, the
35         entire principal amount of the loan or loans between
36         the taxpayer and the borrower should be divided into

 

 

SB2893 - 14 - LRB093 17809 SJM 43490 b

1         the basis of the Section 201(f) investment credit
2         property which secures the loan or loans, using for
3         this purpose the original basis of such property on the
4         date that it was placed in service in the Enterprise
5         Zone. The subtraction modification available to
6         taxpayer in any year under this subsection shall be
7         that portion of the total interest paid by the borrower
8         with respect to such loan attributable to the eligible
9         property as calculated under the previous sentence;
10             (M-1) For any taxpayer that is a financial
11         organization within the meaning of Section 304(c) of
12         this Act, an amount included in such total as interest
13         income from a loan or loans made by such taxpayer to a
14         borrower, to the extent that such a loan is secured by
15         property which is eligible for the High Impact Business
16         Investment Credit. To determine the portion of a loan
17         or loans that is secured by property eligible for a
18         Section 201(h) investment credit to the borrower, the
19         entire principal amount of the loan or loans between
20         the taxpayer and the borrower should be divided into
21         the basis of the Section 201(h) investment credit
22         property which secures the loan or loans, using for
23         this purpose the original basis of such property on the
24         date that it was placed in service in a federally
25         designated Foreign Trade Zone or Sub-Zone located in
26         Illinois. No taxpayer that is eligible for the
27         deduction provided in subparagraph (M) of paragraph
28         (2) of this subsection shall be eligible for the
29         deduction provided under this subparagraph (M-1). The
30         subtraction modification available to taxpayers in any
31         year under this subsection shall be that portion of the
32         total interest paid by the borrower with respect to
33         such loan attributable to the eligible property as
34         calculated under the previous sentence;
35             (N) Two times any contribution made during the
36         taxable year to a designated zone organization to the

 

 

SB2893 - 15 - LRB093 17809 SJM 43490 b

1         extent that the contribution (i) qualifies as a
2         charitable contribution under subsection (c) of
3         Section 170 of the Internal Revenue Code and (ii) must,
4         by its terms, be used for a project approved by the
5         Department of Commerce and Economic Opportunity
6         Community Affairs under Section 11 of the Illinois
7         Enterprise Zone Act;
8             (O) An amount equal to: (i) 85% for taxable years
9         ending on or before December 31, 1992, or, a percentage
10         equal to the percentage allowable under Section
11         243(a)(1) of the Internal Revenue Code of 1986 for
12         taxable years ending after December 31, 1992, of the
13         amount by which dividends included in taxable income
14         and received from a corporation that is not created or
15         organized under the laws of the United States or any
16         state or political subdivision thereof, including, for
17         taxable years ending on or after December 31, 1988,
18         dividends received or deemed received or paid or deemed
19         paid under Sections 951 through 964 of the Internal
20         Revenue Code, exceed the amount of the modification
21         provided under subparagraph (G) of paragraph (2) of
22         this subsection (b) which is related to such dividends;
23         plus (ii) 100% of the amount by which dividends,
24         included in taxable income and received, including,
25         for taxable years ending on or after December 31, 1988,
26         dividends received or deemed received or paid or deemed
27         paid under Sections 951 through 964 of the Internal
28         Revenue Code, from any such corporation specified in
29         clause (i) that would but for the provisions of Section
30         1504 (b) (3) of the Internal Revenue Code be treated as
31         a member of the affiliated group which includes the
32         dividend recipient, exceed the amount of the
33         modification provided under subparagraph (G) of
34         paragraph (2) of this subsection (b) which is related
35         to such dividends;
36             (P) An amount equal to any contribution made to a

 

 

SB2893 - 16 - LRB093 17809 SJM 43490 b

1         job training project established pursuant to the Tax
2         Increment Allocation Redevelopment Act;
3             (Q) An amount equal to the amount of the deduction
4         used to compute the federal income tax credit for
5         restoration of substantial amounts held under claim of
6         right for the taxable year pursuant to Section 1341 of
7         the Internal Revenue Code of 1986;
8             (R) In the case of an attorney-in-fact with respect
9         to whom an interinsurer or a reciprocal insurer has
10         made the election under Section 835 of the Internal
11         Revenue Code, 26 U.S.C. 835, an amount equal to the
12         excess, if any, of the amounts paid or incurred by that
13         interinsurer or reciprocal insurer in the taxable year
14         to the attorney-in-fact over the deduction allowed to
15         that interinsurer or reciprocal insurer with respect
16         to the attorney-in-fact under Section 835(b) of the
17         Internal Revenue Code for the taxable year;
18             (S) For taxable years ending on or after December
19         31, 1997, in the case of a Subchapter S corporation, an
20         amount equal to all amounts of income allocable to a
21         shareholder subject to the Personal Property Tax
22         Replacement Income Tax imposed by subsections (c) and
23         (d) of Section 201 of this Act, including amounts
24         allocable to organizations exempt from federal income
25         tax by reason of Section 501(a) of the Internal Revenue
26         Code. This subparagraph (S) is exempt from the
27         provisions of Section 250;
28             (T) For taxable years 2001 and thereafter, for the
29         taxable year in which the bonus depreciation deduction
30         (30% of the adjusted basis of the qualified property)
31         is taken on the taxpayer's federal income tax return
32         under subsection (k) of Section 168 of the Internal
33         Revenue Code and for each applicable taxable year
34         thereafter, an amount equal to "x", where:
35                 (1) "y" equals the amount of the depreciation
36             deduction taken for the taxable year on the

 

 

SB2893 - 17 - LRB093 17809 SJM 43490 b

1             taxpayer's federal income tax return on property
2             for which the bonus depreciation deduction (30% of
3             the adjusted basis of the qualified property) was
4             taken in any year under subsection (k) of Section
5             168 of the Internal Revenue Code, but not including
6             the bonus depreciation deduction; and
7                 (2) "x" equals "y" multiplied by 30 and then
8             divided by 70 (or "y" multiplied by 0.429).
9             The aggregate amount deducted under this
10         subparagraph in all taxable years for any one piece of
11         property may not exceed the amount of the bonus
12         depreciation deduction (30% of the adjusted basis of
13         the qualified property) taken on that property on the
14         taxpayer's federal income tax return under subsection
15         (k) of Section 168 of the Internal Revenue Code; and
16             (U) If the taxpayer reports a capital gain or loss
17         on the taxpayer's federal income tax return for the
18         taxable year based on a sale or transfer of property
19         for which the taxpayer was required in any taxable year
20         to make an addition modification under subparagraph
21         (E-10), then an amount equal to that addition
22         modification.
23             The taxpayer is allowed to take the deduction under
24         this subparagraph only once with respect to any one
25         piece of property.
26         (3) Special rule. For purposes of paragraph (2) (A),
27     "gross income" in the case of a life insurance company, for
28     tax years ending on and after December 31, 1994, shall mean
29     the gross investment income for the taxable year.
 
30     (c) Trusts and estates.
31         (1) In general. In the case of a trust or estate, base
32     income means an amount equal to the taxpayer's taxable
33     income for the taxable year as modified by paragraph (2).
34         (2) Modifications. Subject to the provisions of
35     paragraph (3), the taxable income referred to in paragraph

 

 

SB2893 - 18 - LRB093 17809 SJM 43490 b

1     (1) shall be modified by adding thereto the sum of the
2     following amounts:
3             (A) An amount equal to all amounts paid or accrued
4         to the taxpayer as interest or dividends during the
5         taxable year to the extent excluded from gross income
6         in the computation of taxable income;
7             (B) In the case of (i) an estate, $600; (ii) a
8         trust which, under its governing instrument, is
9         required to distribute all of its income currently,
10         $300; and (iii) any other trust, $100, but in each such
11         case, only to the extent such amount was deducted in
12         the computation of taxable income;
13             (C) An amount equal to the amount of tax imposed by
14         this Act to the extent deducted from gross income in
15         the computation of taxable income for the taxable year;
16             (D) The amount of any net operating loss deduction
17         taken in arriving at taxable income, other than a net
18         operating loss carried forward from a taxable year
19         ending prior to December 31, 1986;
20             (E) For taxable years in which a net operating loss
21         carryback or carryforward from a taxable year ending
22         prior to December 31, 1986 is an element of taxable
23         income under paragraph (1) of subsection (e) or
24         subparagraph (E) of paragraph (2) of subsection (e),
25         the amount by which addition modifications other than
26         those provided by this subparagraph (E) exceeded
27         subtraction modifications in such taxable year, with
28         the following limitations applied in the order that
29         they are listed:
30                 (i) the addition modification relating to the
31             net operating loss carried back or forward to the
32             taxable year from any taxable year ending prior to
33             December 31, 1986 shall be reduced by the amount of
34             addition modification under this subparagraph (E)
35             which related to that net operating loss and which
36             was taken into account in calculating the base

 

 

SB2893 - 19 - LRB093 17809 SJM 43490 b

1             income of an earlier taxable year, and
2                 (ii) the addition modification relating to the
3             net operating loss carried back or forward to the
4             taxable year from any taxable year ending prior to
5             December 31, 1986 shall not exceed the amount of
6             such carryback or carryforward;
7             For taxable years in which there is a net operating
8         loss carryback or carryforward from more than one other
9         taxable year ending prior to December 31, 1986, the
10         addition modification provided in this subparagraph
11         (E) shall be the sum of the amounts computed
12         independently under the preceding provisions of this
13         subparagraph (E) for each such taxable year;
14             (F) For taxable years ending on or after January 1,
15         1989, an amount equal to the tax deducted pursuant to
16         Section 164 of the Internal Revenue Code if the trust
17         or estate is claiming the same tax for purposes of the
18         Illinois foreign tax credit under Section 601 of this
19         Act;
20             (G) An amount equal to the amount of the capital
21         gain deduction allowable under the Internal Revenue
22         Code, to the extent deducted from gross income in the
23         computation of taxable income;
24             (G-5) For taxable years ending after December 31,
25         1997, an amount equal to any eligible remediation costs
26         that the trust or estate deducted in computing adjusted
27         gross income and for which the trust or estate claims a
28         credit under subsection (l) of Section 201;
29             (G-10) For taxable years 2001 and thereafter, an
30         amount equal to the bonus depreciation deduction (30%
31         of the adjusted basis of the qualified property) taken
32         on the taxpayer's federal income tax return for the
33         taxable year under subsection (k) of Section 168 of the
34         Internal Revenue Code; and
35             (G-11) If the taxpayer reports a capital gain or
36         loss on the taxpayer's federal income tax return for

 

 

SB2893 - 20 - LRB093 17809 SJM 43490 b

1         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 (G-10), then an amount equal to the
5         aggregate amount of the deductions taken in all taxable
6         years under subparagraph (R) with respect to that
7         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 the
12     following amounts:
13             (H) An amount equal to all amounts included in such
14         total pursuant to the provisions of Sections 402(a),
15         402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
16         Internal Revenue Code or included in such total as
17         distributions under the provisions of any retirement
18         or disability plan for employees of any governmental
19         agency or unit, or retirement payments to retired
20         partners, which payments are excluded in computing net
21         earnings from self employment by Section 1402 of the
22         Internal Revenue Code and regulations adopted pursuant
23         thereto;
24             (I) The valuation limitation amount;
25             (J) An amount equal to the amount of any tax
26         imposed by this Act which was refunded to the taxpayer
27         and included in such total for the taxable year;
28             (K) An amount equal to all amounts included in
29         taxable income as modified by subparagraphs (A), (B),
30         (C), (D), (E), (F) and (G) which are exempt from
31         taxation by this State either by reason of its statutes
32         or Constitution or by reason of the Constitution,
33         treaties or statutes of the United States; provided
34         that, in the case of any statute of this State that
35         exempts income derived from bonds or other obligations
36         from the tax imposed under this Act, the amount

 

 

SB2893 - 21 - LRB093 17809 SJM 43490 b

1         exempted shall be the interest net of bond premium
2         amortization;
3             (L) With the exception of any amounts subtracted
4         under subparagraph (K), an amount equal to the sum of
5         all amounts disallowed as deductions by (i) Sections
6         171(a) (2) and 265(a)(2) of the Internal Revenue Code,
7         as now or hereafter amended, and all amounts of
8         expenses allocable to interest and disallowed as
9         deductions by Section 265(1) of the Internal Revenue
10         Code of 1954, as now or hereafter amended; and (ii) for
11         taxable years ending on or after August 13, 1999,
12         Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
13         the Internal Revenue Code; the provisions of this
14         subparagraph are exempt from the provisions of Section
15         250;
16             (M) An amount equal to those dividends included in
17         such total which were paid by a corporation which
18         conducts business operations in an Enterprise Zone or
19         zones created under the Illinois Enterprise Zone Act
20         and conducts substantially all of its operations in an
21         Enterprise Zone or Zones;
22             (N) An amount equal to any contribution made to a
23         job training project established pursuant to the Tax
24         Increment Allocation Redevelopment Act;
25             (O) An amount equal to those dividends included in
26         such total that were paid by a corporation that
27         conducts business operations in a federally designated
28         Foreign Trade Zone or Sub-Zone and that is designated a
29         High Impact Business located in Illinois; provided
30         that dividends eligible for the deduction provided in
31         subparagraph (M) of paragraph (2) of this subsection
32         shall not be eligible for the deduction provided under
33         this subparagraph (O);
34             (P) An amount equal to the amount of the deduction
35         used to compute the federal income tax credit for
36         restoration of substantial amounts held under claim of

 

 

SB2893 - 22 - LRB093 17809 SJM 43490 b

1         right for the taxable year pursuant to Section 1341 of
2         the Internal Revenue Code of 1986;
3             (Q) For taxable year 1999 and thereafter, an amount
4         equal to the amount of any (i) distributions, to the
5         extent includible in gross income for federal income
6         tax purposes, made to the taxpayer because of his or
7         her status as a victim of persecution for racial or
8         religious reasons by Nazi Germany or any other Axis
9         regime or as an heir of the victim and (ii) items of
10         income, to the extent includible in gross income for
11         federal income tax purposes, attributable to, derived
12         from or in any way related to assets stolen from,
13         hidden from, or otherwise lost to a victim of
14         persecution for racial or religious reasons by Nazi
15         Germany or any other Axis regime immediately prior to,
16         during, and immediately after World War II, including,
17         but not limited to, interest on the proceeds receivable
18         as insurance under policies issued to a victim of
19         persecution for racial or religious reasons by Nazi
20         Germany or any other Axis regime by European insurance
21         companies immediately prior to and during World War II;
22         provided, however, this subtraction from federal
23         adjusted gross income does not apply to assets acquired
24         with such assets or with the proceeds from the sale of
25         such assets; provided, further, this paragraph shall
26         only apply to a taxpayer who was the first recipient of
27         such assets after their recovery and who is a victim of
28         persecution for racial or religious reasons by Nazi
29         Germany or any other Axis regime or as an heir of the
30         victim. The amount of and the eligibility for any
31         public assistance, benefit, or similar entitlement is
32         not affected by the inclusion of items (i) and (ii) of
33         this paragraph in gross income for federal income tax
34         purposes. This paragraph is exempt from the provisions
35         of Section 250;
36             (R) For taxable years 2001 and thereafter, for the

 

 

SB2893 - 23 - LRB093 17809 SJM 43490 b

1         taxable year in which the bonus depreciation deduction
2         (30% of the adjusted basis of the qualified property)
3         is taken on the taxpayer's federal income tax return
4         under subsection (k) of Section 168 of the Internal
5         Revenue Code and for each applicable taxable year
6         thereafter, an amount equal to "x", where:
7                 (1) "y" equals the amount of the depreciation
8             deduction taken for the taxable year on the
9             taxpayer's federal income tax return on property
10             for which the bonus depreciation deduction (30% of
11             the adjusted basis of the qualified property) was
12             taken in any year under subsection (k) of Section
13             168 of the Internal Revenue Code, but not including
14             the bonus depreciation deduction; and
15                 (2) "x" equals "y" multiplied by 30 and then
16             divided by 70 (or "y" multiplied by 0.429).
17             The aggregate amount deducted under this
18         subparagraph in all taxable years for any one piece of
19         property may not exceed the amount of the bonus
20         depreciation deduction (30% of the adjusted basis of
21         the qualified property) taken on that property on the
22         taxpayer's federal income tax return under subsection
23         (k) of Section 168 of the Internal Revenue Code; and
24             (S) If the taxpayer reports a capital gain or loss
25         on the taxpayer's federal income tax return for the
26         taxable year based on a sale or transfer of property
27         for which the taxpayer was required in any taxable year
28         to make an addition modification under subparagraph
29         (G-10), then an amount equal to that addition
30         modification.
31             The taxpayer is allowed to take the deduction under
32         this subparagraph only once with respect to any one
33         piece of property.
34         (3) Limitation. The amount of any modification
35     otherwise required under this subsection shall, under
36     regulations prescribed by the Department, be adjusted by

 

 

SB2893 - 24 - LRB093 17809 SJM 43490 b

1     any amounts included therein which were properly paid,
2     credited, or required to be distributed, or permanently set
3     aside for charitable purposes pursuant to Internal Revenue
4     Code Section 642(c) during the taxable year.
 
5     (d) Partnerships.
6         (1) In general. In the case of a partnership, base
7     income means an amount equal to the taxpayer's taxable
8     income for the taxable year as modified by paragraph (2).
9         (2) Modifications. The taxable income referred to in
10     paragraph (1) shall be modified by adding thereto the sum
11     of the following amounts:
12             (A) An amount equal to all amounts paid or accrued
13         to the taxpayer as interest or dividends during the
14         taxable year to the extent excluded from gross income
15         in the computation of taxable income;
16             (B) An amount equal to the amount of tax imposed by
17         this Act to the extent deducted from gross income for
18         the taxable year;
19             (C) The amount of deductions allowed to the
20         partnership pursuant to Section 707 (c) of the Internal
21         Revenue Code in calculating its taxable income;
22             (D) An amount equal to the amount of the capital
23         gain deduction allowable under the Internal Revenue
24         Code, to the extent deducted from gross income in the
25         computation of taxable income;
26             (D-5) 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             (D-6) 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

 

 

SB2893 - 25 - LRB093 17809 SJM 43490 b

1         taxable year to make an addition modification under
2         subparagraph (D-5), then an amount equal to the
3         aggregate amount of the deductions taken in all taxable
4         years under subparagraph (O) with respect to that
5         property. ;
6             The taxpayer is required to make the addition
7         modification under this subparagraph only once with
8         respect to any one piece of property;
9     and by deducting from the total so obtained the following
10     amounts:
11             (E) The valuation limitation amount;
12             (F) An amount equal to the amount of any tax
13         imposed by this Act which was refunded to the taxpayer
14         and included in such total for the taxable year;
15             (G) An amount equal to all amounts included in
16         taxable income as modified by subparagraphs (A), (B),
17         (C) and (D) which are exempt from taxation by this
18         State either by reason of its statutes or Constitution
19         or by reason of the Constitution, treaties or statutes
20         of the United States; provided that, in the case of any
21         statute of this State that exempts income derived from
22         bonds or other obligations from the tax imposed under
23         this Act, the amount exempted shall be the interest net
24         of bond premium amortization;
25             (H) Any income of the partnership which
26         constitutes personal service income as defined in
27         Section 1348 (b) (1) of the Internal Revenue Code (as
28         in effect December 31, 1981) or a reasonable allowance
29         for compensation paid or accrued for services rendered
30         by partners to the partnership, whichever is greater;
31             (I) An amount equal to all amounts of income
32         distributable to an entity subject to the Personal
33         Property Tax Replacement Income Tax imposed by
34         subsections (c) and (d) of Section 201 of this Act
35         including amounts distributable to organizations
36         exempt from federal income tax by reason of Section

 

 

SB2893 - 26 - LRB093 17809 SJM 43490 b

1         501(a) of the Internal Revenue Code;
2             (J) With the exception of any amounts subtracted
3         under subparagraph (G), an amount equal to the sum of
4         all amounts disallowed as deductions by (i) Sections
5         171(a) (2), and 265(2) of the Internal Revenue Code of
6         1954, as now or hereafter amended, and all amounts of
7         expenses allocable to interest and disallowed as
8         deductions by Section 265(1) of the Internal Revenue
9         Code, as now or hereafter amended; and (ii) for taxable
10         years ending on or after August 13, 1999, Sections
11         171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
12         Internal Revenue Code; the provisions of this
13         subparagraph are exempt from the provisions of Section
14         250;
15             (K) An amount equal to those dividends included in
16         such total which were paid by a corporation which
17         conducts business operations in an Enterprise Zone or
18         zones created under the Illinois Enterprise Zone Act,
19         enacted by the 82nd General Assembly, and conducts
20         substantially all of its operations in an Enterprise
21         Zone or Zones;
22             (L) An amount equal to any contribution made to a
23         job training project established pursuant to the Real
24         Property Tax Increment Allocation Redevelopment Act;
25             (M) An amount equal to those dividends included in
26         such total that were paid by a corporation that
27         conducts business operations in a federally designated
28         Foreign Trade Zone or Sub-Zone and that is designated a
29         High Impact Business located in Illinois; provided
30         that dividends eligible for the deduction provided in
31         subparagraph (K) of paragraph (2) of this subsection
32         shall not be eligible for the deduction provided under
33         this subparagraph (M);
34             (N) An amount equal to the amount of the deduction
35         used to compute the federal income tax credit for
36         restoration of substantial amounts held under claim of

 

 

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1         right for the taxable year pursuant to Section 1341 of
2         the Internal Revenue Code of 1986;
3             (O) For taxable years 2001 and thereafter, for the
4         taxable year in which the bonus depreciation deduction
5         (30% of the adjusted basis of the qualified property)
6         is taken on the taxpayer's federal income tax return
7         under subsection (k) of Section 168 of the Internal
8         Revenue Code and for each applicable taxable year
9         thereafter, an amount equal to "x", where:
10                 (1) "y" equals the amount of the depreciation
11             deduction taken for the taxable year on the
12             taxpayer's federal income tax return on property
13             for which the bonus depreciation deduction (30% of
14             the adjusted basis of the qualified property) was
15             taken in any year under subsection (k) of Section
16             168 of the Internal Revenue Code, but not including
17             the bonus depreciation deduction; and
18                 (2) "x" equals "y" multiplied by 30 and then
19             divided by 70 (or "y" multiplied by 0.429).
20             The aggregate amount deducted under this
21         subparagraph in all taxable years for any one piece of
22         property may not exceed the amount of the bonus
23         depreciation deduction (30% of the adjusted basis of
24         the qualified property) taken on that property on the
25         taxpayer's federal income tax return under subsection
26         (k) of Section 168 of the Internal Revenue Code; and
27             (P) If the taxpayer reports a capital gain or loss
28         on the taxpayer's federal income tax return for the
29         taxable year based on a sale or transfer of property
30         for which the taxpayer was required in any taxable year
31         to make an addition modification under subparagraph
32         (D-5), then an amount equal to that addition
33         modification.
34             The taxpayer is allowed to take the deduction under
35         this subparagraph only once with respect to any one
36         piece of property.
 

 

 

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1     (e) Gross income; adjusted gross income; taxable income.
2         (1) In general. Subject to the provisions of paragraph
3     (2) and subsection (b) (3), for purposes of this Section
4     and Section 803(e), a taxpayer's gross income, adjusted
5     gross income, or taxable income for the taxable year shall
6     mean the amount of gross income, adjusted gross income or
7     taxable income properly reportable for federal income tax
8     purposes for the taxable year under the provisions of the
9     Internal Revenue Code. Taxable income may be less than
10     zero. However, for taxable years ending on or after
11     December 31, 1986, net operating loss carryforwards from
12     taxable years ending prior to December 31, 1986, may not
13     exceed the sum of federal taxable income for the taxable
14     year before net operating loss deduction, plus the excess
15     of addition modifications over subtraction modifications
16     for the taxable year. For taxable years ending prior to
17     December 31, 1986, taxable income may never be an amount in
18     excess of the net operating loss for the taxable year as
19     defined in subsections (c) and (d) of Section 172 of the
20     Internal Revenue Code, provided that when taxable income of
21     a corporation (other than a Subchapter S corporation),
22     trust, or estate is less than zero and addition
23     modifications, other than those provided by subparagraph
24     (E) of paragraph (2) of subsection (b) for corporations or
25     subparagraph (E) of paragraph (2) of subsection (c) for
26     trusts and estates, exceed subtraction modifications, an
27     addition modification must be made under those
28     subparagraphs for any other taxable year to which the
29     taxable income less than zero (net operating loss) is
30     applied under Section 172 of the Internal Revenue Code or
31     under subparagraph (E) of paragraph (2) of this subsection
32     (e) applied in conjunction with Section 172 of the Internal
33     Revenue Code.
34         (2) Special rule. For purposes of paragraph (1) of this
35     subsection, the taxable income properly reportable for

 

 

SB2893 - 29 - LRB093 17809 SJM 43490 b

1     federal income tax purposes shall mean:
2             (A) Certain life insurance companies. In the case
3         of a life insurance company subject to the tax imposed
4         by Section 801 of the Internal Revenue Code, life
5         insurance company taxable income, plus the amount of
6         distribution from pre-1984 policyholder surplus
7         accounts as calculated under Section 815a of the
8         Internal Revenue Code;
9             (B) Certain other insurance companies. In the case
10         of mutual insurance companies subject to the tax
11         imposed by Section 831 of the Internal Revenue Code,
12         insurance company taxable income;
13             (C) Regulated investment companies. In the case of
14         a regulated investment company subject to the tax
15         imposed by Section 852 of the Internal Revenue Code,
16         investment company taxable income;
17             (D) Real estate investment trusts. In the case of a
18         real estate investment trust subject to the tax imposed
19         by Section 857 of the Internal Revenue Code, real
20         estate investment trust taxable income;
21             (E) Consolidated corporations. In the case of a
22         corporation that which is a member of an affiliated
23         group of corporations filing a consolidated income tax
24         return for the taxable year for federal income tax
25         purposes, taxable income determined as if such
26         corporation had filed a separate return for federal
27         income tax purposes for the taxable year and each
28         preceding taxable year for which it was a member of an
29         affiliated group. For purposes of this subparagraph,
30         the taxpayer's separate taxable income shall be
31         determined as if the election provided by Section
32         243(b) (2) of the Internal Revenue Code had been in
33         effect for all such years;
34             (F) Cooperatives. In the case of a cooperative
35         corporation or association, the taxable income of such
36         organization determined in accordance with the

 

 

SB2893 - 30 - LRB093 17809 SJM 43490 b

1         provisions of Section 1381 through 1388 of the Internal
2         Revenue Code;
3             (G) Subchapter S corporations. In the case of: (i)
4         a Subchapter S corporation for which there is in effect
5         an election for the taxable year under Section 1362 of
6         the Internal Revenue Code, the taxable income of such
7         corporation determined in accordance with Section
8         1363(b) of the Internal Revenue Code, except that
9         taxable income shall take into account those items
10         which are required by Section 1363(b)(1) of the
11         Internal Revenue Code to be separately stated; and (ii)
12         a Subchapter S corporation for which there is in effect
13         a federal election to opt out of the provisions of the
14         Subchapter S Revision Act of 1982 and have applied
15         instead the prior federal Subchapter S rules as in
16         effect on July 1, 1982, the taxable income of such
17         corporation determined in accordance with the federal
18         Subchapter S rules as in effect on July 1, 1982; and
19             (H) Partnerships. In the case of a partnership,
20         taxable income determined in accordance with Section
21         703 of the Internal Revenue Code, except that taxable
22         income shall take into account those items which are
23         required by Section 703(a)(1) to be separately stated
24         but which would be taken into account by an individual
25         in calculating his taxable income.
 
26     (f) Valuation limitation amount.
27         (1) In general. The valuation limitation amount
28     referred to in subsections (a) (2) (G), (c) (2) (I) and
29     (d)(2) (E) is an amount equal to:
30             (A) The sum of the pre-August 1, 1969 appreciation
31         amounts (to the extent consisting of gain reportable
32         under the provisions of Section 1245 or 1250 of the
33         Internal Revenue Code) for all property in respect of
34         which such gain was reported for the taxable year; plus
35             (B) The lesser of (i) the sum of the pre-August 1,

 

 

SB2893 - 31 - LRB093 17809 SJM 43490 b

1         1969 appreciation amounts (to the extent consisting of
2         capital gain) for all property in respect of which such
3         gain was reported for federal income tax purposes for
4         the taxable year, or (ii) the net capital gain for the
5         taxable year, reduced in either case by any amount of
6         such gain included in the amount determined under
7         subsection (a) (2) (F) or (c) (2) (H).
8         (2) Pre-August 1, 1969 appreciation amount.
9             (A) If the fair market value of property referred
10         to in paragraph (1) was readily ascertainable on August
11         1, 1969, the pre-August 1, 1969 appreciation amount for
12         such property is the lesser of (i) the excess of such
13         fair market value over the taxpayer's basis (for
14         determining gain) for such property on that date
15         (determined under the Internal Revenue Code as in
16         effect on that date), or (ii) the total gain realized
17         and reportable for federal income tax purposes in
18         respect of the sale, exchange or other disposition of
19         such property.
20             (B) If the fair market value of property referred
21         to in paragraph (1) was not readily ascertainable on
22         August 1, 1969, the pre-August 1, 1969 appreciation
23         amount for such property is that amount which bears the
24         same ratio to the total gain reported in respect of the
25         property for federal income tax purposes for the
26         taxable year, as the number of full calendar months in
27         that part of the taxpayer's holding period for the
28         property ending July 31, 1969 bears to the number of
29         full calendar months in the taxpayer's entire holding
30         period for the property.
31             (C) The Department shall prescribe such
32         regulations as may be necessary to carry out the
33         purposes of this paragraph.
 
34     (g) Double deductions. Unless specifically provided
35 otherwise, nothing in this Section shall permit the same item

 

 

SB2893 - 32 - LRB093 17809 SJM 43490 b

1 to be deducted more than once.
 
2     (h) Legislative intention. Except as expressly provided by
3 this Section there shall be no modifications or limitations on
4 the amounts of income, gain, loss or deduction taken into
5 account in determining gross income, adjusted gross income or
6 taxable income for federal income tax purposes for the taxable
7 year, or in the amount of such items entering into the
8 computation of base income and net income under this Act for
9 such taxable year, whether in respect of property values as of
10 August 1, 1969 or otherwise.
11 (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99;
12 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676, eff.
13 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01; 92-16,
14 eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff. 8-17-01;
15 92-603, eff. 6-28-02; 92-626, eff. 7-11-02; 92-651, eff.
16 7-11-02; 92-846, eff. 8-23-02; revised 10-15-03.)