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92_SB1543enr SB1543 Enrolled LRB9211240AGgc 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 3. The Illinois Income Tax Act is amended by 5 changing Section 203 as follows: 6 (35 ILCS 5/203) (from Ch. 120, par. 2-203) 7 Sec. 203. Base income defined. 8 (a) Individuals. 9 (1) In general. In the case of an individual, base 10 income means an amount equal to the taxpayer's adjusted 11 gross income for the taxable year as modified by 12 paragraph (2). 13 (2) Modifications. The adjusted gross income 14 referred to in paragraph (1) shall be modified by adding 15 thereto the sum of the following amounts: 16 (A) An amount equal to all amounts paid or 17 accrued to the taxpayer as interest or dividends 18 during the taxable year to the extent excluded from 19 gross income in the computation of adjusted gross 20 income, except stock dividends of qualified public 21 utilities described in Section 305(e) of the 22 Internal Revenue Code; 23 (B) An amount equal to the amount of tax 24 imposed by this Act to the extent deducted from 25 gross income in the computation of adjusted gross 26 income for the taxable year; 27 (C) An amount equal to the amount received 28 during the taxable year as a recovery or refund of 29 real property taxes paid with respect to the 30 taxpayer's principal residence under the Revenue Act 31 of 1939 and for which a deduction was previously SB1543 Enrolled -2- LRB9211240AGgc 1 taken under subparagraph (L) of this paragraph (2) 2 prior to July 1, 1991, the retrospective application 3 date of Article 4 of Public Act 87-17. In the case 4 of multi-unit or multi-use structures and farm 5 dwellings, the taxes on the taxpayer's principal 6 residence shall be that portion of the total taxes 7 for the entire property which is attributable to 8 such principal residence; 9 (D) An amount equal to the amount of the 10 capital gain deduction allowable under the Internal 11 Revenue Code, to the extent deducted from gross 12 income in the computation of adjusted gross income; 13 (D-5) An amount, to the extent not included in 14 adjusted gross income, equal to the amount of money 15 withdrawn by the taxpayer in the taxable year from a 16 medical care savings account and the interest earned 17 on the account in the taxable year of a withdrawal 18 pursuant to subsection (b) of Section 20 of the 19 Medical Care Savings Account Act or subsection (b) 20 of Section 20 of the Medical Care Savings Account 21 Act of 2000;and22 (D-10) For taxable years ending after December 23 31, 1997, an amount equal to any eligible 24 remediation costs that the individual deducted in 25 computing adjusted gross income and for which the 26 individual claims a credit under subsection (l) of 27 Section 201; 28 (D-15) For taxable years 2001 and thereafter, 29 an amount equal to the bonus depreciation deduction 30 (30% of the adjusted basis of the qualified 31 property) taken on the taxpayer's federal income tax 32 return for the taxable year under subsection (k) of 33 Section 168 of the Internal Revenue Code; and 34 (D-16) If the taxpayer reports a capital gain SB1543 Enrolled -3- LRB9211240AGgc 1 or loss on the taxpayer's federal income tax return 2 for 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 (D-15), then an amount equal to the 6 aggregate amount of the deductions taken in all 7 taxable years under subparagraph (Z) with respect to 8 that 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 13 the following amounts: 14 (E) For taxable years ending before December 15 31, 2001, any amount included in such total in 16 respect of any compensation (including but not 17 limited to any compensation paid or accrued to a 18 serviceman while a prisoner of war or missing in 19 action) paid to a resident by reason of being on 20 active duty in the Armed Forces of the United States 21 and in respect of any compensation paid or accrued 22 to a resident who as a governmental employee was a 23 prisoner of war or missing in action, and in respect 24 of any compensation paid to a resident in 1971 or 25 thereafter for annual training performed pursuant to 26 Sections 502 and 503, Title 32, United States Code 27 as a member of the Illinois National Guard. For 28 taxable years ending on or after December 31, 2001, 29 any amount included in such total in respect of any 30 compensation (including but not limited to any 31 compensation paid or accrued to a serviceman while a 32 prisoner of war or missing in action) paid to a 33 resident by reason of being a member of any 34 component of the Armed Forces of the United States SB1543 Enrolled -4- LRB9211240AGgc 1 and in respect of any compensation paid or accrued 2 to a resident who as a governmental employee was a 3 prisoner of war or missing in action, and in respect 4 of any compensation paid to a resident in 2001 or 5 thereafter by reason of being a member of the 6 Illinois National Guard. The provisions of this 7 amendatory Act of the 92nd General Assembly are 8 exempt from the provisions of Section 250; 9 (F) An amount equal to all amounts included in 10 such total pursuant to the provisions of Sections 11 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and 12 408 of the Internal Revenue Code, or included in 13 such total as distributions under the provisions of 14 any retirement or disability plan for employees of 15 any governmental agency or unit, or retirement 16 payments to retired partners, which payments are 17 excluded in computing net earnings from self 18 employment by Section 1402 of the Internal Revenue 19 Code and regulations adopted pursuant thereto; 20 (G) The valuation limitation amount; 21 (H) An amount equal to the amount of any tax 22 imposed by this Act which was refunded to the 23 taxpayer and included in such total for the taxable 24 year; 25 (I) An amount equal to all amounts included in 26 such total pursuant to the provisions of Section 111 27 of the Internal Revenue Code as a recovery of items 28 previously deducted from adjusted gross income in 29 the computation of taxable income; 30 (J) An amount equal to those dividends 31 included in such total which were paid by a 32 corporation which conducts business operations in an 33 Enterprise Zone or zones created under the Illinois 34 Enterprise Zone Act, and conducts substantially all SB1543 Enrolled -5- LRB9211240AGgc 1 of its operations in an Enterprise Zone or zones; 2 (K) An amount equal to those dividends 3 included in such total that were paid by a 4 corporation that conducts business operations in a 5 federally designated Foreign Trade Zone or Sub-Zone 6 and that is designated a High Impact Business 7 located in Illinois; provided that dividends 8 eligible for the deduction provided in subparagraph 9 (J) of paragraph (2) of this subsection shall not be 10 eligible for the deduction provided under this 11 subparagraph (K); 12 (L) For taxable years ending after December 13 31, 1983, an amount equal to all social security 14 benefits and railroad retirement benefits included 15 in such total pursuant to Sections 72(r) and 86 of 16 the Internal Revenue Code; 17 (M) With the exception of any amounts 18 subtracted under subparagraph (N), an amount equal 19 to the sum of all amounts disallowed as deductions 20 by (i) Sections 171(a) (2), and 265(2) of the 21 Internal Revenue Code of 1954, as now or hereafter 22 amended, and all amounts of expenses allocable to 23 interest and disallowed as deductions by Section 24 265(1) of the Internal Revenue Code of 1954, as now 25 or hereafter amended; and (ii) for taxable years 26 ending on or after August 13, 1999, Sections 27 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the 28 Internal Revenue Code; the provisions of this 29 subparagraph are exempt from the provisions of 30 Section 250; 31 (N) An amount equal to all amounts included in 32 such total which are exempt from taxation by this 33 State either by reason of its statutes or 34 Constitution or by reason of the Constitution, SB1543 Enrolled -6- LRB9211240AGgc 1 treaties or statutes of the United States; provided 2 that, in the case of any statute of this State that 3 exempts income derived from bonds or other 4 obligations from the tax imposed under this Act, the 5 amount exempted shall be the interest net of bond 6 premium amortization; 7 (O) An amount equal to any contribution made 8 to a job training project established pursuant to 9 the Tax Increment Allocation Redevelopment Act; 10 (P) An amount equal to the amount of the 11 deduction used to compute the federal income tax 12 credit for restoration of substantial amounts held 13 under claim of right for the taxable year pursuant 14 to Section 1341 of the Internal Revenue Code of 15 1986; 16 (Q) An amount equal to any amounts included in 17 such total, received by the taxpayer as an 18 acceleration in the payment of life, endowment or 19 annuity benefits in advance of the time they would 20 otherwise be payable as an indemnity for a terminal 21 illness; 22 (R) An amount equal to the amount of any 23 federal or State bonus paid to veterans of the 24 Persian Gulf War; 25 (S) An amount, to the extent included in 26 adjusted gross income, equal to the amount of a 27 contribution made in the taxable year on behalf of 28 the taxpayer to a medical care savings account 29 established under the Medical Care Savings Account 30 Act or the Medical Care Savings Account Act of 2000 31 to the extent the contribution is accepted by the 32 account administrator as provided in that Act; 33 (T) An amount, to the extent included in 34 adjusted gross income, equal to the amount of SB1543 Enrolled -7- LRB9211240AGgc 1 interest earned in the taxable year on a medical 2 care savings account established under the Medical 3 Care Savings Account Act or the Medical Care Savings 4 Account Act of 2000 on behalf of the taxpayer, other 5 than interest added pursuant to item (D-5) of this 6 paragraph (2); 7 (U) For one taxable year beginning on or after 8 January 1, 1994, an amount equal to the total amount 9 of tax imposed and paid under subsections (a) and 10 (b) of Section 201 of this Act on grant amounts 11 received by the taxpayer under the Nursing Home 12 Grant Assistance Act during the taxpayer's taxable 13 years 1992 and 1993; 14 (V) Beginning with tax years ending on or 15 after December 31, 1995 and ending with tax years 16 ending on or before December 31, 2004, an amount 17 equal to the amount paid by a taxpayer who is a 18 self-employed taxpayer, a partner of a partnership, 19 or a shareholder in a Subchapter S corporation for 20 health insurance or long-term care insurance for 21 that taxpayer or that taxpayer's spouse or 22 dependents, to the extent that the amount paid for 23 that health insurance or long-term care insurance 24 may be deducted under Section 213 of the Internal 25 Revenue Code of 1986, has not been deducted on the 26 federal income tax return of the taxpayer, and does 27 not exceed the taxable income attributable to that 28 taxpayer's income, self-employment income, or 29 Subchapter S corporation income; except that no 30 deduction shall be allowed under this item (V) if 31 the taxpayer is eligible to participate in any 32 health insurance or long-term care insurance plan of 33 an employer of the taxpayer or the taxpayer's 34 spouse. The amount of the health insurance and SB1543 Enrolled -8- LRB9211240AGgc 1 long-term care insurance subtracted under this item 2 (V) shall be determined by multiplying total health 3 insurance and long-term care insurance premiums paid 4 by the taxpayer times a number that represents the 5 fractional percentage of eligible medical expenses 6 under Section 213 of the Internal Revenue Code of 7 1986 not actually deducted on the taxpayer's federal 8 income tax return; 9 (W) For taxable years beginning on or after 10 January 1, 1998, all amounts included in the 11 taxpayer's federal gross income in the taxable year 12 from amounts converted from a regular IRA to a Roth 13 IRA. This paragraph is exempt from the provisions of 14 Section 250; 15 (X) For taxable year 1999 and thereafter, an 16 amount equal to the amount of any (i) distributions, 17 to the extent includible in gross income for federal 18 income tax purposes, made to the taxpayer because of 19 his or her status as a victim of persecution for 20 racial or religious reasons by Nazi Germany or any 21 other Axis regime or as an heir of the victim and 22 (ii) items of income, to the extent includible in 23 gross income for federal income tax purposes, 24 attributable to, derived from or in any way related 25 to assets stolen from, hidden from, or otherwise 26 lost to a victim of persecution for racial or 27 religious reasons by Nazi Germany or any other Axis 28 regime immediately prior to, during, and immediately 29 after World War II, including, but not limited to, 30 interest on the proceeds receivable as insurance 31 under policies issued to a victim of persecution for 32 racial or religious reasons by Nazi Germany or any 33 other Axis regime by European insurance companies 34 immediately prior to and during World War II; SB1543 Enrolled -9- LRB9211240AGgc 1 provided, however, this subtraction from federal 2 adjusted gross income does not apply to assets 3 acquired with such assets or with the proceeds from 4 the sale of such assets; provided, further, this 5 paragraph shall only apply to a taxpayer who was the 6 first recipient of such assets after their recovery 7 and who is 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. The amount of 10 and the eligibility for any public assistance, 11 benefit, or similar entitlement is not affected by 12 the inclusion of items (i) and (ii) of this 13 paragraph in gross income for federal income tax 14 purposes. This paragraph is exempt from the 15 provisions of Section 250;and16 (Y) For taxable years beginning on or after 17 January 1, 2002, moneys contributed in the taxable 18 year to a College Savings Pool account under Section 19 16.5 of the State Treasurer Act. This subparagraph 20 (Y) is exempt from the provisions of Section 250; 21 (Z) For taxable years 2001 and thereafter, for 22 the taxable year in which the bonus depreciation 23 deduction (30% of the adjusted basis of the 24 qualified property) is taken on the taxpayer's 25 federal income tax return under subsection (k) of 26 Section 168 of the Internal Revenue Code and for 27 each applicable taxable year thereafter, an amount 28 equal to "x", where: 29 (1) "y" equals the amount of the 30 depreciation deduction taken for the taxable 31 year on the taxpayer's federal income tax 32 return on property for which the bonus 33 depreciation deduction (30% of the adjusted 34 basis of the qualified property) was taken in SB1543 Enrolled -10- LRB9211240AGgc 1 any year under subsection (k) of Section 168 of 2 the Internal Revenue Code, but not including 3 the bonus depreciation deduction; and 4 (2) "x" equals "y" multiplied by 30 and 5 then divided by 70 (or "y" multiplied by 6 0.429). 7 The aggregate amount deducted under this 8 subparagraph in all taxable years for any one piece 9 of property may not exceed the amount of the bonus 10 depreciation deduction (30% of the adjusted basis of 11 the qualified property) taken on that property on 12 the taxpayer's federal income tax return under 13 subsection (k) of Section 168 of the Internal 14 Revenue Code; and 15 (AA) If the taxpayer reports a capital gain or 16 loss on the taxpayer's federal income tax return for 17 the taxable year based on a sale or transfer of 18 property for which the taxpayer was required in any 19 taxable year to make an addition modification under 20 subparagraph (D-15), then an amount equal to that 21 addition modification. 22 The taxpayer is allowed to take the deduction 23 under this subparagraph only once with respect to 24 any one piece of property. 25 (b) Corporations. 26 (1) In general. In the case of a corporation, base 27 income means an amount equal to the taxpayer's taxable 28 income for the taxable year as modified by paragraph (2). 29 (2) Modifications. The taxable income referred to 30 in paragraph (1) shall be modified by adding thereto the 31 sum of the following amounts: 32 (A) An amount equal to all amounts paid or 33 accrued to the taxpayer as interest and all 34 distributions received from regulated investment SB1543 Enrolled -11- LRB9211240AGgc 1 companies during the taxable year to the extent 2 excluded from gross income in the computation of 3 taxable income; 4 (B) An amount equal to the amount of tax 5 imposed by this Act to the extent deducted from 6 gross income in the computation of taxable income 7 for the taxable year; 8 (C) In the case of a regulated investment 9 company, an amount equal to the excess of (i) the 10 net long-term capital gain for the taxable year, 11 over (ii) the amount of the capital gain dividends 12 designated as such in accordance with Section 13 852(b)(3)(C) of the Internal Revenue Code and any 14 amount designated under Section 852(b)(3)(D) of the 15 Internal Revenue Code, attributable to the taxable 16 year (this amendatory Act of 1995 (Public Act 89-89) 17 is declarative of existing law and is not a new 18 enactment); 19 (D) The amount of any net operating loss 20 deduction taken in arriving at taxable income, other 21 than a net operating loss carried forward from a 22 taxable year ending prior to December 31, 1986; 23 (E) For taxable years in which a net operating 24 loss carryback or carryforward from a taxable year 25 ending prior to December 31, 1986 is an element of 26 taxable income under paragraph (1) of subsection (e) 27 or subparagraph (E) of paragraph (2) of subsection 28 (e), the amount by which addition modifications 29 other than those provided by this subparagraph (E) 30 exceeded subtraction modifications in such earlier 31 taxable year, with the following limitations applied 32 in the order that they are listed: 33 (i) the addition modification relating to 34 the net operating loss carried back or forward SB1543 Enrolled -12- LRB9211240AGgc 1 to the taxable year from any taxable year 2 ending prior to December 31, 1986 shall be 3 reduced by the amount of addition modification 4 under this subparagraph (E) which related to 5 that net operating loss and which was taken 6 into account in calculating the base income of 7 an earlier taxable year, and 8 (ii) the addition modification relating 9 to the net operating loss carried back or 10 forward to the taxable year from any taxable 11 year ending prior to December 31, 1986 shall 12 not exceed the amount of such carryback or 13 carryforward; 14 For taxable years in which there is a net 15 operating loss carryback or carryforward from more 16 than one other taxable year ending prior to December 17 31, 1986, the addition modification provided in this 18 subparagraph (E) shall be the sum of the amounts 19 computed independently under the preceding 20 provisions of this subparagraph (E) for each such 21 taxable year;and22 (E-5) For taxable years ending after December 23 31, 1997, an amount equal to any eligible 24 remediation costs that the corporation deducted in 25 computing adjusted gross income and for which the 26 corporation claims a credit under subsection (l) of 27 Section 201; 28 (E-10) For taxable years 2001 and thereafter, 29 an amount equal to the bonus depreciation deduction 30 (30% of the adjusted basis of the qualified 31 property) taken on the taxpayer's federal income tax 32 return for the taxable year under subsection (k) of 33 Section 168 of the Internal Revenue Code; and 34 (E-11) If the taxpayer reports a capital gain SB1543 Enrolled -13- LRB9211240AGgc 1 or loss on the taxpayer's federal income tax return 2 for 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 7 taxable years under subparagraph (T) with respect to 8 that 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 13 the following amounts: 14 (F) An amount equal to the amount of any tax 15 imposed by this Act which was refunded to the 16 taxpayer and included in such total for the taxable 17 year; 18 (G) An amount equal to any amount included in 19 such total under Section 78 of the Internal Revenue 20 Code; 21 (H) In the case of a regulated investment 22 company, an amount equal to the amount of exempt 23 interest dividends as defined in subsection (b) (5) 24 of Section 852 of the Internal Revenue Code, paid to 25 shareholders for the taxable year; 26 (I) With the exception of any amounts 27 subtracted under subparagraph (J), an amount equal 28 to the sum of all amounts disallowed as deductions 29 by (i) Sections 171(a) (2), and 265(a)(2) and 30 amounts disallowed as interest expense by Section 31 291(a)(3) of the Internal Revenue Code, as now or 32 hereafter amended, and all amounts of expenses 33 allocable to interest and disallowed as deductions 34 by Section 265(a)(1) of the Internal Revenue Code, SB1543 Enrolled -14- LRB9211240AGgc 1 as now or hereafter amended; and (ii) for taxable 2 years ending on or after August 13, 1999, Sections 3 171(a)(2), 265, 280C, 291(a)(3), and 832(b)(5)(B)(i) 4 of the Internal Revenue Code; the provisions of this 5 subparagraph are exempt from the provisions of 6 Section 250; 7 (J) An amount equal to all amounts included in 8 such total which are exempt from taxation by this 9 State either by reason of its statutes or 10 Constitution or by reason of the Constitution, 11 treaties or statutes of the United States; provided 12 that, in the case of any statute of this State that 13 exempts income derived from bonds or other 14 obligations from the tax imposed under this Act, the 15 amount exempted shall be the interest net of bond 16 premium amortization; 17 (K) An amount equal to those dividends 18 included in such total which were paid by a 19 corporation which conducts business operations in an 20 Enterprise Zone or zones created under the Illinois 21 Enterprise Zone Act and conducts substantially all 22 of its operations in an Enterprise Zone or zones; 23 (L) An amount equal to those dividends 24 included in such total that were paid by a 25 corporation that conducts business operations in a 26 federally designated Foreign Trade Zone or Sub-Zone 27 and that is designated a High Impact Business 28 located in Illinois; provided that dividends 29 eligible for the deduction provided in subparagraph 30 (K) of paragraph 2 of this subsection shall not be 31 eligible for the deduction provided under this 32 subparagraph (L); 33 (M) For any taxpayer that is a financial 34 organization within the meaning of Section 304(c) of SB1543 Enrolled -15- LRB9211240AGgc 1 this Act, an amount included in such total as 2 interest income from a loan or loans made by such 3 taxpayer to a borrower, to the extent that such a 4 loan is secured by property which is eligible for 5 the Enterprise Zone Investment Credit. To determine 6 the portion of a loan or loans that is secured by 7 property eligible for a Section 201(f) investment 8 credit to the borrower, the entire principal amount 9 of the loan or loans between the taxpayer and the 10 borrower should be divided into the basis of the 11 Section 201(f) investment credit property which 12 secures the loan or loans, using for this purpose 13 the original basis of such property on the date that 14 it was placed in service in the Enterprise Zone. 15 The subtraction modification available to taxpayer 16 in any year under this subsection shall be that 17 portion of the total interest paid by the borrower 18 with respect to such loan attributable to the 19 eligible property as calculated under the previous 20 sentence; 21 (M-1) For any taxpayer that is a financial 22 organization within the meaning of Section 304(c) of 23 this Act, an amount included in such total as 24 interest income from a loan or loans made by such 25 taxpayer to a borrower, to the extent that such a 26 loan is secured by property which is eligible for 27 the High Impact Business Investment Credit. To 28 determine the portion of a loan or loans that is 29 secured by property eligible for a Section 201(h) 30 investment credit to the borrower, the entire 31 principal amount of the loan or loans between the 32 taxpayer and the borrower should be divided into the 33 basis of the Section 201(h) investment credit 34 property which secures the loan or loans, using for SB1543 Enrolled -16- LRB9211240AGgc 1 this purpose the original basis of such property on 2 the date that it was placed in service in a 3 federally designated Foreign Trade Zone or Sub-Zone 4 located in Illinois. No taxpayer that is eligible 5 for the deduction provided in subparagraph (M) of 6 paragraph (2) of this subsection shall be eligible 7 for the deduction provided under this subparagraph 8 (M-1). The subtraction modification available to 9 taxpayers in any year under this subsection shall be 10 that portion of the total interest paid by the 11 borrower with respect to such loan attributable to 12 the eligible property as calculated under the 13 previous sentence; 14 (N) Two times any contribution made during the 15 taxable year to a designated zone organization to 16 the extent that the contribution (i) qualifies as a 17 charitable contribution under subsection (c) of 18 Section 170 of the Internal Revenue Code and (ii) 19 must, by its terms, be used for a project approved 20 by the Department of Commerce and Community Affairs 21 under Section 11 of the Illinois Enterprise Zone 22 Act; 23 (O) An amount equal to: (i) 85% for taxable 24 years ending on or before December 31, 1992, or, a 25 percentage equal to the percentage allowable under 26 Section 243(a)(1) of the Internal Revenue Code of 27 1986 for taxable years ending after December 31, 28 1992, of the amount by which dividends included in 29 taxable income and received from a corporation that 30 is not created or organized under the laws of the 31 United States or any state or political subdivision 32 thereof, including, for taxable years ending on or 33 after December 31, 1988, dividends received or 34 deemed received or paid or deemed paid under SB1543 Enrolled -17- LRB9211240AGgc 1 Sections 951 through 964 of the Internal Revenue 2 Code, exceed the amount of the modification provided 3 under subparagraph (G) of paragraph (2) of this 4 subsection (b) which is related to such dividends; 5 plus (ii) 100% of the amount by which dividends, 6 included in taxable income and received, including, 7 for taxable years ending on or after December 31, 8 1988, dividends received or deemed received or paid 9 or deemed paid under Sections 951 through 964 of the 10 Internal Revenue Code, from any such corporation 11 specified in clause (i) that would but for the 12 provisions of Section 1504 (b) (3) of the Internal 13 Revenue Code be treated as a member of the 14 affiliated group which includes the dividend 15 recipient, exceed the amount of the modification 16 provided under subparagraph (G) of paragraph (2) of 17 this subsection (b) which is related to such 18 dividends; 19 (P) An amount equal to any contribution made 20 to a job training project established pursuant to 21 the Tax Increment Allocation Redevelopment Act; 22 (Q) 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 (R) In the case of an attorney-in-fact with 29 respect to whom an interinsurer or a reciprocal 30 insurer has made the election under Section 835 of 31 the Internal Revenue Code, 26 U.S.C. 835, an amount 32 equal to the excess, if any, of the amounts paid or 33 incurred by that interinsurer or reciprocal insurer 34 in the taxable year to the attorney-in-fact over the SB1543 Enrolled -18- LRB9211240AGgc 1 deduction allowed to that interinsurer or reciprocal 2 insurer with respect to the attorney-in-fact under 3 Section 835(b) of the Internal Revenue Code for the 4 taxable year;and5 (S) For taxable years ending on or after 6 December 31, 1997, in the case of a Subchapter S 7 corporation, an amount equal to all amounts of 8 income allocable to a shareholder subject to the 9 Personal Property Tax Replacement Income Tax imposed 10 by subsections (c) and (d) of Section 201 of this 11 Act, including amounts allocable to organizations 12 exempt from federal income tax by reason of Section 13 501(a) of the Internal Revenue Code. This 14 subparagraph (S) is exempt from the provisions of 15 Section 250; 16 (T) For taxable years 2001 and thereafter, for 17 the taxable year in which the bonus depreciation 18 deduction (30% of the adjusted basis of the 19 qualified property) is taken on the taxpayer's 20 federal income tax return under subsection (k) of 21 Section 168 of the Internal Revenue Code and for 22 each applicable taxable year thereafter, an amount 23 equal to "x", where: 24 (1) "y" equals the amount of the 25 depreciation deduction taken for the taxable 26 year on the taxpayer's federal income tax 27 return on property for which the bonus 28 depreciation deduction (30% of the adjusted 29 basis of the qualified property) was taken in 30 any year under subsection (k) of Section 168 of 31 the Internal Revenue Code, but not including 32 the bonus depreciation deduction; and 33 (2) "x" equals "y" multiplied by 30 and 34 then divided by 70 (or "y" multiplied by SB1543 Enrolled -19- LRB9211240AGgc 1 0.429). 2 The aggregate amount deducted under this 3 subparagraph in all taxable years for any one piece 4 of property may not exceed the amount of the bonus 5 depreciation deduction (30% of the adjusted basis of 6 the qualified property) taken on that property on 7 the taxpayer's federal income tax return under 8 subsection (k) of Section 168 of the Internal 9 Revenue Code; and 10 (U) If the taxpayer reports a capital gain or 11 loss on the taxpayer's federal income tax return for 12 the taxable year based on a sale or transfer of 13 property for which the taxpayer was required in any 14 taxable year to make an addition modification under 15 subparagraph (E-10), then an amount equal to that 16 addition modification. 17 The taxpayer is allowed to take the deduction 18 under this subparagraph only once with respect to 19 any one piece of property. 20 (3) Special rule. For purposes of paragraph (2) 21 (A), "gross income" in the case of a life insurance 22 company, for tax years ending on and after December 31, 23 1994, shall mean the gross investment income for the 24 taxable year. 25 (c) Trusts and estates. 26 (1) In general. In the case of a trust or estate, 27 base income means an amount equal to the taxpayer's 28 taxable income for the taxable year as modified by 29 paragraph (2). 30 (2) Modifications. Subject to the provisions of 31 paragraph (3), the taxable income referred to in 32 paragraph (1) shall be modified by adding thereto the sum 33 of the following amounts: 34 (A) An amount equal to all amounts paid or SB1543 Enrolled -20- LRB9211240AGgc 1 accrued to the taxpayer as interest or dividends 2 during the taxable year to the extent excluded from 3 gross income in the computation of taxable income; 4 (B) In the case of (i) an estate, $600; (ii) a 5 trust which, under its governing instrument, is 6 required to distribute all of its income currently, 7 $300; and (iii) any other trust, $100, but in each 8 such case, only to the extent such amount was 9 deducted in the computation of taxable income; 10 (C) An amount equal to the amount of tax 11 imposed by this Act to the extent deducted from 12 gross income in the computation of taxable income 13 for the taxable year; 14 (D) The amount of any net operating loss 15 deduction taken in arriving at taxable income, other 16 than a net operating loss carried forward from a 17 taxable year ending prior to December 31, 1986; 18 (E) For taxable years in which a net operating 19 loss carryback or carryforward from a taxable year 20 ending prior to December 31, 1986 is an element of 21 taxable income under paragraph (1) of subsection (e) 22 or subparagraph (E) of paragraph (2) of subsection 23 (e), the amount by which addition modifications 24 other than those provided by this subparagraph (E) 25 exceeded subtraction modifications in such taxable 26 year, with the following limitations applied in the 27 order that they are listed: 28 (i) the addition modification relating to 29 the net operating loss carried back or forward 30 to the taxable year from any taxable year 31 ending prior to December 31, 1986 shall be 32 reduced by the amount of addition modification 33 under this subparagraph (E) which related to 34 that net operating loss and which was taken SB1543 Enrolled -21- LRB9211240AGgc 1 into account in calculating the base income of 2 an earlier taxable year, and 3 (ii) the addition modification relating 4 to the net operating loss carried back or 5 forward to the taxable year from any taxable 6 year ending prior to December 31, 1986 shall 7 not exceed the amount of such carryback or 8 carryforward; 9 For taxable years in which there is a net 10 operating loss carryback or carryforward from more 11 than one other taxable year ending prior to December 12 31, 1986, the addition modification provided in this 13 subparagraph (E) shall be the sum of the amounts 14 computed independently under the preceding 15 provisions of this subparagraph (E) for each such 16 taxable year; 17 (F) For taxable years ending on or after 18 January 1, 1989, an amount equal to the tax deducted 19 pursuant to Section 164 of the Internal Revenue Code 20 if the trust or estate is claiming the same tax for 21 purposes of the Illinois foreign tax credit under 22 Section 601 of this Act; 23 (G) An amount equal to the amount of the 24 capital gain deduction allowable under the Internal 25 Revenue Code, to the extent deducted from gross 26 income in the computation of taxable income;and27 (G-5) For taxable years ending after December 28 31, 1997, an amount equal to any eligible 29 remediation costs that the trust or estate deducted 30 in computing adjusted gross income and for which the 31 trust or estate claims a credit under subsection (l) 32 of Section 201; 33 (G-10) For taxable years 2001 and thereafter, 34 an amount equal to the bonus depreciation deduction SB1543 Enrolled -22- LRB9211240AGgc 1 (30% of the adjusted basis of the qualified 2 property) taken on the taxpayer's federal income tax 3 return for the taxable year under subsection (k) of 4 Section 168 of the Internal Revenue Code; and 5 (G-11) If the taxpayer reports a capital gain 6 or loss on the taxpayer's federal income tax return 7 for the taxable year based on a sale or transfer of 8 property for which the taxpayer was required in any 9 taxable year to make an addition modification under 10 subparagraph (G-10), then an amount equal to the 11 aggregate amount of the deductions taken in all 12 taxable years under subparagraph (R) with respect to 13 that property; 14 The taxpayer is required to make the addition 15 modification under this subparagraph only once with 16 respect to any one piece of property; 17 and by deducting from the total so obtained the sum of 18 the following amounts: 19 (H) An amount equal to all amounts included in 20 such total pursuant to the provisions of Sections 21 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 22 408 of the Internal Revenue Code or included in such 23 total as distributions under the provisions of any 24 retirement or disability plan for employees of any 25 governmental agency or unit, or retirement payments 26 to retired partners, which payments are excluded in 27 computing net earnings from self employment by 28 Section 1402 of the Internal Revenue Code and 29 regulations adopted pursuant thereto; 30 (I) The valuation limitation amount; 31 (J) An amount equal to the amount of any tax 32 imposed by this Act which was refunded to the 33 taxpayer and included in such total for the taxable 34 year; SB1543 Enrolled -23- LRB9211240AGgc 1 (K) An amount equal to all amounts included in 2 taxable income as modified by subparagraphs (A), 3 (B), (C), (D), (E), (F) and (G) which are exempt 4 from taxation by this State either by reason of its 5 statutes or Constitution or by reason of the 6 Constitution, treaties or statutes of the United 7 States; provided that, in the case of any statute of 8 this State that exempts income derived from bonds or 9 other obligations from the tax imposed under this 10 Act, the amount exempted shall be the interest net 11 of bond premium amortization; 12 (L) With the exception of any amounts 13 subtracted under subparagraph (K), an amount equal 14 to the sum of all amounts disallowed as deductions 15 by (i) Sections 171(a) (2) and 265(a)(2) of the 16 Internal Revenue Code, as now or hereafter amended, 17 and all amounts of expenses allocable to interest 18 and disallowed as deductions by Section 265(1) of 19 the Internal Revenue Code of 1954, as now or 20 hereafter amended; and (ii) for taxable years ending 21 on or after August 13, 1999, Sections 171(a)(2), 22 265, 280C, and 832(b)(5)(B)(i) of the Internal 23 Revenue Code; the provisions of this subparagraph 24 are exempt from the provisions of Section 250; 25 (M) An amount equal to those dividends 26 included in such total which were paid by a 27 corporation which conducts business operations in an 28 Enterprise Zone or zones created under the Illinois 29 Enterprise Zone Act and conducts substantially all 30 of its operations in an Enterprise Zone or Zones; 31 (N) An amount equal to any contribution made 32 to a job training project established pursuant to 33 the Tax Increment Allocation Redevelopment Act; 34 (O) An amount equal to those dividends SB1543 Enrolled -24- LRB9211240AGgc 1 included in such total that were paid by a 2 corporation that conducts business operations in a 3 federally designated Foreign Trade Zone or Sub-Zone 4 and that is designated a High Impact Business 5 located in Illinois; provided that dividends 6 eligible for the deduction provided in subparagraph 7 (M) of paragraph (2) of this subsection shall not be 8 eligible for the deduction provided under this 9 subparagraph (O); 10 (P) An amount equal to the amount of the 11 deduction used to compute the federal income tax 12 credit for restoration of substantial amounts held 13 under claim of right for the taxable year pursuant 14 to Section 1341 of the Internal Revenue Code of 15 1986;and16 (Q) For taxable year 1999 and thereafter, an 17 amount equal to the amount of any (i) distributions, 18 to the extent includible in gross income for federal 19 income tax purposes, made to the taxpayer because of 20 his or her status as a victim of persecution for 21 racial or religious reasons by Nazi Germany or any 22 other Axis regime or as an heir of the victim and 23 (ii) items of income, to the extent includible in 24 gross income for federal income tax purposes, 25 attributable to, derived from or in any way related 26 to assets stolen from, hidden from, or otherwise 27 lost to a victim of persecution for racial or 28 religious reasons by Nazi Germany or any other Axis 29 regime immediately prior to, during, and immediately 30 after World War II, including, but not limited to, 31 interest on the proceeds receivable as insurance 32 under policies issued to a victim of persecution for 33 racial or religious reasons by Nazi Germany or any 34 other Axis regime by European insurance companies SB1543 Enrolled -25- LRB9211240AGgc 1 immediately prior to and during World War II; 2 provided, however, this subtraction from federal 3 adjusted gross income does not apply to assets 4 acquired with such assets or with the proceeds from 5 the sale of such assets; provided, further, this 6 paragraph shall only apply to a taxpayer who was the 7 first recipient of such assets after their recovery 8 and who is a victim of persecution for racial or 9 religious reasons by Nazi Germany or any other Axis 10 regime or as an heir of the victim. The amount of 11 and the eligibility for any public assistance, 12 benefit, or similar entitlement is not affected by 13 the inclusion of items (i) and (ii) of this 14 paragraph in gross income for federal income tax 15 purposes. This paragraph is exempt from the 16 provisions of Section 250; 17 (R) For taxable years 2001 and thereafter, for 18 the taxable year in which the bonus depreciation 19 deduction (30% of the adjusted basis of the 20 qualified property) is taken on the taxpayer's 21 federal income tax return under subsection (k) of 22 Section 168 of the Internal Revenue Code and for 23 each applicable taxable year thereafter, an amount 24 equal to "x", where: 25 (1) "y" equals the amount of the 26 depreciation deduction taken for the taxable 27 year on the taxpayer's federal income tax 28 return on property for which the bonus 29 depreciation deduction (30% of the adjusted 30 basis of the qualified property) was taken in 31 any year under subsection (k) of Section 168 of 32 the Internal Revenue Code, but not including 33 the bonus depreciation deduction; and 34 (2) "x" equals "y" multiplied by 30 and SB1543 Enrolled -26- LRB9211240AGgc 1 then divided by 70 (or "y" multiplied by 2 0.429). 3 The aggregate amount deducted under this 4 subparagraph in all taxable years for any one piece 5 of property may not exceed the amount of the bonus 6 depreciation deduction (30% of the adjusted basis of 7 the qualified property) taken on that property on 8 the taxpayer's federal income tax return under 9 subsection (k) of Section 168 of the Internal 10 Revenue Code; and 11 (S) If the taxpayer reports a capital gain or 12 loss on the taxpayer's federal income tax return for 13 the taxable year based on a sale or transfer of 14 property for which the taxpayer was required in any 15 taxable year to make an addition modification under 16 subparagraph (G-10), then an amount equal to that 17 addition modification. 18 The taxpayer is allowed to take the deduction 19 under this subparagraph only once with respect to 20 any one piece of property. 21 (3) Limitation. The amount of any modification 22 otherwise required under this subsection shall, under 23 regulations prescribed by the Department, be adjusted by 24 any amounts included therein which were properly paid, 25 credited, or required to be distributed, or permanently 26 set aside for charitable purposes pursuant to Internal 27 Revenue Code Section 642(c) during the taxable year. 28 (d) Partnerships. 29 (1) In general. In the case of a partnership, base 30 income means an amount equal to the taxpayer's taxable 31 income for the taxable year as modified by paragraph (2). 32 (2) Modifications. The taxable income referred to 33 in paragraph (1) shall be modified by adding thereto the 34 sum of the following amounts: SB1543 Enrolled -27- LRB9211240AGgc 1 (A) An amount equal to all amounts paid or 2 accrued to the taxpayer as interest or dividends 3 during the taxable year to the extent excluded from 4 gross income in the computation of taxable income; 5 (B) An amount equal to the amount of tax 6 imposed by this Act to the extent deducted from 7 gross income for the taxable year; 8 (C) The amount of deductions allowed to the 9 partnership pursuant to Section 707 (c) of the 10 Internal Revenue Code in calculating its taxable 11 income;and12 (D) An amount equal to the amount of the 13 capital gain deduction allowable under the Internal 14 Revenue Code, to the extent deducted from gross 15 income in the computation of taxable income; 16 (D-5) For taxable years 2001 and thereafter, 17 an amount equal to the bonus depreciation deduction 18 (30% of the adjusted basis of the qualified 19 property) taken on the taxpayer's federal income tax 20 return for the taxable year under subsection (k) of 21 Section 168 of the Internal Revenue Code; and 22 (D-6) If the taxpayer reports a capital gain 23 or loss on the taxpayer's federal income tax return 24 for the taxable year based on a sale or transfer of 25 property for which the taxpayer was required in any 26 taxable year to make an addition modification under 27 subparagraph (D-5), then an amount equal to the 28 aggregate amount of the deductions taken in all 29 taxable years under subparagraph (O) with respect to 30 that property; 31 The taxpayer is required to make the addition 32 modification under this subparagraph only once with 33 respect to any one piece of property; 34 and by deducting from the total so obtained the following SB1543 Enrolled -28- LRB9211240AGgc 1 amounts: 2 (E) The valuation limitation amount; 3 (F) An amount equal to the amount of any tax 4 imposed by this Act which was refunded to the 5 taxpayer and included in such total for the taxable 6 year; 7 (G) An amount equal to all amounts included in 8 taxable income as modified by subparagraphs (A), 9 (B), (C) and (D) which are exempt from taxation by 10 this State either by reason of its statutes or 11 Constitution or by reason of the Constitution, 12 treaties or statutes of the United States; provided 13 that, in the case of any statute of this State that 14 exempts income derived from bonds or other 15 obligations from the tax imposed under this Act, the 16 amount exempted shall be the interest net of bond 17 premium amortization; 18 (H) Any income of the partnership which 19 constitutes personal service income as defined in 20 Section 1348 (b) (1) of the Internal Revenue Code 21 (as in effect December 31, 1981) or a reasonable 22 allowance for compensation paid or accrued for 23 services rendered by partners to the partnership, 24 whichever is greater; 25 (I) An amount equal to all amounts of income 26 distributable to an entity subject to the Personal 27 Property Tax Replacement Income Tax imposed by 28 subsections (c) and (d) of Section 201 of this Act 29 including amounts distributable to organizations 30 exempt from federal income tax by reason of Section 31 501(a) of the Internal Revenue Code; 32 (J) With the exception of any amounts 33 subtracted under subparagraph (G), an amount equal 34 to the sum of all amounts disallowed as deductions SB1543 Enrolled -29- LRB9211240AGgc 1 by (i) Sections 171(a) (2), and 265(2) of the 2 Internal Revenue Code of 1954, as now or hereafter 3 amended, and all amounts of expenses allocable to 4 interest and disallowed as deductions by Section 5 265(1) of the Internal Revenue Code, as now or 6 hereafter amended; and (ii) for taxable years ending 7 on or after August 13, 1999, Sections 171(a)(2), 8 265, 280C, and 832(b)(5)(B)(i) of the Internal 9 Revenue Code; the provisions of this subparagraph 10 are exempt from the provisions of Section 250; 11 (K) An amount equal to those dividends 12 included in such total which were paid by a 13 corporation which conducts business operations in an 14 Enterprise Zone or zones created under the Illinois 15 Enterprise Zone Act, enacted by the 82nd General 16 Assembly, and which does not conduct such operations 17 other than in an Enterprise Zone or Zones; 18 (L) An amount equal to any contribution made 19 to a job training project established pursuant to 20 the Real Property Tax Increment Allocation 21 Redevelopment Act; 22 (M) An amount equal to those dividends 23 included in such total that were paid by a 24 corporation that conducts business operations in a 25 federally designated Foreign Trade Zone or Sub-Zone 26 and that is designated a High Impact Business 27 located in Illinois; provided that dividends 28 eligible for the deduction provided in subparagraph 29 (K) of paragraph (2) of this subsection shall not be 30 eligible for the deduction provided under this 31 subparagraph (M); 32 (N) An amount equal to the amount of the 33 deduction used to compute the federal income tax 34 credit for restoration of substantial amounts held SB1543 Enrolled -30- LRB9211240AGgc 1 under claim of right for the taxable year pursuant 2 to Section 1341 of the Internal Revenue Code of 3 1986; 4 (O) For taxable years 2001 and thereafter, for 5 the taxable year in which the bonus depreciation 6 deduction (30% of the adjusted basis of the 7 qualified property) is taken on the taxpayer's 8 federal income tax return under subsection (k) of 9 Section 168 of the Internal Revenue Code and for 10 each applicable taxable year thereafter, an amount 11 equal to "x", where: 12 (1) "y" equals the amount of the 13 depreciation deduction taken for the taxable 14 year on the taxpayer's federal income tax 15 return on property for which the bonus 16 depreciation deduction (30% of the adjusted 17 basis of the qualified property) was taken in 18 any year under subsection (k) of Section 168 of 19 the Internal Revenue Code, but not including 20 the bonus depreciation deduction; and 21 (2) "x" equals "y" multiplied by 30 and 22 then divided by 70 (or "y" multiplied by 23 0.429). 24 The aggregate amount deducted under this 25 subparagraph in all taxable years for any one piece 26 of property may not exceed the amount of the bonus 27 depreciation deduction (30% of the adjusted basis of 28 the qualified property) taken on that property on 29 the taxpayer's federal income tax return under 30 subsection (k) of Section 168 of the Internal 31 Revenue Code; and 32 (P) 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 SB1543 Enrolled -31- LRB9211240AGgc 1 property for which the taxpayer was required in any 2 taxable year to make an addition modification under 3 subparagraph (D-5), then an amount equal to that 4 addition modification. 5 The taxpayer is allowed to take the deduction 6 under this subparagraph only once with respect to 7 any one piece of property. 8 (e) Gross income; adjusted gross income; taxable income. 9 (1) In general. Subject to the provisions of 10 paragraph (2) and subsection (b) (3), for purposes of 11 this Section and Section 803(e), a taxpayer's gross 12 income, adjusted gross income, or taxable income for the 13 taxable year shall mean the amount of gross income, 14 adjusted gross income or taxable income properly 15 reportable for federal income tax purposes for the 16 taxable year under the provisions of the Internal Revenue 17 Code. Taxable income may be less than zero. However, for 18 taxable years ending on or after December 31, 1986, net 19 operating loss carryforwards from taxable years ending 20 prior to December 31, 1986, may not exceed the sum of 21 federal taxable income for the taxable year before net 22 operating loss deduction, plus the excess of addition 23 modifications over subtraction modifications for the 24 taxable year. For taxable years ending prior to December 25 31, 1986, taxable income may never be an amount in excess 26 of the net operating loss for the taxable year as defined 27 in subsections (c) and (d) of Section 172 of the Internal 28 Revenue Code, provided that when taxable income of a 29 corporation (other than a Subchapter S corporation), 30 trust, or estate is less than zero and addition 31 modifications, other than those provided by subparagraph 32 (E) of paragraph (2) of subsection (b) for corporations 33 or subparagraph (E) of paragraph (2) of subsection (c) 34 for trusts and estates, exceed subtraction modifications, SB1543 Enrolled -32- LRB9211240AGgc 1 an addition modification must be made under those 2 subparagraphs for any other taxable year to which the 3 taxable income less than zero (net operating loss) is 4 applied under Section 172 of the Internal Revenue Code or 5 under subparagraph (E) of paragraph (2) of this 6 subsection (e) applied in conjunction with Section 172 of 7 the Internal Revenue Code. 8 (2) Special rule. For purposes of paragraph (1) of 9 this subsection, the taxable income properly reportable 10 for federal income tax purposes shall mean: 11 (A) Certain life insurance companies. In the 12 case of a life insurance company subject to the tax 13 imposed by Section 801 of the Internal Revenue Code, 14 life insurance company taxable income, plus the 15 amount of distribution from pre-1984 policyholder 16 surplus accounts as calculated under Section 815a of 17 the Internal Revenue Code; 18 (B) Certain other insurance companies. In the 19 case of mutual insurance companies subject to the 20 tax imposed by Section 831 of the Internal Revenue 21 Code, insurance company taxable income; 22 (C) Regulated investment companies. In the 23 case of a regulated investment company subject to 24 the tax imposed by Section 852 of the Internal 25 Revenue Code, investment company taxable income; 26 (D) Real estate investment trusts. In the 27 case of a real estate investment trust subject to 28 the tax imposed by Section 857 of the Internal 29 Revenue Code, real estate investment trust taxable 30 income; 31 (E) Consolidated corporations. In the case of 32 a corporation which is a member of an affiliated 33 group of corporations filing a consolidated income 34 tax return for the taxable year for federal income SB1543 Enrolled -33- LRB9211240AGgc 1 tax purposes, taxable income determined as if such 2 corporation had filed a separate return for federal 3 income tax purposes for the taxable year and each 4 preceding taxable year for which it was a member of 5 an affiliated group. For purposes of this 6 subparagraph, the taxpayer's separate taxable income 7 shall be determined as if the election provided by 8 Section 243(b) (2) of the Internal Revenue Code had 9 been in effect for all such years; 10 (F) Cooperatives. In the case of a 11 cooperative corporation or association, the taxable 12 income of such organization determined in accordance 13 with the provisions of Section 1381 through 1388 of 14 the Internal Revenue Code; 15 (G) Subchapter S corporations. In the case 16 of: (i) a Subchapter S corporation for which there 17 is in effect an election for the taxable year under 18 Section 1362 of the Internal Revenue Code, the 19 taxable income of such corporation determined in 20 accordance with Section 1363(b) of the Internal 21 Revenue Code, except that taxable income shall take 22 into account those items which are required by 23 Section 1363(b)(1) of the Internal Revenue Code to 24 be separately stated; and (ii) a Subchapter S 25 corporation for which there is in effect a federal 26 election to opt out of the provisions of the 27 Subchapter S Revision Act of 1982 and have applied 28 instead the prior federal Subchapter S rules as in 29 effect on July 1, 1982, the taxable income of such 30 corporation determined in accordance with the 31 federal Subchapter S rules as in effect on July 1, 32 1982; and 33 (H) Partnerships. In the case of a 34 partnership, taxable income determined in accordance SB1543 Enrolled -34- LRB9211240AGgc 1 with Section 703 of the Internal Revenue Code, 2 except that taxable income shall take into account 3 those items which are required by Section 703(a)(1) 4 to be separately stated but which would be taken 5 into account by an individual in calculating his 6 taxable income. 7 (f) Valuation limitation amount. 8 (1) In general. The valuation limitation amount 9 referred to in subsections (a) (2) (G), (c) (2) (I) and 10 (d)(2) (E) is an amount equal to: 11 (A) The sum of the pre-August 1, 1969 12 appreciation amounts (to the extent consisting of 13 gain reportable under the provisions of Section 1245 14 or 1250 of the Internal Revenue Code) for all 15 property in respect of which such gain was reported 16 for the taxable year; plus 17 (B) The lesser of (i) the sum of the 18 pre-August 1, 1969 appreciation amounts (to the 19 extent consisting of capital gain) for all property 20 in respect of which such gain was reported for 21 federal income tax purposes for the taxable year, or 22 (ii) the net capital gain for the taxable year, 23 reduced in either case by any amount of such gain 24 included in the amount determined under subsection 25 (a) (2) (F) or (c) (2) (H). 26 (2) Pre-August 1, 1969 appreciation amount. 27 (A) If the fair market value of property 28 referred to in paragraph (1) was readily 29 ascertainable on August 1, 1969, the pre-August 1, 30 1969 appreciation amount for such property is the 31 lesser of (i) the excess of such fair market value 32 over the taxpayer's basis (for determining gain) for 33 such property on that date (determined under the 34 Internal Revenue Code as in effect on that date), or SB1543 Enrolled -35- LRB9211240AGgc 1 (ii) the total gain realized and reportable for 2 federal income tax purposes in respect of the sale, 3 exchange or other disposition of such property. 4 (B) If the fair market value of property 5 referred to in paragraph (1) was not readily 6 ascertainable on August 1, 1969, the pre-August 1, 7 1969 appreciation amount for such property is that 8 amount which bears the same ratio to the total gain 9 reported in respect of the property for federal 10 income tax purposes for the taxable year, as the 11 number of full calendar months in that part of the 12 taxpayer's holding period for the property ending 13 July 31, 1969 bears to the number of full calendar 14 months in the taxpayer's entire holding period for 15 the property. 16 (C) The Department shall prescribe such 17 regulations as may be necessary to carry out the 18 purposes of this paragraph. 19 (g) Double deductions. Unless specifically provided 20 otherwise, nothing in this Section shall permit the same item 21 to be deducted more than once. 22 (h) Legislative intention. Except as expressly provided 23 by this Section there shall be no modifications or 24 limitations on the amounts of income, gain, loss or deduction 25 taken into account in determining gross income, adjusted 26 gross income or taxable income for federal income tax 27 purposes for the taxable year, or in the amount of such items 28 entering into the computation of base income and net income 29 under this Act for such taxable year, whether in respect of 30 property values as of August 1, 1969 or otherwise. 31 (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99; 32 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676, eff. 33 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01; 92-16, SB1543 Enrolled -36- LRB9211240AGgc 1 eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff. 8-17-01; 2 revised 9-21-01.) 3 Section 5. The Use Tax Act is amended by changing 4 Section 3-7 as follows: 5 (35 ILCS 105/3-7) 6 Sec. 3-7. Aggregate manufacturing exemption. Through 7 December 31, 2007, the use of aggregate exploration, mining, 8 offhighway hauling, processing, maintenance, and reclamation 9 equipment, including replacement parts and equipment, and 10 including equipment purchased for lease, but excluding motor 11 vehicles required to be registered under the Illinois Vehicle 12 Code, is exempt from the tax imposed by this Act. 13 (Source: P.A. 90-529, eff. 11-14-97.) 14 Section 10. The Service Use Tax Act is amended by 15 changing Section 3-7 as follows: 16 (35 ILCS 110/3-7) 17 Sec. 3-7. Aggregate manufacturing exemption. Through 18 December 31, 2007, the use of aggregate exploration, mining, 19 offhighway hauling, processing, maintenance, and reclamation 20 equipment, including replacement parts and equipment, and 21 including equipment purchased for lease, but excluding motor 22 vehicles required to be registered under the Illinois Vehicle 23 Code, is exempt from the tax imposed by this Act. 24 (Source: P.A. 90-529, eff. 11-14-97.) 25 Section 15. The Service Occupation Tax Act is amended by 26 changing Section 3-7 as follows: 27 (35 ILCS 115/3-7) 28 Sec. 3-7. Aggregate manufacturing exemption. Through SB1543 Enrolled -37- LRB9211240AGgc 1 December 31, 2007, aggregate exploration, mining, offhighway 2 hauling, processing, maintenance, and reclamation equipment, 3 including replacement parts and equipment, and including 4 equipment purchased for lease, but excluding motor vehicles 5 required to be registered under the Illinois Vehicle Code, is 6 exempt from the tax imposed by this Act. 7 (Source: P.A. 90-529, eff. 11-14-97.) 8 Section 20. The Retailers' Occupation Tax Act is amended 9 by changing Section 2-7 as follows: 10 (35 ILCS 120/2-7) 11 Sec. 2-7. Aggregate manufacturing exemption. Through 12 December 31, 2007, gross receipts from proceeds from the sale 13 of aggregate exploration, mining, offhighway hauling, 14 processing, maintenance, and reclamation equipment, including 15 replacement parts and equipment, and including equipment 16 purchased for lease, but excluding motor vehicles required to 17 be registered under the Illinois Vehicle Code, are exempt 18 from the tax imposed by this Act. 19 (Source: P.A. 90-529, eff. 11-14-97.) 20 Section 99. Effective date. This Act takes effect upon 21 becoming law.