[ Search ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
| [ Introduced ] | [ Engrossed ] | [ Enrolled ] |
| [ House Amendment 001 ] | [ House Amendment 003 ] | [ Senate Amendment 001 ] |
| [ Senate Amendment 002 ] | [ Senate Amendment 005 ] |
91_HB2980sam004
LRB9107003WHdvam01
1 AMENDMENT TO HOUSE BILL 2980
2 AMENDMENT NO. . Amend House Bill 2980, AS AMENDED,
3 by replacing the title with the following:
4 "AN ACT in relation to medical care savings accounts.";
5 and
6 by replacing everything after the enacting clause with the
7 following:
8 "Section 1. Short title. This Act may be cited as the
9 Medical Care Savings Account Act of 2000.
10 Section 3. Programs under prior Act. Programs
11 established under the Medical Care Savings Account Act are
12 subject to and shall be governed by this Act.
13 Section 5. Definitions. In this Act:
14 "Account administrator" means any of the following:
15 (1) A national or state chartered bank, a federal
16 or state chartered savings and loan association, a
17 federal or state chartered savings bank, or a federal or
18 state chartered credit union.
19 (2) A trust company authorized to act as a
20 fiduciary.
21 (3) An insurance company authorized to do business
-2- LRB9107003WHdvam01
1 in this State under the Illinois Insurance Code or a
2 health maintenance organization authorized to do business
3 in this State under the Health Maintenance Organization
4 Act.
5 (4) A dealer, salesperson, or investment adviser
6 registered under the Illinois Securities Law of 1953.
7 (5) An administrator as defined in Section 511.101
8 of the Illinois Insurance Code who is licensed under
9 Article XXXI 1/4 of that Code.
10 (6) A certified public accountant registered under
11 the Illinois Public Accounting Act.
12 (7) An attorney licensed to practice in this State.
13 (8) An employer, if the employer has a self-insured
14 health plan under the federal Employee Retirement Income
15 Security Act of 1974 (ERISA).
16 (9) An employer that participates in the medical
17 care savings account program.
18 "Deductible" means the total deductible for an employee
19 and all the dependents of that employee for a calendar year.
20 "Dependent" means the spouse of the employee or a child
21 of the employee if the child is any of the following:
22 (1) Under 19 years of age, or under 23 years of age
23 and enrolled as a full-time student at an accredited
24 college or university.
25 (2) Legally entitled to the provision of proper or
26 necessary subsistence, education, medical care, or other
27 care necessary for his or her health, guidance, or
28 well-being and not otherwise emancipated,
29 self-supporting, married, or a member of the armed forces
30 of the United States.
31 (3) Mentally or physically incapacitated to the
32 extent that he or she is not self-sufficient.
33 "Domicile" means a place where an individual has his or
34 her true, fixed, and permanent home and principal
-3- LRB9107003WHdvam01
1 establishment, to which, whenever absent, he or she intends
2 to return. Domicile continues until another permanent home
3 or principal establishment is established.
4 "Eligible medical expense" means an expense paid by the
5 taxpayer for medical care described in Section 213(d) of the
6 Internal Revenue Code.
7 "Employee" means the individual for whose benefit or for
8 the benefit of whose dependents a medical care savings
9 account is established. Employee includes a self-employed
10 individual.
11 "Higher deductible" means a deductible subject to a
12 minimum and maximum established for 1999 by the Department of
13 Revenue under the Medical Care Savings Account Act. The
14 minimum and maximum shall be adjusted for 2000 and annually
15 thereafter by the Department of Revenue to reflect increases
16 in the consumer price index for the United States as defined
17 and officially reported by the United States Department of
18 Labor.
19 "Medical care savings account" or "account" means an
20 account established in this State pursuant to a medical care
21 savings account program to pay the eligible medical expenses
22 of an employee and his or her dependents.
23 "Medical care savings account program" or "program" means
24 a program that includes all of the following:
25 (1) The purchase by an employer of a qualified
26 higher deductible health plan for the benefit of an
27 employee and his or her dependents.
28 (2) The contribution on behalf of an employee into
29 a medical care savings account by his or her employer of
30 all or part of the premium differential realized by the
31 employer based on the purchase of a qualified higher
32 deductible health plan for the benefit of the employee.
33 An employer that did not previously provide a health
34 coverage policy, certificate, or contract for his or her
-4- LRB9107003WHdvam01
1 employees may contribute all or part of the deductible of
2 the plan purchased pursuant to paragraph (1). A
3 contribution under this paragraph may not exceed the
4 maximum amounts established for 1999 by the Department of
5 Revenue for 2 taxpayers filing a joint return, if each
6 taxpayer has a medical care savings account but neither
7 is covered by the other's health coverage, and for all
8 other cases. The maximum amounts shall be adjusted for
9 2000 and annually thereafter by the Department of Revenue
10 to reflect increases in the consumer price index for the
11 United States as defined and officially reported by the
12 United States Department of Labor.
13 (3) An account administrator to administer the
14 medical care savings account from which payment of claims
15 is made. Not more than 30 days after an account
16 administrator begins to administer an account, the
17 administrator shall notify in writing each employee on
18 whose behalf the administrator administers an account of
19 the date of the last business day of the administrator's
20 business year.
21 "Qualified higher deductible health plan" means a health
22 coverage policy, certificate, or contract that provides for
23 payments for covered benefits that exceed the higher
24 deductible and that is purchased by an employer for the
25 benefit of an employee for whom the employer makes deposits
26 into a medical care savings account.
27 Section 10. Program offer; tax treatment.
28 (a) For tax years ending on or after December 31, 2000,
29 an employer, except as otherwise provided by statute,
30 contract, or a collective bargaining agreement, may offer a
31 medical care savings account program to the employer's
32 employees.
33 (b) Before making any contribution to an account, an
-5- LRB9107003WHdvam01
1 employer that offers a medical care savings account program
2 shall inform all its employees in writing of the federal tax
3 status of contributions made pursuant to this Act.
4 (c) Except as provided in Section 20, principal
5 contributed to and interest earned on a medical care savings
6 account and money reimbursed to an employee for eligible
7 medical expenses are exempt from taxation under the
8 Illinois Income Tax Act as provided in that Act.
9 Section 15. Use of account moneys.
10 (a) The account administrator shall utilize the moneys
11 held in a medical care savings account solely for the purpose
12 of paying the medical expenses of the employee or his or her
13 dependents or to purchase a health coverage policy,
14 certificate, or contract if the employee does not otherwise
15 have health insurance coverage. Moneys held in a medical care
16 savings account may not be used to cover medical expenses of
17 the employee or his or her dependents that are otherwise
18 covered, including but not limited to medical expenses
19 covered pursuant to an automobile insurance policy, workers'
20 compensation insurance policy or self-insured plan, or
21 another health coverage policy, certificate, or contract.
22 (b) The employee may submit documentation of medical
23 expenses paid by the employee in the tax year to the account
24 administrator, and the account administrator shall
25 reimburse the employee from the employee's account for
26 eligible medical expenses.
27 (c) If an employer makes contributions to a medical
28 care savings account program on a periodic installment
29 basis, the employer may advance to an employee, interest
30 free, an amount necessary to cover medical expenses incurred
31 that exceed the amount in the employee's medical care savings
32 account when the expense is incurred if the employee agrees
33 to repay the advance from future installments or when he or
-6- LRB9107003WHdvam01
1 she ceases to be an employee of the employer.
2 Section 20. Withdrawals from account.
3 (a) Notwithstanding subsection (b) and subject to
4 subsection (c), an employee may withdraw money from his or
5 her medical care savings account for any purpose other than a
6 purpose described in subsection (a) of Section 15 only on the
7 last business day of the account administrator's business
8 year. Money withdrawn pursuant to this subsection is income
9 for purposes of the Illinois Income Tax Act in the taxable
10 year of the withdrawal, as provided in that Act.
11 (b) Subject to subsection (c), if the employee withdraws
12 money for any purpose other than a purpose described in
13 subsection (a) of Section 15 at any other time, all of the
14 following apply:
15 (1) The amount of the withdrawal is income for
16 purposes of the Illinois Income Tax Act in the taxable
17 year of the withdrawal, as provided in that Act.
18 (2) The administrator shall withhold and on behalf
19 of the employee shall pay a penalty to the Department of
20 Revenue equal to 10% of the amount of the withdrawal.
21 (3) Interest earned on the account during the
22 taxable year in which a withdrawal under this subsection
23 is made is income for purposes of the Illinois Income Tax
24 Act, as provided in that Act.
25 (c) The amount of a disbursement of any assets of a
26 medical care savings account pursuant to a filing for
27 protection under Title 11 of the United States Code, 11
28 U.S.C. 101 to 1330, by an employee or person for whose
29 benefit the account was established is not considered a
30 withdrawal for purposes of this Section. The amount of a
31 disbursement is not subject to taxation under the Illinois
32 Income Tax Act, and subsection (b) does not apply.
33 (d) Upon the death of the employee, the account
-7- LRB9107003WHdvam01
1 administrator shall distribute the principal and accumulated
2 interest of the medical care savings account to the estate
3 of the employee.
4 (e) If (i) an employee is no longer employed by an
5 employer that participates in a medical care savings account
6 program, (ii) the employee, not more than 60 days after his
7 or her final day of employment, transfers the account to a
8 new account administrator or requests in writing to the
9 former employer's account administrator that the account
10 remain with that administrator, and (iii) that account
11 administrator agrees to retain the account, then the money in
12 the medical care savings account may be utilized for the
13 benefit of the employee or his or her dependents subject to
14 this Act and remains exempt from taxation pursuant to this
15 Act. Not more than 30 days after the expiration of the 60
16 days, if an account administrator has not accepted the
17 former employee's account, the employer shall mail a check to
18 the former employee, at the employee's last known address,
19 for an amount equal to the amount in the account on that day,
20 and that amount is subject to taxation pursuant to subsection
21 (a) of this Section but is not subject to the penalty
22 under paragraph (2) of subsection (b) of this Section. If an
23 employee becomes employed with a different employer that
24 participates in a medical care savings account program, the
25 employee may transfer his or her medical care savings
26 account to that new employer's account administrator.
27 Section 30. Administrator; fiduciary duty. An account
28 administrator shall discharge his or her duties as a
29 fiduciary in a manner consistent with the fiduciary standards
30 required by 29 U.S.C 1104 and shall not engage in any
31 self-dealing transactions in the investment of account
32 assets.
-8- LRB9107003WHdvam01
1 Section 85. Repealer. This Act is repealed on January
2 1, 2010.
3 Section 90. The Illinois Income Tax Act is amended by
4 changing Section 203 as follows:
5 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
6 Sec. 203. Base income defined.
7 (a) Individuals.
8 (1) In general. In the case of an individual, base
9 income means an amount equal to the taxpayer's adjusted
10 gross income for the taxable year as modified by
11 paragraph (2).
12 (2) Modifications. The adjusted gross income
13 referred to in paragraph (1) shall be modified by adding
14 thereto the sum of the following amounts:
15 (A) An amount equal to all amounts paid or
16 accrued to the taxpayer as interest or dividends
17 during the taxable year to the extent excluded from
18 gross income in the computation of adjusted gross
19 income, except stock dividends of qualified public
20 utilities described in Section 305(e) of the
21 Internal Revenue Code;
22 (B) An amount equal to the amount of tax
23 imposed by this Act to the extent deducted from
24 gross income in the computation of adjusted gross
25 income for the taxable year;
26 (C) An amount equal to the amount received
27 during the taxable year as a recovery or refund of
28 real property taxes paid with respect to the
29 taxpayer's principal residence under the Revenue Act
30 of 1939 and for which a deduction was previously
31 taken under subparagraph (L) of this paragraph (2)
32 prior to July 1, 1991, the retrospective application
-9- LRB9107003WHdvam01
1 date of Article 4 of Public Act 87-17. In the case
2 of multi-unit or multi-use structures and farm
3 dwellings, the taxes on the taxpayer's principal
4 residence shall be that portion of the total taxes
5 for the entire property which is attributable to
6 such principal residence;
7 (D) An amount equal to the amount of the
8 capital gain deduction allowable under the Internal
9 Revenue Code, to the extent deducted from gross
10 income in the computation of 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
15 on the account in the taxable year of a withdrawal
16 pursuant to subsection (b) of Section 20 of the
17 Medical Care Savings Account Act or subsection (b)
18 of Section 20 of the Medical Care Savings Account
19 Act of 2000; and
20 (D-10) For taxable years ending after December
21 31, 1997, an amount equal to any eligible
22 remediation costs that the individual deducted in
23 computing adjusted gross income and for which the
24 individual claims a credit under subsection (l) of
25 Section 201;
26 and by deducting from the total so obtained the sum of
27 the following amounts:
28 (E) Any amount included in such total in
29 respect of any compensation (including but not
30 limited to any compensation paid or accrued to a
31 serviceman while a prisoner of war or missing in
32 action) paid to a resident by reason of being on
33 active duty in the Armed Forces of the United States
34 and in respect of any compensation paid or accrued
-10- LRB9107003WHdvam01
1 to a resident who as a governmental employee was a
2 prisoner of war or missing in action, and in respect
3 of any compensation paid to a resident in 1971 or
4 thereafter for annual training performed pursuant to
5 Sections 502 and 503, Title 32, United States Code
6 as a member of the Illinois National Guard;
7 (F) An amount equal to all amounts included in
8 such total pursuant to the provisions of Sections
9 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
10 408 of the Internal Revenue Code, or included in
11 such total as distributions under the provisions of
12 any retirement or disability plan for employees of
13 any governmental agency or unit, or retirement
14 payments to retired partners, which payments are
15 excluded in computing net earnings from self
16 employment by Section 1402 of the Internal Revenue
17 Code and regulations adopted pursuant thereto;
18 (G) The valuation limitation amount;
19 (H) An amount equal to the amount of any tax
20 imposed by this Act which was refunded to the
21 taxpayer and included in such total for the taxable
22 year;
23 (I) An amount equal to all amounts included in
24 such total pursuant to the provisions of Section 111
25 of the Internal Revenue Code as a recovery of items
26 previously deducted from adjusted gross income in
27 the computation of taxable income;
28 (J) An amount equal to those dividends
29 included in such total which were paid by a
30 corporation which conducts business operations in an
31 Enterprise Zone or zones created under the Illinois
32 Enterprise Zone Act, and conducts substantially all
33 of its operations in an Enterprise Zone or zones;
34 (K) An amount equal to those dividends
-11- LRB9107003WHdvam01
1 included in such total that were paid by a
2 corporation that conducts business operations in a
3 federally designated Foreign Trade Zone or Sub-Zone
4 and that is designated a High Impact Business
5 located in Illinois; provided that dividends
6 eligible for the deduction provided in subparagraph
7 (J) of paragraph (2) of this subsection shall not be
8 eligible for the deduction provided under this
9 subparagraph (K);
10 (L) For taxable years ending after December
11 31, 1983, an amount equal to all social security
12 benefits and railroad retirement benefits included
13 in such total pursuant to Sections 72(r) and 86 of
14 the Internal Revenue Code;
15 (M) With the exception of any amounts
16 subtracted under subparagraph (N), an amount equal
17 to the sum of all amounts disallowed as deductions
18 by (i) Sections 171(a) (2), and 265(2) of the
19 Internal Revenue Code of 1954, as now or hereafter
20 amended, and all amounts of expenses allocable to
21 interest and disallowed as deductions by Section
22 265(1) of the Internal Revenue Code of 1954, as now
23 or hereafter amended; and (ii) for taxable years
24 ending on or after August 13, 1999 the effective
25 date of this amendatory Act of the 91st General
26 Assembly, Sections 171(a)(2), 265, 280C, and
27 832(b)(5)(B)(i) of the Internal Revenue Code; the
28 provisions of this subparagraph are exempt from the
29 provisions of Section 250;
30 (N) An amount equal to all amounts included in
31 such total which are exempt from taxation by this
32 State either by reason of its statutes or
33 Constitution or by reason of the Constitution,
34 treaties or statutes of the United States; provided
-12- LRB9107003WHdvam01
1 that, in the case of any statute of this State that
2 exempts income derived from bonds or other
3 obligations from the tax imposed under this Act, the
4 amount exempted shall be the interest net of bond
5 premium amortization;
6 (O) An amount equal to any contribution made
7 to a job training project established pursuant to
8 the Tax Increment Allocation Redevelopment Act;
9 (P) An amount equal to the amount of the
10 deduction used to compute the federal income tax
11 credit for restoration of substantial amounts held
12 under claim of right for the taxable year pursuant
13 to Section 1341 of the Internal Revenue Code of
14 1986;
15 (Q) An amount equal to any amounts included in
16 such total, received by the taxpayer as an
17 acceleration in the payment of life, endowment or
18 annuity benefits in advance of the time they would
19 otherwise be payable as an indemnity for a terminal
20 illness;
21 (R) An amount equal to the amount of any
22 federal or State bonus paid to veterans of the
23 Persian Gulf War;
24 (S) An amount, to the extent included in
25 adjusted gross income, equal to the amount of a
26 contribution made in the taxable year on behalf of
27 the taxpayer to a medical care savings account
28 established under the Medical Care Savings Account
29 Act or the Medical Care Savings Account Act of 2000
30 to the extent the contribution is accepted by the
31 account administrator as provided in that Act;
32 (T) An amount, to the extent included in
33 adjusted gross income, equal to the amount of
34 interest earned in the taxable year on a medical
-13- LRB9107003WHdvam01
1 care savings account established under the Medical
2 Care Savings Account Act or the Medical Care Savings
3 Account Act of 2000 on behalf of the taxpayer, other
4 than interest added pursuant to item (D-5) of this
5 paragraph (2);
6 (U) For one taxable year beginning on or after
7 January 1, 1994, an amount equal to the total amount
8 of tax imposed and paid under subsections (a) and
9 (b) of Section 201 of this Act on grant amounts
10 received by the taxpayer under the Nursing Home
11 Grant Assistance Act during the taxpayer's taxable
12 years 1992 and 1993;
13 (V) Beginning with tax years ending on or
14 after December 31, 1995 and ending with tax years
15 ending on or before December 31, 2004, an amount
16 equal to the amount paid by a taxpayer who is a
17 self-employed taxpayer, a partner of a partnership,
18 or a shareholder in a Subchapter S corporation for
19 health insurance or long-term care insurance for
20 that taxpayer or that taxpayer's spouse or
21 dependents, to the extent that the amount paid for
22 that health insurance or long-term care insurance
23 may be deducted under Section 213 of the Internal
24 Revenue Code of 1986, has not been deducted on the
25 federal income tax return of the taxpayer, and does
26 not exceed the taxable income attributable to that
27 taxpayer's income, self-employment income, or
28 Subchapter S corporation income; except that no
29 deduction shall be allowed under this item (V) if
30 the taxpayer is eligible to participate in any
31 health insurance or long-term care insurance plan of
32 an employer of the taxpayer or the taxpayer's
33 spouse. The amount of the health insurance and
34 long-term care insurance subtracted under this item
-14- LRB9107003WHdvam01
1 (V) shall be determined by multiplying total health
2 insurance and long-term care insurance premiums paid
3 by the taxpayer times a number that represents the
4 fractional percentage of eligible medical expenses
5 under Section 213 of the Internal Revenue Code of
6 1986 not actually deducted on the taxpayer's federal
7 income tax return;
8 (W) For taxable years beginning on or after
9 January 1, 1998, all amounts included in the
10 taxpayer's federal gross income in the taxable year
11 from amounts converted from a regular IRA to a Roth
12 IRA. This paragraph is exempt from the provisions of
13 Section 250; and
14 (X) For taxable year 1999 and thereafter, an
15 amount equal to the amount of any (i) distributions,
16 to the extent includible in gross income for federal
17 income tax purposes, made to the taxpayer because of
18 his or her status as a victim of persecution for
19 racial or religious reasons by Nazi Germany or any
20 other Axis regime or as an heir of the victim and
21 (ii) items of income, to the extent includible in
22 gross income for federal income tax purposes,
23 attributable to, derived from or in any way related
24 to assets stolen from, hidden from, or otherwise
25 lost to a victim of persecution for racial or
26 religious reasons by Nazi Germany or any other Axis
27 regime immediately prior to, during, and immediately
28 after World War II, including, but not limited to,
29 interest on the proceeds receivable as insurance
30 under policies issued to a victim of persecution for
31 racial or religious reasons by Nazi Germany or any
32 other Axis regime by European insurance companies
33 immediately prior to and during World War II;
34 provided, however, this subtraction from federal
-15- LRB9107003WHdvam01
1 adjusted gross income does not apply to assets
2 acquired with such assets or with the proceeds from
3 the sale of such assets; provided, further, this
4 paragraph shall only apply to a taxpayer who was the
5 first recipient of such assets after their recovery
6 and who is a victim of persecution for racial or
7 religious reasons by Nazi Germany or any other Axis
8 regime or as an heir of the victim. The amount of
9 and the eligibility for any public assistance,
10 benefit, or similar entitlement is not affected by
11 the inclusion of items (i) and (ii) of this
12 paragraph in gross income for federal income tax
13 purposes. This paragraph is exempt from the
14 provisions of Section 250.
15 (b) Corporations.
16 (1) In general. In the case of a corporation, base
17 income means an amount equal to the taxpayer's taxable
18 income for the taxable year as modified by paragraph (2).
19 (2) Modifications. The taxable income referred to
20 in paragraph (1) shall be modified by adding thereto the
21 sum of the following amounts:
22 (A) An amount equal to all amounts paid or
23 accrued to the taxpayer as interest and all
24 distributions received from regulated investment
25 companies during the taxable year to the extent
26 excluded from gross income in the computation of
27 taxable income;
28 (B) An amount equal to the amount of tax
29 imposed by this Act to the extent deducted from
30 gross income in the computation of taxable income
31 for the taxable year;
32 (C) In the case of a regulated investment
33 company, an amount equal to the excess of (i) the
34 net long-term capital gain for the taxable year,
-16- LRB9107003WHdvam01
1 over (ii) the amount of the capital gain dividends
2 designated as such in accordance with Section
3 852(b)(3)(C) of the Internal Revenue Code and any
4 amount designated under Section 852(b)(3)(D) of the
5 Internal Revenue Code, attributable to the taxable
6 year (this amendatory Act of 1995 (Public Act 89-89)
7 is declarative of existing law and is not a new
8 enactment);
9 (D) The amount of any net operating loss
10 deduction taken in arriving at taxable income, other
11 than a net operating loss carried forward from a
12 taxable year ending prior to December 31, 1986;
13 (E) For taxable years in which a net operating
14 loss carryback or carryforward from a taxable year
15 ending prior to December 31, 1986 is an element of
16 taxable income under paragraph (1) of subsection (e)
17 or subparagraph (E) of paragraph (2) of subsection
18 (e), the amount by which addition modifications
19 other than those provided by this subparagraph (E)
20 exceeded subtraction modifications in such earlier
21 taxable year, with the following limitations applied
22 in the order that they are listed:
23 (i) the addition modification relating to
24 the net operating loss carried back or forward
25 to the taxable year from any taxable year
26 ending prior to December 31, 1986 shall be
27 reduced by the amount of addition modification
28 under this subparagraph (E) which related to
29 that net operating loss and which was taken
30 into account in calculating the base income of
31 an earlier taxable year, and
32 (ii) the addition modification relating
33 to the net operating loss carried back or
34 forward to the taxable year from any taxable
-17- LRB9107003WHdvam01
1 year ending prior to December 31, 1986 shall
2 not exceed the amount of such carryback or
3 carryforward;
4 For taxable years in which there is a net
5 operating loss carryback or carryforward from more
6 than one other taxable year ending prior to December
7 31, 1986, the addition modification provided in this
8 subparagraph (E) shall be the sum of the amounts
9 computed independently under the preceding
10 provisions of this subparagraph (E) for each such
11 taxable year; and
12 (E-5) For taxable years ending after December
13 31, 1997, an amount equal to any eligible
14 remediation costs that the corporation deducted in
15 computing adjusted gross income and for which the
16 corporation claims a credit under subsection (l) of
17 Section 201;
18 and by deducting from the total so obtained the sum of
19 the following amounts:
20 (F) An amount equal to the amount of any tax
21 imposed by this Act which was refunded to the
22 taxpayer and included in such total for the taxable
23 year;
24 (G) An amount equal to any amount included in
25 such total under Section 78 of the Internal Revenue
26 Code;
27 (H) In the case of a regulated investment
28 company, an amount equal to the amount of exempt
29 interest dividends as defined in subsection (b) (5)
30 of Section 852 of the Internal Revenue Code, paid to
31 shareholders for the taxable year;
32 (I) With the exception of any amounts
33 subtracted under subparagraph (J), an amount equal
34 to the sum of all amounts disallowed as deductions
-18- LRB9107003WHdvam01
1 by (i) Sections 171(a) (2), and 265(a)(2) and
2 amounts disallowed as interest expense by Section
3 291(a)(3) of the Internal Revenue Code, as now or
4 hereafter amended, and all amounts of expenses
5 allocable to interest and disallowed as deductions
6 by Section 265(a)(1) of the Internal Revenue Code,
7 as now or hereafter amended; and (ii) for taxable
8 years ending on or after August 13, 1999 the
9 effective date of this amendatory Act of the 91st
10 General Assembly, Sections 171(a)(2), 265, 280C, and
11 832(b)(5)(B)(i) of the Internal Revenue Code; the
12 provisions of this subparagraph are exempt from the
13 provisions of Section 250;
14 (J) An amount equal to all amounts included in
15 such total which are exempt from taxation by this
16 State either by reason of its statutes or
17 Constitution or by reason of the Constitution,
18 treaties or statutes of the United States; provided
19 that, in the case of any statute of this State that
20 exempts income derived from bonds or other
21 obligations from the tax imposed under this Act, the
22 amount exempted shall be the interest net of bond
23 premium amortization;
24 (K) An amount equal to those dividends
25 included in such total which were paid by a
26 corporation which conducts business operations in an
27 Enterprise Zone or zones created under the Illinois
28 Enterprise Zone Act and conducts substantially all
29 of its operations in an Enterprise Zone or zones;
30 (L) An amount equal to those dividends
31 included in such total that were paid by a
32 corporation that conducts business operations in a
33 federally designated Foreign Trade Zone or Sub-Zone
34 and that is designated a High Impact Business
-19- LRB9107003WHdvam01
1 located in Illinois; provided that dividends
2 eligible for the deduction provided in subparagraph
3 (K) of paragraph 2 of this subsection shall not be
4 eligible for the deduction provided under this
5 subparagraph (L);
6 (M) 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
9 interest income from a loan or loans made by such
10 taxpayer to a borrower, to the extent that such a
11 loan is secured by property which is eligible for
12 the Enterprise Zone Investment Credit. To determine
13 the portion of a loan or loans that is secured by
14 property eligible for a Section 201(h) investment
15 credit to the borrower, the entire principal amount
16 of the loan or loans between the taxpayer and the
17 borrower should be divided into the basis of the
18 Section 201(h) investment credit property which
19 secures the loan or loans, using for this purpose
20 the original basis of such property on the date that
21 it was placed in service in the Enterprise Zone.
22 The subtraction modification available to taxpayer
23 in any year under this subsection shall be that
24 portion of the total interest paid by the borrower
25 with respect to such loan attributable to the
26 eligible property as calculated under the previous
27 sentence;
28 (M-1) For any taxpayer that is a financial
29 organization within the meaning of Section 304(c) of
30 this Act, an amount included in such total as
31 interest income from a loan or loans made by such
32 taxpayer to a borrower, to the extent that such a
33 loan is secured by property which is eligible for
34 the High Impact Business Investment Credit. To
-20- LRB9107003WHdvam01
1 determine the portion of a loan or loans that is
2 secured by property eligible for a Section 201(i)
3 investment credit to the borrower, the entire
4 principal amount of the loan or loans between the
5 taxpayer and the borrower should be divided into the
6 basis of the Section 201(i) investment credit
7 property which secures the loan or loans, using for
8 this purpose the original basis of such property on
9 the date that it was placed in service in a
10 federally designated Foreign Trade Zone or Sub-Zone
11 located in Illinois. No taxpayer that is eligible
12 for the deduction provided in subparagraph (M) of
13 paragraph (2) of this subsection shall be eligible
14 for the deduction provided under this subparagraph
15 (M-1). The subtraction modification available to
16 taxpayers in any year under this subsection shall be
17 that portion of the total interest paid by the
18 borrower with respect to such loan attributable to
19 the eligible property as calculated under the
20 previous sentence;
21 (N) Two times any contribution made during the
22 taxable year to a designated zone organization to
23 the extent that the contribution (i) qualifies as a
24 charitable contribution under subsection (c) of
25 Section 170 of the Internal Revenue Code and (ii)
26 must, by its terms, be used for a project approved
27 by the Department of Commerce and Community Affairs
28 under Section 11 of the Illinois Enterprise Zone
29 Act;
30 (O) An amount equal to: (i) 85% for taxable
31 years ending on or before December 31, 1992, or, a
32 percentage equal to the percentage allowable under
33 Section 243(a)(1) of the Internal Revenue Code of
34 1986 for taxable years ending after December 31,
-21- LRB9107003WHdvam01
1 1992, of the amount by which dividends included in
2 taxable income and received from a corporation that
3 is not created or organized under the laws of the
4 United States or any state or political subdivision
5 thereof, including, for taxable years ending on or
6 after December 31, 1988, dividends received or
7 deemed received or paid or deemed paid under
8 Sections 951 through 964 of the Internal Revenue
9 Code, exceed the amount of the modification provided
10 under subparagraph (G) of paragraph (2) of this
11 subsection (b) which is related to such dividends;
12 plus (ii) 100% of the amount by which dividends,
13 included in taxable income and received, including,
14 for taxable years ending on or after December 31,
15 1988, dividends received or deemed received or paid
16 or deemed paid under Sections 951 through 964 of the
17 Internal Revenue Code, from any such corporation
18 specified in clause (i) that would but for the
19 provisions of Section 1504 (b) (3) of the Internal
20 Revenue Code be treated as a member of the
21 affiliated group which includes the dividend
22 recipient, exceed the amount of the modification
23 provided under subparagraph (G) of paragraph (2) of
24 this subsection (b) which is related to such
25 dividends;
26 (P) An amount equal to any contribution made
27 to a job training project established pursuant to
28 the Tax Increment Allocation Redevelopment Act;
29 (Q) An amount equal to the amount of the
30 deduction used to compute the federal income tax
31 credit for restoration of substantial amounts held
32 under claim of right for the taxable year pursuant
33 to Section 1341 of the Internal Revenue Code of
34 1986; and
-22- LRB9107003WHdvam01
1 (R) In the case of an attorney-in-fact with
2 respect to whom an interinsurer or a reciprocal
3 insurer has made the election under Section 835 of
4 the Internal Revenue Code, 26 U.S.C. 835, an amount
5 equal to the excess, if any, of the amounts paid or
6 incurred by that interinsurer or reciprocal insurer
7 in the taxable year to the attorney-in-fact over the
8 deduction allowed to that interinsurer or reciprocal
9 insurer with respect to the attorney-in-fact under
10 Section 835(b) of the Internal Revenue Code for the
11 taxable year.
12 (3) Special rule. For purposes of paragraph (2)
13 (A), "gross income" in the case of a life insurance
14 company, for tax years ending on and after December 31,
15 1994, shall mean the gross investment income for the
16 taxable year.
17 (c) Trusts and estates.
18 (1) In general. In the case of a trust or estate,
19 base income means an amount equal to the taxpayer's
20 taxable income for the taxable year as modified by
21 paragraph (2).
22 (2) Modifications. Subject to the provisions of
23 paragraph (3), the taxable income referred to in
24 paragraph (1) shall be modified by adding thereto the sum
25 of the following amounts:
26 (A) An amount equal to all amounts paid or
27 accrued to the taxpayer as interest or dividends
28 during the taxable year to the extent excluded from
29 gross income in the computation of taxable income;
30 (B) In the case of (i) an estate, $600; (ii) a
31 trust which, under its governing instrument, is
32 required to distribute all of its income currently,
33 $300; and (iii) any other trust, $100, but in each
34 such case, only to the extent such amount was
-23- LRB9107003WHdvam01
1 deducted in the computation of taxable income;
2 (C) An amount equal to the amount of tax
3 imposed by this Act to the extent deducted from
4 gross income in the computation of taxable income
5 for the taxable year;
6 (D) The amount of any net operating loss
7 deduction taken in arriving at taxable income, other
8 than a net operating loss carried forward from a
9 taxable year ending prior to December 31, 1986;
10 (E) For taxable years in which a net operating
11 loss carryback or carryforward from a taxable year
12 ending prior to December 31, 1986 is an element of
13 taxable income under paragraph (1) of subsection (e)
14 or subparagraph (E) of paragraph (2) of subsection
15 (e), the amount by which addition modifications
16 other than those provided by this subparagraph (E)
17 exceeded subtraction modifications in such taxable
18 year, with the following limitations applied in the
19 order that they are listed:
20 (i) the addition modification relating to
21 the net operating loss carried back or forward
22 to the taxable year from any taxable year
23 ending prior to December 31, 1986 shall be
24 reduced by the amount of addition modification
25 under this subparagraph (E) which related to
26 that net operating loss and which was taken
27 into account in calculating the base income of
28 an earlier taxable year, and
29 (ii) the addition modification relating
30 to the net operating loss carried back or
31 forward to the taxable year from any taxable
32 year ending prior to December 31, 1986 shall
33 not exceed the amount of such carryback or
34 carryforward;
-24- LRB9107003WHdvam01
1 For taxable years in which there is a net
2 operating loss carryback or carryforward from more
3 than one other taxable year ending prior to December
4 31, 1986, the addition modification provided in this
5 subparagraph (E) shall be the sum of the amounts
6 computed independently under the preceding
7 provisions of this subparagraph (E) for each such
8 taxable year;
9 (F) For taxable years ending on or after
10 January 1, 1989, an amount equal to the tax deducted
11 pursuant to Section 164 of the Internal Revenue Code
12 if the trust or estate is claiming the same tax for
13 purposes of the Illinois foreign tax credit under
14 Section 601 of this Act;
15 (G) An amount equal to the amount of the
16 capital gain deduction allowable under the Internal
17 Revenue Code, to the extent deducted from gross
18 income in the computation of taxable income; and
19 (G-5) For taxable years ending after December
20 31, 1997, an amount equal to any eligible
21 remediation costs that the trust or estate deducted
22 in computing adjusted gross income and for which the
23 trust or estate claims a credit under subsection (l)
24 of Section 201;
25 and by deducting from the total so obtained the sum of
26 the following amounts:
27 (H) An amount equal to all amounts included in
28 such total pursuant to the provisions of Sections
29 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and
30 408 of the Internal Revenue Code or included in such
31 total as distributions under the provisions of any
32 retirement or disability plan for employees of any
33 governmental agency or unit, or retirement payments
34 to retired partners, which payments are excluded in
-25- LRB9107003WHdvam01
1 computing net earnings from self employment by
2 Section 1402 of the Internal Revenue Code and
3 regulations adopted pursuant thereto;
4 (I) The valuation limitation amount;
5 (J) An amount equal to the amount of any tax
6 imposed by this Act which was refunded to the
7 taxpayer and included in such total for the taxable
8 year;
9 (K) An amount equal to all amounts included in
10 taxable income as modified by subparagraphs (A),
11 (B), (C), (D), (E), (F) and (G) which are exempt
12 from taxation by this State either by reason of its
13 statutes or Constitution or by reason of the
14 Constitution, treaties or statutes of the United
15 States; provided that, in the case of any statute of
16 this State that exempts income derived from bonds or
17 other obligations from the tax imposed under this
18 Act, the amount exempted shall be the interest net
19 of bond premium amortization;
20 (L) With the exception of any amounts
21 subtracted under subparagraph (K), an amount equal
22 to the sum of all amounts disallowed as deductions
23 by (i) Sections 171(a) (2) and 265(a)(2) of the
24 Internal Revenue Code, as now or hereafter amended,
25 and all amounts of expenses allocable to interest
26 and disallowed as deductions by Section 265(1) of
27 the Internal Revenue Code of 1954, as now or
28 hereafter amended; and (ii) for taxable years ending
29 on or after August 13, 1999 the effective date of
30 this amendatory Act of the 91st General Assembly,
31 Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i)
32 of the Internal Revenue Code; the provisions of this
33 subparagraph are exempt from the provisions of
34 Section 250;
-26- LRB9107003WHdvam01
1 (M) An amount equal to those dividends
2 included in such total which were paid by a
3 corporation which conducts business operations in an
4 Enterprise Zone or zones created under the Illinois
5 Enterprise Zone Act and conducts substantially all
6 of its operations in an Enterprise Zone or Zones;
7 (N) An amount equal to any contribution made
8 to a job training project established pursuant to
9 the Tax Increment Allocation Redevelopment Act;
10 (O) An amount equal to those dividends
11 included in such total that were paid by a
12 corporation that conducts business operations in a
13 federally designated Foreign Trade Zone or Sub-Zone
14 and that is designated a High Impact Business
15 located in Illinois; provided that dividends
16 eligible for the deduction provided in subparagraph
17 (M) of paragraph (2) of this subsection shall not be
18 eligible for the deduction provided under this
19 subparagraph (O);
20 (P) An amount equal to the amount of the
21 deduction used to compute the federal income tax
22 credit for restoration of substantial amounts held
23 under claim of right for the taxable year pursuant
24 to Section 1341 of the Internal Revenue Code of
25 1986; and
26 (Q) For taxable year 1999 and thereafter, an
27 amount equal to the amount of any (i) distributions,
28 to the extent includible in gross income for federal
29 income tax purposes, made to the taxpayer because of
30 his or her status as a victim of persecution for
31 racial or religious reasons by Nazi Germany or any
32 other Axis regime or as an heir of the victim and
33 (ii) items of income, to the extent includible in
34 gross income for federal income tax purposes,
-27- LRB9107003WHdvam01
1 attributable to, derived from or in any way related
2 to assets stolen from, hidden from, or otherwise
3 lost to a victim of persecution for racial or
4 religious reasons by Nazi Germany or any other Axis
5 regime immediately prior to, during, and immediately
6 after World War II, including, but not limited to,
7 interest on the proceeds receivable as insurance
8 under policies issued to a victim of persecution for
9 racial or religious reasons by Nazi Germany or any
10 other Axis regime by European insurance companies
11 immediately prior to and during World War II;
12 provided, however, this subtraction from federal
13 adjusted gross income does not apply to assets
14 acquired with such assets or with the proceeds from
15 the sale of such assets; provided, further, this
16 paragraph shall only apply to a taxpayer who was the
17 first recipient of such assets after their recovery
18 and who is a victim of persecution for racial or
19 religious reasons by Nazi Germany or any other Axis
20 regime or as an heir of the victim. The amount of
21 and the eligibility for any public assistance,
22 benefit, or similar entitlement is not affected by
23 the inclusion of items (i) and (ii) of this
24 paragraph in gross income for federal income tax
25 purposes. This paragraph is exempt from the
26 provisions of Section 250.
27 (3) Limitation. The amount of any modification
28 otherwise required under this subsection shall, under
29 regulations prescribed by the Department, be adjusted by
30 any amounts included therein which were properly paid,
31 credited, or required to be distributed, or permanently
32 set aside for charitable purposes pursuant to Internal
33 Revenue Code Section 642(c) during the taxable year.
34 (d) Partnerships.
-28- LRB9107003WHdvam01
1 (1) In general. In the case of a partnership, base
2 income means an amount equal to the taxpayer's taxable
3 income for the taxable year as modified by paragraph (2).
4 (2) Modifications. The taxable income referred to
5 in paragraph (1) shall be modified by adding thereto the
6 sum of the following amounts:
7 (A) An amount equal to all amounts paid or
8 accrued to the taxpayer as interest or dividends
9 during the taxable year to the extent excluded from
10 gross income in the computation of taxable income;
11 (B) An amount equal to the amount of tax
12 imposed by this Act to the extent deducted from
13 gross income for the taxable year;
14 (C) The amount of deductions allowed to the
15 partnership pursuant to Section 707 (c) of the
16 Internal Revenue Code in calculating its taxable
17 income; and
18 (D) An amount equal to the amount of the
19 capital gain deduction allowable under the Internal
20 Revenue Code, to the extent deducted from gross
21 income in the computation of taxable income;
22 and by deducting from the total so obtained the following
23 amounts:
24 (E) The valuation limitation amount;
25 (F) An amount equal to the amount of any tax
26 imposed by this Act which was refunded to the
27 taxpayer and included in such total for the taxable
28 year;
29 (G) An amount equal to all amounts included in
30 taxable income as modified by subparagraphs (A),
31 (B), (C) and (D) which are exempt from taxation by
32 this State either by reason of its statutes or
33 Constitution or by reason of the Constitution,
34 treaties or statutes of the United States; provided
-29- LRB9107003WHdvam01
1 that, in the case of any statute of this State that
2 exempts income derived from bonds or other
3 obligations from the tax imposed under this Act, the
4 amount exempted shall be the interest net of bond
5 premium amortization;
6 (H) Any income of the partnership which
7 constitutes personal service income as defined in
8 Section 1348 (b) (1) of the Internal Revenue Code
9 (as in effect December 31, 1981) or a reasonable
10 allowance for compensation paid or accrued for
11 services rendered by partners to the partnership,
12 whichever is greater;
13 (I) An amount equal to all amounts of income
14 distributable to an entity subject to the Personal
15 Property Tax Replacement Income Tax imposed by
16 subsections (c) and (d) of Section 201 of this Act
17 including amounts distributable to organizations
18 exempt from federal income tax by reason of Section
19 501(a) of the Internal Revenue Code;
20 (J) With the exception of any amounts
21 subtracted under subparagraph (G), an amount equal
22 to the sum of all amounts disallowed as deductions
23 by (i) Sections 171(a) (2), and 265(2) of the
24 Internal Revenue Code of 1954, as now or hereafter
25 amended, and all amounts of expenses allocable to
26 interest and disallowed as deductions by Section
27 265(1) of the Internal Revenue Code, as now or
28 hereafter amended; and (ii) for taxable years ending
29 on or after August 13, 1999 the effective date of
30 this amendatory Act of the 91st General Assembly,
31 Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i)
32 of the Internal Revenue Code; the provisions of this
33 subparagraph are exempt from the provisions of
34 Section 250;
-30- LRB9107003WHdvam01
1 (K) An amount equal to those dividends
2 included in such total which were paid by a
3 corporation which conducts business operations in an
4 Enterprise Zone or zones created under the Illinois
5 Enterprise Zone Act, enacted by the 82nd General
6 Assembly, and which does not conduct such operations
7 other than in an Enterprise Zone or Zones;
8 (L) An amount equal to any contribution made
9 to a job training project established pursuant to
10 the Real Property Tax Increment Allocation
11 Redevelopment Act;
12 (M) An amount equal to those dividends
13 included in such total that were paid by a
14 corporation that conducts business operations in a
15 federally designated Foreign Trade Zone or Sub-Zone
16 and that is designated a High Impact Business
17 located in Illinois; provided that dividends
18 eligible for the deduction provided in subparagraph
19 (K) of paragraph (2) of this subsection shall not be
20 eligible for the deduction provided under this
21 subparagraph (M); and
22 (N) An amount equal to the amount of the
23 deduction used to compute the federal income tax
24 credit for restoration of substantial amounts held
25 under claim of right for the taxable year pursuant
26 to Section 1341 of the Internal Revenue Code of
27 1986.
28 (e) Gross income; adjusted gross income; taxable income.
29 (1) In general. Subject to the provisions of
30 paragraph (2) and subsection (b) (3), for purposes of
31 this Section and Section 803(e), a taxpayer's gross
32 income, adjusted gross income, or taxable income for the
33 taxable year shall mean the amount of gross income,
34 adjusted gross income or taxable income properly
-31- LRB9107003WHdvam01
1 reportable for federal income tax purposes for the
2 taxable year under the provisions of the Internal Revenue
3 Code. Taxable income may be less than zero. However, for
4 taxable years ending on or after December 31, 1986, net
5 operating loss carryforwards from taxable years ending
6 prior to December 31, 1986, may not exceed the sum of
7 federal taxable income for the taxable year before net
8 operating loss deduction, plus the excess of addition
9 modifications over subtraction modifications for the
10 taxable year. For taxable years ending prior to December
11 31, 1986, taxable income may never be an amount in excess
12 of the net operating loss for the taxable year as defined
13 in subsections (c) and (d) of Section 172 of the Internal
14 Revenue Code, provided that when taxable income of a
15 corporation (other than a Subchapter S corporation),
16 trust, or estate is less than zero and addition
17 modifications, other than those provided by subparagraph
18 (E) of paragraph (2) of subsection (b) for corporations
19 or subparagraph (E) of paragraph (2) of subsection (c)
20 for trusts and estates, exceed subtraction modifications,
21 an addition modification must be made under those
22 subparagraphs for any other taxable year to which the
23 taxable income less than zero (net operating loss) is
24 applied under Section 172 of the Internal Revenue Code or
25 under subparagraph (E) of paragraph (2) of this
26 subsection (e) applied in conjunction with Section 172 of
27 the Internal Revenue Code.
28 (2) Special rule. For purposes of paragraph (1) of
29 this subsection, the taxable income properly reportable
30 for federal income tax purposes shall mean:
31 (A) Certain life insurance companies. In the
32 case of a life insurance company subject to the tax
33 imposed by Section 801 of the Internal Revenue Code,
34 life insurance company taxable income, plus the
-32- LRB9107003WHdvam01
1 amount of distribution from pre-1984 policyholder
2 surplus accounts as calculated under Section 815a of
3 the Internal Revenue Code;
4 (B) Certain other insurance companies. In the
5 case of mutual insurance companies subject to the
6 tax imposed by Section 831 of the Internal Revenue
7 Code, insurance company taxable income;
8 (C) Regulated investment companies. In the
9 case of a regulated investment company subject to
10 the tax imposed by Section 852 of the Internal
11 Revenue Code, investment company taxable income;
12 (D) Real estate investment trusts. In the
13 case of a real estate investment trust subject to
14 the tax imposed by Section 857 of the Internal
15 Revenue Code, real estate investment trust taxable
16 income;
17 (E) Consolidated corporations. In the case of
18 a corporation which is a member of an affiliated
19 group of corporations filing a consolidated income
20 tax return for the taxable year for federal income
21 tax purposes, taxable income determined as if such
22 corporation had filed a separate return for federal
23 income tax purposes for the taxable year and each
24 preceding taxable year for which it was a member of
25 an affiliated group. For purposes of this
26 subparagraph, the taxpayer's separate taxable income
27 shall be determined as if the election provided by
28 Section 243(b) (2) of the Internal Revenue Code had
29 been in effect for all such years;
30 (F) Cooperatives. In the case of a
31 cooperative corporation or association, the taxable
32 income of such organization determined in accordance
33 with the provisions of Section 1381 through 1388 of
34 the Internal Revenue Code;
-33- LRB9107003WHdvam01
1 (G) Subchapter S corporations. In the case
2 of: (i) a Subchapter S corporation for which there
3 is in effect an election for the taxable year under
4 Section 1362 of the Internal Revenue Code, the
5 taxable income of such corporation determined in
6 accordance with Section 1363(b) of the Internal
7 Revenue Code, except that taxable income shall take
8 into account those items which are required by
9 Section 1363(b)(1) of the Internal Revenue Code to
10 be separately stated; and (ii) a Subchapter S
11 corporation for which there is in effect a federal
12 election to opt out of the provisions of the
13 Subchapter S Revision Act of 1982 and have applied
14 instead the prior federal Subchapter S rules as in
15 effect on July 1, 1982, the taxable income of such
16 corporation determined in accordance with the
17 federal Subchapter S rules as in effect on July 1,
18 1982; and
19 (H) Partnerships. In the case of a
20 partnership, taxable income determined in accordance
21 with Section 703 of the Internal Revenue Code,
22 except that taxable income shall take into account
23 those items which are required by Section 703(a)(1)
24 to be separately stated but which would be taken
25 into account by an individual in calculating his
26 taxable income.
27 (f) Valuation limitation amount.
28 (1) In general. The valuation limitation amount
29 referred to in subsections (a) (2) (G), (c) (2) (I) and
30 (d)(2) (E) is an amount equal to:
31 (A) The sum of the pre-August 1, 1969
32 appreciation amounts (to the extent consisting of
33 gain reportable under the provisions of Section 1245
34 or 1250 of the Internal Revenue Code) for all
-34- LRB9107003WHdvam01
1 property in respect of which such gain was reported
2 for the taxable year; plus
3 (B) The lesser of (i) the sum of the
4 pre-August 1, 1969 appreciation amounts (to the
5 extent consisting of capital gain) for all property
6 in respect of which such gain was reported for
7 federal income tax purposes for the taxable year, or
8 (ii) the net capital gain for the taxable year,
9 reduced in either case by any amount of such gain
10 included in the amount determined under subsection
11 (a) (2) (F) or (c) (2) (H).
12 (2) Pre-August 1, 1969 appreciation amount.
13 (A) If the fair market value of property
14 referred to in paragraph (1) was readily
15 ascertainable on August 1, 1969, the pre-August 1,
16 1969 appreciation amount for such property is the
17 lesser of (i) the excess of such fair market value
18 over the taxpayer's basis (for determining gain) for
19 such property on that date (determined under the
20 Internal Revenue Code as in effect on that date), or
21 (ii) the total gain realized and reportable for
22 federal income tax purposes in respect of the sale,
23 exchange or other disposition of such property.
24 (B) If the fair market value of property
25 referred to in paragraph (1) was not readily
26 ascertainable on August 1, 1969, the pre-August 1,
27 1969 appreciation amount for such property is that
28 amount which bears the same ratio to the total gain
29 reported in respect of the property for federal
30 income tax purposes for the taxable year, as the
31 number of full calendar months in that part of the
32 taxpayer's holding period for the property ending
33 July 31, 1969 bears to the number of full calendar
34 months in the taxpayer's entire holding period for
-35- LRB9107003WHdvam01
1 the property.
2 (C) The Department shall prescribe such
3 regulations as may be necessary to carry out the
4 purposes of this paragraph.
5 (g) Double deductions. Unless specifically provided
6 otherwise, nothing in this Section shall permit the same item
7 to be deducted more than once.
8 (h) Legislative intention. Except as expressly provided
9 by this Section there shall be no modifications or
10 limitations on the amounts of income, gain, loss or deduction
11 taken into account in determining gross income, adjusted
12 gross income or taxable income for federal income tax
13 purposes for the taxable year, or in the amount of such items
14 entering into the computation of base income and net income
15 under this Act for such taxable year, whether in respect of
16 property values as of August 1, 1969 or otherwise.
17 (Source: P.A. 90-491, eff. 1-1-98; 90-717, eff. 8-7-98;
18 90-770, eff. 8-14-98; 91-192, eff. 7-20-99; 91-205, eff.
19 7-20-99; 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676,
20 eff. 12-23-99; revised 1-5-00.)
21 Section 99. Effective date. This Act takes effect upon
22 becoming law.".