Revenue Committee

Adopted in House Comm. on May 13, 2004

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 2206

2     AMENDMENT NO. ______. Amend Senate Bill 2206 by replacing
3 everything after the enacting clause with the following:
 
4     "Section 5. The Illinois Income Tax Act is amended by
5 changing Section 203 as follows:
 
6     (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
7     Sec. 203. Base income defined.
8     (a) Individuals.
9         (1) In general. In the case of an individual, base
10     income means an amount equal to the taxpayer's adjusted
11     gross income for the taxable year as modified by paragraph
12     (2).
13         (2) Modifications. The adjusted gross income referred
14     to in paragraph (1) shall be modified by adding thereto the
15     sum of the following amounts:
16             (A) An amount equal to all amounts paid or accrued
17         to the taxpayer as interest or dividends during the
18         taxable year to the extent excluded from gross income
19         in the computation of adjusted gross income, except
20         stock dividends of qualified public utilities
21         described in Section 305(e) of the Internal Revenue
22         Code;
23             (B) An amount equal to the amount of tax imposed by
24         this Act to the extent deducted from gross income in

 

 

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1         the computation of adjusted gross income for the
2         taxable year;
3             (C) An amount equal to the amount received during
4         the taxable year as a recovery or refund of real
5         property taxes paid with respect to the taxpayer's
6         principal residence under the Revenue Act of 1939 and
7         for which a deduction was previously taken under
8         subparagraph (L) of this paragraph (2) prior to July 1,
9         1991, the retrospective application date of Article 4
10         of Public Act 87-17. In the case of multi-unit or
11         multi-use structures and farm dwellings, the taxes on
12         the taxpayer's principal residence shall be that
13         portion of the total taxes for the entire property
14         which is attributable to such principal residence;
15             (D) An amount equal to the amount of the capital
16         gain deduction allowable under the Internal Revenue
17         Code, to the extent deducted from gross income in the
18         computation of adjusted gross income;
19             (D-5) An amount, to the extent not included in
20         adjusted gross income, equal to the amount of money
21         withdrawn by the taxpayer in the taxable year from a
22         medical care savings account and the interest earned on
23         the account in the taxable year of a withdrawal
24         pursuant to subsection (b) of Section 20 of the Medical
25         Care Savings Account Act or subsection (b) of Section
26         20 of the Medical Care Savings Account Act of 2000;
27             (D-10) For taxable years ending after December 31,
28         1997, an amount equal to any eligible remediation costs
29         that the individual deducted in computing adjusted
30         gross income and for which the individual claims a
31         credit under subsection (l) of Section 201;
32             (D-15) For taxable years 2001 and thereafter, an
33         amount equal to the bonus depreciation deduction (30%
34         of the adjusted basis of the qualified property) taken

 

 

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1         on the taxpayer's federal income tax return for the
2         taxable year under subsection (k) of Section 168 of the
3         Internal Revenue Code; and
4             (D-16) If the taxpayer reports a capital gain or
5         loss on the taxpayer's federal income tax return for
6         the taxable year based on a sale or transfer of
7         property for which the taxpayer was required in any
8         taxable year to make an addition modification under
9         subparagraph (D-15), then an amount equal to the
10         aggregate amount of the deductions taken in all taxable
11         years under subparagraph (Z) with respect to that
12         property. ;
13             The taxpayer is required to make the addition
14         modification under this subparagraph only once with
15         respect to any one piece of property; . and
16             (D-20) (D-15) For taxable years beginning on or
17         after January 1, 2002, in the case of a distribution
18         from a qualified tuition program under Section 529 of
19         the Internal Revenue Code, other than (i) a
20         distribution from a College Savings Pool created under
21         Section 16.5 of the State Treasurer Act or (ii) a
22         distribution from the Illinois Prepaid Tuition Trust
23         Fund, an amount equal to the amount excluded from gross
24         income under Section 529(c)(3)(B);
25     and by deducting from the total so obtained the sum of the
26     following amounts:
27             (E) For taxable years ending before December 31,
28         2001, any amount included in such total in respect of
29         any compensation (including but not limited to any
30         compensation paid or accrued to a serviceman while a
31         prisoner of war or missing in action) paid to a
32         resident by reason of being on active duty in the Armed
33         Forces of the United States and in respect of any
34         compensation paid or accrued to a resident who as a

 

 

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1         governmental employee was a prisoner of war or missing
2         in action, and in respect of any compensation paid to a
3         resident in 1971 or thereafter for annual training
4         performed pursuant to Sections 502 and 503, Title 32,
5         United States Code as a member of the Illinois National
6         Guard. For taxable years ending on or after December
7         31, 2001, any amount included in such total in respect
8         of any compensation (including but not limited to any
9         compensation paid or accrued to a serviceman while a
10         prisoner of war or missing in action) paid to a
11         resident by reason of being a member of any component
12         of the Armed Forces of the United States and in respect
13         of any compensation paid or accrued to a resident who
14         as a governmental employee was a prisoner of war or
15         missing in action, and in respect of any compensation
16         paid to a resident in 2001 or thereafter by reason of
17         being a member of the Illinois National Guard. The
18         provisions of this amendatory Act of the 92nd General
19         Assembly are exempt from the provisions of Section 250;
20             (F) An amount equal to all amounts included in such
21         total pursuant to the provisions of Sections 402(a),
22         402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
23         Internal Revenue Code, or included in such total as
24         distributions under the provisions of any retirement
25         or disability plan for employees of any governmental
26         agency or unit, or retirement payments to retired
27         partners, which payments are excluded in computing net
28         earnings from self employment by Section 1402 of the
29         Internal Revenue Code and regulations adopted pursuant
30         thereto;
31             (G) The valuation limitation amount;
32             (H) An amount equal to the amount of any tax
33         imposed by this Act which was refunded to the taxpayer
34         and included in such total for the taxable year;

 

 

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1             (I) An amount equal to all amounts included in such
2         total pursuant to the provisions of Section 111 of the
3         Internal Revenue Code as a recovery of items previously
4         deducted from adjusted gross income in the computation
5         of taxable income;
6             (J) An amount equal to those dividends included in
7         such total which were paid by a corporation which
8         conducts business operations in an Enterprise Zone or
9         zones created under the Illinois Enterprise Zone Act,
10         and conducts substantially all of its operations in an
11         Enterprise Zone or zones;
12             (K) An amount equal to those dividends included in
13         such total that were paid by a corporation that
14         conducts business operations in a federally designated
15         Foreign Trade Zone or Sub-Zone and that is designated a
16         High Impact Business located in Illinois; provided
17         that dividends eligible for the deduction provided in
18         subparagraph (J) of paragraph (2) of this subsection
19         shall not be eligible for the deduction provided under
20         this subparagraph (K);
21             (L) For taxable years ending after December 31,
22         1983, an amount equal to all social security benefits
23         and railroad retirement benefits included in such
24         total pursuant to Sections 72(r) and 86 of the Internal
25         Revenue Code;
26             (M) With the exception of any amounts subtracted
27         under subparagraph (N), an amount equal to the sum of
28         all amounts disallowed as deductions by (i) Sections
29         171(a) (2), and 265(2) of the Internal Revenue Code of
30         1954, as now or hereafter amended, and all amounts of
31         expenses allocable to interest and disallowed as
32         deductions by Section 265(1) of the Internal Revenue
33         Code of 1954, as now or hereafter amended; and (ii) for
34         taxable years ending on or after August 13, 1999,

 

 

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1         Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
2         the Internal Revenue Code; the provisions of this
3         subparagraph are exempt from the provisions of Section
4         250;
5             (N) An amount equal to all amounts included in such
6         total which are exempt from taxation by this State
7         either by reason of its statutes or Constitution or by
8         reason of the Constitution, treaties or statutes of the
9         United States; provided that, in the case of any
10         statute of this State or of the United States, any
11         treaty of the United States, the Illinois
12         Constitution, or the United States Constitution that
13         exempts income derived from bonds or other obligations
14         from the tax imposed under this Act, the amount
15         exempted shall be the income interest net of bond
16         premium amortization, interest expense incurred on
17         indebtedness to carry the bond or other obligation,
18         expenses incurred in producing the income to be
19         deducted, and all other related expenses. The amount of
20         expenses to be taken into account under this provision
21         may not exceed the amount of income that is exempted;
22             (O) An amount equal to any contribution made to a
23         job training project established pursuant to the Tax
24         Increment Allocation Redevelopment Act;
25             (P) An amount equal to the amount of the deduction
26         used to compute the federal income tax credit for
27         restoration of substantial amounts held under claim of
28         right for the taxable year pursuant to Section 1341 of
29         the Internal Revenue Code of 1986;
30             (Q) An amount equal to any amounts included in such
31         total, received by the taxpayer as an acceleration in
32         the payment of life, endowment or annuity benefits in
33         advance of the time they would otherwise be payable as
34         an indemnity for a terminal illness;

 

 

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1             (R) An amount equal to the amount of any federal or
2         State bonus paid to veterans of the Persian Gulf War;
3             (S) An amount, to the extent included in adjusted
4         gross income, equal to the amount of a contribution
5         made in the taxable year on behalf of the taxpayer to a
6         medical care savings account established under the
7         Medical Care Savings Account Act or the Medical Care
8         Savings Account Act of 2000 to the extent the
9         contribution is accepted by the account administrator
10         as provided in that Act;
11             (T) An amount, to the extent included in adjusted
12         gross income, equal to the amount of interest earned in
13         the taxable year on a medical care savings account
14         established under the Medical Care Savings Account Act
15         or the Medical Care Savings Account Act of 2000 on
16         behalf of the taxpayer, other than interest added
17         pursuant to item (D-5) of this paragraph (2);
18             (U) For one taxable year beginning on or after
19         January 1, 1994, an amount equal to the total amount of
20         tax imposed and paid under subsections (a) and (b) of
21         Section 201 of this Act on grant amounts received by
22         the taxpayer under the Nursing Home Grant Assistance
23         Act during the taxpayer's taxable years 1992 and 1993;
24             (V) Beginning with tax years ending on or after
25         December 31, 1995 and ending with tax years ending on
26         or before December 31, 2004, an amount equal to the
27         amount paid by a taxpayer who is a self-employed
28         taxpayer, a partner of a partnership, or a shareholder
29         in a Subchapter S corporation for health insurance or
30         long-term care insurance for that taxpayer or that
31         taxpayer's spouse or dependents, to the extent that the
32         amount paid for that health insurance or long-term care
33         insurance may be deducted under Section 213 of the
34         Internal Revenue Code of 1986, has not been deducted on

 

 

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

 

 

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1         during, and immediately after World War II, including,
2         but not limited to, interest on the proceeds receivable
3         as insurance under policies issued to a victim of
4         persecution for racial or religious reasons by Nazi
5         Germany or any other Axis regime by European insurance
6         companies immediately prior to and during World War II;
7         provided, however, this subtraction from federal
8         adjusted gross income does not apply to assets acquired
9         with such assets or with the proceeds from the sale of
10         such assets; provided, further, this paragraph shall
11         only apply to a taxpayer who was the first recipient of
12         such assets after their recovery and who is a victim of
13         persecution for racial or religious reasons by Nazi
14         Germany or any other Axis regime or as an heir of the
15         victim. The amount of and the eligibility for any
16         public assistance, benefit, or similar entitlement is
17         not affected by the inclusion of items (i) and (ii) of
18         this paragraph in gross income for federal income tax
19         purposes. This paragraph is exempt from the provisions
20         of Section 250;
21             (Y) For taxable years beginning on or after January
22         1, 2002, moneys contributed in the taxable year to a
23         College Savings Pool account under Section 16.5 of the
24         State Treasurer Act, except that amounts excluded from
25         gross income under Section 529(c)(3)(C)(i) of the
26         Internal Revenue Code shall not be considered moneys
27         contributed under this subparagraph (Y). This
28         subparagraph (Y) is exempt from the provisions of
29         Section 250;
30             (Z) For taxable years 2001 and thereafter, for the
31         taxable year in which the bonus depreciation deduction
32         (30% of the adjusted basis of the qualified property)
33         is taken on the taxpayer's federal income tax return
34         under subsection (k) of Section 168 of the Internal

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1         (ii) for taxable years ending on or after August 13,
2         1999, Sections 171(a)(2), 265, 280C, 291(a)(3), and
3         832(b)(5)(B)(i) of the Internal Revenue Code; the
4         provisions of this subparagraph are exempt from the
5         provisions of Section 250;
6             (J) An amount equal to all amounts included in such
7         total which are exempt from taxation by this State
8         either by reason of its statutes or Constitution or by
9         reason of the Constitution, treaties or statutes of the
10         United States; provided that, in the case of any
11         statute of this State or of the United States, any
12         treaty of the United States, the Illinois
13         Constitution, or the United States Constitution that
14         exempts income derived from bonds or other obligations
15         from the tax imposed under this Act, the amount
16         exempted shall be the income interest net of bond
17         premium amortization, interest expense incurred on
18         indebtedness to carry the bond or other obligation,
19         expenses incurred in producing the income to be
20         deducted, and all other related expenses. The amount of
21         expenses to be taken into account under this provision
22         may not exceed the amount of income that is exempted;
23             (K) An amount equal to those dividends included in
24         such total which were paid by a corporation which
25         conducts business operations in an Enterprise Zone or
26         zones created under the Illinois Enterprise Zone Act
27         and conducts substantially all of its operations in an
28         Enterprise Zone or zones;
29             (L) An amount equal to those dividends included in
30         such total that were paid by a corporation that
31         conducts business operations in a federally designated
32         Foreign Trade Zone or Sub-Zone and that is designated a
33         High Impact Business located in Illinois; provided
34         that dividends eligible for the deduction provided in

 

 

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1         subparagraph (K) of paragraph 2 of this subsection
2         shall not be eligible for the deduction provided under
3         this subparagraph (L);
4             (M) For any taxpayer that is a financial
5         organization within the meaning of Section 304(c) of
6         this Act, an amount included in such total as interest
7         income from a loan or loans made by such taxpayer to a
8         borrower, to the extent that such a loan is secured by
9         property which is eligible for the Enterprise Zone
10         Investment Credit. To determine the portion of a loan
11         or loans that is secured by property eligible for a
12         Section 201(f) investment credit to the borrower, the
13         entire principal amount of the loan or loans between
14         the taxpayer and the borrower should be divided into
15         the basis of the Section 201(f) investment credit
16         property which secures the loan or loans, using for
17         this purpose the original basis of such property on the
18         date that it was placed in service in the Enterprise
19         Zone. The subtraction modification available to
20         taxpayer in any year under this subsection shall be
21         that portion of the total interest paid by the borrower
22         with respect to such loan attributable to the eligible
23         property as calculated under the previous sentence;
24             (M-1) For any taxpayer that is a financial
25         organization within the meaning of Section 304(c) of
26         this Act, an amount included in such total as interest
27         income from a loan or loans made by such taxpayer to a
28         borrower, to the extent that such a loan is secured by
29         property which is eligible for the High Impact Business
30         Investment Credit. To determine the portion of a loan
31         or loans that is secured by property eligible for a
32         Section 201(h) investment credit to the borrower, the
33         entire principal amount of the loan or loans between
34         the taxpayer and the borrower should be divided into

 

 

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1         the basis of the Section 201(h) investment credit
2         property which secures the loan or loans, using for
3         this purpose the original basis of such property on the
4         date that it was placed in service in a federally
5         designated Foreign Trade Zone or Sub-Zone located in
6         Illinois. No taxpayer that is eligible for the
7         deduction provided in subparagraph (M) of paragraph
8         (2) of this subsection shall be eligible for the
9         deduction provided under this subparagraph (M-1). The
10         subtraction modification available to taxpayers in any
11         year under this subsection shall be that portion of the
12         total interest paid by the borrower with respect to
13         such loan attributable to the eligible property as
14         calculated under the previous sentence;
15             (N) Two times any contribution made during the
16         taxable year to a designated zone organization to the
17         extent that the contribution (i) qualifies as a
18         charitable contribution under subsection (c) of
19         Section 170 of the Internal Revenue Code and (ii) must,
20         by its terms, be used for a project approved by the
21         Department of Commerce and Economic Opportunity
22         Community Affairs under Section 11 of the Illinois
23         Enterprise Zone Act;
24             (O) An amount equal to: (i) 85% for taxable years
25         ending on or before December 31, 1992, or, a percentage
26         equal to the percentage allowable under Section
27         243(a)(1) of the Internal Revenue Code of 1986 for
28         taxable years ending after December 31, 1992, of the
29         amount by which dividends included in taxable income
30         and received from a corporation that is not created or
31         organized under the laws of the United States or any
32         state or political subdivision thereof, including, for
33         taxable years ending on or after December 31, 1988,
34         dividends received or deemed received or paid or deemed

 

 

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1         paid under Sections 951 through 964 of the Internal
2         Revenue Code, exceed the amount of the modification
3         provided under subparagraph (G) of paragraph (2) of
4         this 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, 1988,
8         dividends received or deemed received or paid or deemed
9         paid under Sections 951 through 964 of the Internal
10         Revenue Code, from any such corporation specified in
11         clause (i) that would but for the provisions of Section
12         1504 (b) (3) of the Internal Revenue Code be treated as
13         a member of the affiliated group which includes the
14         dividend recipient, exceed the amount of the
15         modification provided under subparagraph (G) of
16         paragraph (2) of this subsection (b) which is related
17         to such dividends;
18             (P) An amount equal to any contribution made to a
19         job training project established pursuant to the Tax
20         Increment Allocation Redevelopment Act;
21             (Q) An amount equal to the amount of the deduction
22         used to compute the federal income tax credit for
23         restoration of substantial amounts held under claim of
24         right for the taxable year pursuant to Section 1341 of
25         the Internal Revenue Code of 1986;
26             (R) In the case of an attorney-in-fact with respect
27         to whom an interinsurer or a reciprocal insurer has
28         made the election under Section 835 of the Internal
29         Revenue Code, 26 U.S.C. 835, an amount equal to the
30         excess, if any, of the amounts paid or incurred by that
31         interinsurer or reciprocal insurer in the taxable year
32         to the attorney-in-fact over the deduction allowed to
33         that interinsurer or reciprocal insurer with respect
34         to the attorney-in-fact under Section 835(b) of the

 

 

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1         Internal Revenue Code for the taxable year;
2             (S) For taxable years ending on or after December
3         31, 1997, in the case of a Subchapter S corporation, an
4         amount equal to all amounts of income allocable to a
5         shareholder subject to the Personal Property Tax
6         Replacement Income Tax imposed by subsections (c) and
7         (d) of Section 201 of this Act, including amounts
8         allocable to organizations exempt from federal income
9         tax by reason of Section 501(a) of the Internal Revenue
10         Code. This subparagraph (S) is exempt from the
11         provisions of Section 250;
12             (T) For taxable years 2001 and thereafter, for the
13         taxable year in which the bonus depreciation deduction
14         (30% of the adjusted basis of the qualified property)
15         is taken on the taxpayer's federal income tax return
16         under subsection (k) of Section 168 of the Internal
17         Revenue Code and for each applicable taxable year
18         thereafter, an amount equal to "x", where:
19                 (1) "y" equals the amount of the depreciation
20             deduction taken for the taxable year on the
21             taxpayer's federal income tax return on property
22             for which the bonus depreciation deduction (30% of
23             the adjusted basis of the qualified property) was
24             taken in any year under subsection (k) of Section
25             168 of the Internal Revenue Code, but not including
26             the bonus depreciation deduction; and
27                 (2) "x" equals "y" multiplied by 30 and then
28             divided by 70 (or "y" multiplied by 0.429).
29             The aggregate amount deducted under this
30         subparagraph in all taxable years for any one piece of
31         property may not exceed the amount of the bonus
32         depreciation deduction (30% of the adjusted basis of
33         the qualified property) taken on that property on the
34         taxpayer's federal income tax return under subsection

 

 

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1         (k) of Section 168 of the Internal Revenue Code; and
2             (U) If the taxpayer reports a capital gain or loss
3         on the taxpayer's federal income tax return for the
4         taxable year based on a sale or transfer of property
5         for which the taxpayer was required in any taxable year
6         to make an addition modification under subparagraph
7         (E-10), then an amount equal to that addition
8         modification.
9             The taxpayer is allowed to take the deduction under
10         this subparagraph only once with respect to any one
11         piece of property.
12         (3) Special rule. For purposes of paragraph (2) (A),
13     "gross income" in the case of a life insurance company, for
14     tax years ending on and after December 31, 1994, shall mean
15     the gross investment income for the taxable year.
 
16     (c) Trusts and estates.
17         (1) In general. In the case of a trust or estate, base
18     income means an amount equal to the taxpayer's taxable
19     income for the taxable year as modified by paragraph (2).
20         (2) Modifications. Subject to the provisions of
21     paragraph (3), the taxable income referred to in paragraph
22     (1) shall be modified by adding thereto the sum of the
23     following amounts:
24             (A) An amount equal to all amounts paid or accrued
25         to the taxpayer as interest or dividends during the
26         taxable year to the extent excluded from gross income
27         in the computation of taxable income;
28             (B) In the case of (i) an estate, $600; (ii) a
29         trust which, under its governing instrument, is
30         required to distribute all of its income currently,
31         $300; and (iii) any other trust, $100, but in each such
32         case, only to the extent such amount was deducted in
33         the computation of taxable income;

 

 

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1             (C) An amount equal to the amount of tax imposed by
2         this Act to the extent deducted from gross income in
3         the computation of taxable income for the taxable year;
4             (D) The amount of any net operating loss deduction
5         taken in arriving at taxable income, other than a net
6         operating loss carried forward from a taxable year
7         ending prior to December 31, 1986;
8             (E) For taxable years in which a net operating loss
9         carryback or carryforward from a taxable year ending
10         prior to December 31, 1986 is an element of taxable
11         income under paragraph (1) of subsection (e) or
12         subparagraph (E) of paragraph (2) of subsection (e),
13         the amount by which addition modifications other than
14         those provided by this subparagraph (E) exceeded
15         subtraction modifications in such taxable year, with
16         the following limitations applied in the order that
17         they are listed:
18                 (i) the addition modification relating to the
19             net operating loss carried back or forward to the
20             taxable year from any taxable year ending prior to
21             December 31, 1986 shall be reduced by the amount of
22             addition modification under this subparagraph (E)
23             which related to that net operating loss and which
24             was taken into account in calculating the base
25             income of an earlier taxable year, and
26                 (ii) the addition modification relating to the
27             net operating loss carried back or forward to the
28             taxable year from any taxable year ending prior to
29             December 31, 1986 shall not exceed the amount of
30             such carryback or carryforward;
31             For taxable years in which there is a net operating
32         loss carryback or carryforward from more than one other
33         taxable year ending prior to December 31, 1986, the
34         addition modification provided in this subparagraph

 

 

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1         (E) shall be the sum of the amounts computed
2         independently under the preceding provisions of this
3         subparagraph (E) for each such taxable year;
4             (F) For taxable years ending on or after January 1,
5         1989, an amount equal to the tax deducted pursuant to
6         Section 164 of the Internal Revenue Code if the trust
7         or estate is claiming the same tax for purposes of the
8         Illinois foreign tax credit under Section 601 of this
9         Act;
10             (G) An amount equal to the amount of the capital
11         gain deduction allowable under the Internal Revenue
12         Code, to the extent deducted from gross income in the
13         computation of taxable income;
14             (G-5) For taxable years ending after December 31,
15         1997, an amount equal to any eligible remediation costs
16         that the trust or estate deducted in computing adjusted
17         gross income and for which the trust or estate claims a
18         credit under subsection (l) of Section 201;
19             (G-10) For taxable years 2001 and thereafter, an
20         amount equal to the bonus depreciation deduction (30%
21         of the adjusted basis of the qualified property) taken
22         on the taxpayer's federal income tax return for the
23         taxable year under subsection (k) of Section 168 of the
24         Internal Revenue Code; and
25             (G-11) If the taxpayer reports a capital gain or
26         loss on the taxpayer's federal income tax return for
27         the taxable year based on a sale or transfer of
28         property for which the taxpayer was required in any
29         taxable year to make an addition modification under
30         subparagraph (G-10), then an amount equal to the
31         aggregate amount of the deductions taken in all taxable
32         years under subparagraph (R) with respect to that
33         property. ;
34             The taxpayer is required to make the addition

 

 

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1         modification under this subparagraph only once with
2         respect to any one piece of property;
3     and by deducting from the total so obtained the sum of the
4     following amounts:
5             (H) An amount equal to all amounts included in such
6         total pursuant to the provisions of Sections 402(a),
7         402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
8         Internal Revenue Code or included in such total as
9         distributions under the provisions of any retirement
10         or disability plan for employees of any governmental
11         agency or unit, or retirement payments to retired
12         partners, which payments are excluded in computing net
13         earnings from self employment by Section 1402 of the
14         Internal Revenue Code and regulations adopted pursuant
15         thereto;
16             (I) The valuation limitation amount;
17             (J) An amount equal to the amount of any tax
18         imposed by this Act which was refunded to the taxpayer
19         and included in such total for the taxable year;
20             (K) An amount equal to all amounts included in
21         taxable income as modified by subparagraphs (A), (B),
22         (C), (D), (E), (F) and (G) which are exempt from
23         taxation by this State either by reason of its statutes
24         or Constitution or by reason of the Constitution,
25         treaties or statutes of the United States; provided
26         that, in the case of any statute of this State or of
27         the United States, any treaty of the United States, the
28         Illinois Constitution, or the United States
29         Constitution that exempts income derived from bonds or
30         other obligations from the tax imposed under this Act,
31         the amount exempted shall be the income interest net of
32         bond premium amortization, interest expense incurred
33         on indebtedness to carry the bond or other obligation,
34         expenses incurred in producing the income to be

 

 

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

 

 

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

 

 

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1         not affected by the inclusion of items (i) and (ii) of
2         this paragraph in gross income for federal income tax
3         purposes. This paragraph is exempt from the provisions
4         of Section 250;
5             (R) For taxable years 2001 and thereafter, for the
6         taxable year in which the bonus depreciation deduction
7         (30% of the adjusted basis of the qualified property)
8         is taken on the taxpayer's federal income tax return
9         under subsection (k) of Section 168 of the Internal
10         Revenue Code and for each applicable taxable year
11         thereafter, an amount equal to "x", where:
12                 (1) "y" equals the amount of the depreciation
13             deduction taken for the taxable year on the
14             taxpayer's federal income tax return on property
15             for which the bonus depreciation deduction (30% of
16             the adjusted basis of the qualified property) was
17             taken in any year under subsection (k) of Section
18             168 of the Internal Revenue Code, but not including
19             the bonus depreciation deduction; and
20                 (2) "x" equals "y" multiplied by 30 and then
21             divided by 70 (or "y" multiplied by 0.429).
22             The aggregate amount deducted under this
23         subparagraph in all taxable years for any one piece of
24         property may not exceed the amount of the bonus
25         depreciation deduction (30% of the adjusted basis of
26         the qualified property) taken on that property on the
27         taxpayer's federal income tax return under subsection
28         (k) of Section 168 of the Internal Revenue Code; and
29             (S) If the taxpayer reports a capital gain or loss
30         on the taxpayer's federal income tax return for the
31         taxable year based on a sale or transfer of property
32         for which the taxpayer was required in any taxable year
33         to make an addition modification under subparagraph
34         (G-10), then an amount equal to that addition

 

 

09300SB2206ham001 - 26 - LRB093 15832 BDD 50827 a

1         modification.
2             The taxpayer is allowed to take the deduction under
3         this subparagraph only once with respect to any one
4         piece of property.
5         (3) Limitation. The amount of any modification
6     otherwise required under this subsection shall, under
7     regulations prescribed by the Department, be adjusted by
8     any amounts included therein which were properly paid,
9     credited, or required to be distributed, or permanently set
10     aside for charitable purposes pursuant to Internal Revenue
11     Code Section 642(c) during the taxable year.
 
12     (d) Partnerships.
13         (1) In general. In the case of a partnership, base
14     income means an amount equal to the taxpayer's taxable
15     income for the taxable year as modified by paragraph (2).
16         (2) Modifications. The taxable income referred to in
17     paragraph (1) shall be modified by adding thereto the sum
18     of the following amounts:
19             (A) An amount equal to all amounts paid or accrued
20         to the taxpayer as interest or dividends during the
21         taxable year to the extent excluded from gross income
22         in the computation of taxable income;
23             (B) An amount equal to the amount of tax imposed by
24         this Act to the extent deducted from gross income for
25         the taxable year;
26             (C) The amount of deductions allowed to the
27         partnership pursuant to Section 707 (c) of the Internal
28         Revenue Code in calculating its taxable income;
29             (D) An amount equal to the amount of the capital
30         gain deduction allowable under the Internal Revenue
31         Code, to the extent deducted from gross income in the
32         computation of taxable income;
33             (D-5) For taxable years 2001 and thereafter, an

 

 

09300SB2206ham001 - 27 - LRB093 15832 BDD 50827 a

1         amount equal to the bonus depreciation deduction (30%
2         of the adjusted basis of the qualified property) taken
3         on the taxpayer's federal income tax return for the
4         taxable year under subsection (k) of Section 168 of the
5         Internal Revenue Code; and
6             (D-6) If the taxpayer reports a capital gain or
7         loss on the taxpayer's federal income tax return for
8         the taxable year based on a sale or transfer of
9         property for which the taxpayer was required in any
10         taxable year to make an addition modification under
11         subparagraph (D-5), then an amount equal to the
12         aggregate amount of the deductions taken in all taxable
13         years under subparagraph (O) with respect to that
14         property. ;
15             The taxpayer is required to make the addition
16         modification under this subparagraph only once with
17         respect to any one piece of property;
18     and by deducting from the total so obtained the following
19     amounts:
20             (E) The valuation limitation amount;
21             (F) An amount equal to the amount of any tax
22         imposed by this Act which was refunded to the taxpayer
23         and included in such total for the taxable year;
24             (G) An amount equal to all amounts included in
25         taxable income as modified by subparagraphs (A), (B),
26         (C) and (D) which are exempt from taxation by this
27         State either by reason of its statutes or Constitution
28         or by reason of the Constitution, treaties or statutes
29         of the United States; provided that, in the case of any
30         statute of this State or of the United States, any
31         treaty of the United States, the Illinois
32         Constitution, or the United States Constitution that
33         exempts income derived from bonds or other obligations
34         from the tax imposed under this Act, the amount

 

 

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1         exempted shall be the income interest net of bond
2         premium amortization, interest expense incurred on
3         indebtedness to carry the bond or other obligation,
4         expenses incurred in producing the income to be
5         deducted, and all other related expenses. The amount of
6         expenses to be taken into account under this provision
7         may not exceed the amount of income that is exempted;
8             (H) Any income of the partnership which
9         constitutes personal service income as defined in
10         Section 1348 (b) (1) of the Internal Revenue Code (as
11         in effect December 31, 1981) or a reasonable allowance
12         for compensation paid or accrued for services rendered
13         by partners to the partnership, whichever is greater;
14             (I) An amount equal to all amounts of income
15         distributable to an entity subject to the Personal
16         Property Tax Replacement Income Tax imposed by
17         subsections (c) and (d) of Section 201 of this Act
18         including amounts distributable to organizations
19         exempt from federal income tax by reason of Section
20         501(a) of the Internal Revenue Code;
21             (J) With the exception of any amounts subtracted
22         under subparagraph (G), an amount equal to the sum of
23         all amounts disallowed as deductions by (i) Sections
24         171(a) (2), and 265(2) of the Internal Revenue Code of
25         1954, as now or hereafter amended, and all amounts of
26         expenses allocable to interest and disallowed as
27         deductions by Section 265(1) of the Internal Revenue
28         Code, as now or hereafter amended; and (ii) for taxable
29         years ending on or after August 13, 1999, Sections
30         171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
31         Internal Revenue Code; the provisions of this
32         subparagraph are exempt from the provisions of Section
33         250;
34             (K) An amount equal to those dividends included in

 

 

09300SB2206ham001 - 29 - LRB093 15832 BDD 50827 a

1         such total which were paid by a corporation which
2         conducts business operations in an Enterprise Zone or
3         zones created under the Illinois Enterprise Zone Act,
4         enacted by the 82nd General Assembly, and conducts
5         substantially all of its operations in an Enterprise
6         Zone or Zones;
7             (L) An amount equal to any contribution made to a
8         job training project established pursuant to the Real
9         Property Tax Increment Allocation Redevelopment Act;
10             (M) An amount equal to those dividends included in
11         such total that were paid by a corporation that
12         conducts business operations in a federally designated
13         Foreign Trade Zone or Sub-Zone and that is designated a
14         High Impact Business located in Illinois; provided
15         that dividends eligible for the deduction provided in
16         subparagraph (K) of paragraph (2) of this subsection
17         shall not be eligible for the deduction provided under
18         this subparagraph (M);
19             (N) An amount equal to the amount of the deduction
20         used to compute the federal income tax credit for
21         restoration of substantial amounts held under claim of
22         right for the taxable year pursuant to Section 1341 of
23         the Internal Revenue Code of 1986;
24             (O) For taxable years 2001 and thereafter, for the
25         taxable year in which the bonus depreciation deduction
26         (30% of the adjusted basis of the qualified property)
27         is taken on the taxpayer's federal income tax return
28         under subsection (k) of Section 168 of the Internal
29         Revenue Code and for each applicable taxable year
30         thereafter, an amount equal to "x", where:
31                 (1) "y" equals the amount of the depreciation
32             deduction taken for the taxable year on the
33             taxpayer's federal income tax return on property
34             for which the bonus depreciation deduction (30% of

 

 

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1             the adjusted basis of the qualified property) was
2             taken in any year under subsection (k) of Section
3             168 of the Internal Revenue Code, but not including
4             the bonus depreciation deduction; and
5                 (2) "x" equals "y" multiplied by 30 and then
6             divided by 70 (or "y" multiplied by 0.429).
7             The aggregate amount deducted under this
8         subparagraph in all taxable years for any one piece of
9         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 the
12         taxpayer's federal income tax return under subsection
13         (k) of Section 168 of the Internal Revenue Code; and
14             (P) If the taxpayer reports a capital gain or loss
15         on the taxpayer's federal income tax return for the
16         taxable year based on a sale or transfer of property
17         for which the taxpayer was required in any taxable year
18         to make an addition modification under subparagraph
19         (D-5), then an amount equal to that addition
20         modification.
21             The taxpayer is allowed to take the deduction under
22         this subparagraph only once with respect to any one
23         piece of property.
 
24     (e) Gross income; adjusted gross income; taxable income.
25         (1) In general. Subject to the provisions of paragraph
26     (2) and subsection (b) (3), for purposes of this Section
27     and Section 803(e), a taxpayer's gross income, adjusted
28     gross income, or taxable income for the taxable year shall
29     mean the amount of gross income, adjusted gross income or
30     taxable income properly reportable for federal income tax
31     purposes for the taxable year under the provisions of the
32     Internal Revenue Code. Taxable income may be less than
33     zero. However, for taxable years ending on or after

 

 

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1     December 31, 1986, net operating loss carryforwards from
2     taxable years ending prior to December 31, 1986, may not
3     exceed the sum of federal taxable income for the taxable
4     year before net operating loss deduction, plus the excess
5     of addition modifications over subtraction modifications
6     for the taxable year. For taxable years ending prior to
7     December 31, 1986, taxable income may never be an amount in
8     excess of the net operating loss for the taxable year as
9     defined in subsections (c) and (d) of Section 172 of the
10     Internal Revenue Code, provided that when taxable income of
11     a corporation (other than a Subchapter S corporation),
12     trust, or estate is less than zero and addition
13     modifications, other than those provided by subparagraph
14     (E) of paragraph (2) of subsection (b) for corporations or
15     subparagraph (E) of paragraph (2) of subsection (c) for
16     trusts and estates, exceed subtraction modifications, an
17     addition modification must be made under those
18     subparagraphs for any other taxable year to which the
19     taxable income less than zero (net operating loss) is
20     applied under Section 172 of the Internal Revenue Code or
21     under subparagraph (E) of paragraph (2) of this subsection
22     (e) applied in conjunction with Section 172 of the Internal
23     Revenue Code.
24         (2) Special rule. For purposes of paragraph (1) of this
25     subsection, the taxable income properly reportable for
26     federal income tax purposes shall mean:
27             (A) Certain life insurance companies. In the case
28         of a life insurance company subject to the tax imposed
29         by Section 801 of the Internal Revenue Code, life
30         insurance company taxable income, plus the amount of
31         distribution from pre-1984 policyholder surplus
32         accounts as calculated under Section 815a of the
33         Internal Revenue Code;
34             (B) Certain other insurance companies. In the case

 

 

09300SB2206ham001 - 32 - LRB093 15832 BDD 50827 a

1         of mutual insurance companies subject to the tax
2         imposed by Section 831 of the Internal Revenue Code,
3         insurance company taxable income;
4             (C) Regulated investment companies. In the case of
5         a regulated investment company subject to the tax
6         imposed by Section 852 of the Internal Revenue Code,
7         investment company taxable income;
8             (D) Real estate investment trusts. In the case of a
9         real estate investment trust subject to the tax imposed
10         by Section 857 of the Internal Revenue Code, real
11         estate investment trust taxable income;
12             (E) Consolidated corporations. In the case of a
13         corporation which is a member of an affiliated group of
14         corporations filing a consolidated income tax return
15         for the taxable year for federal income tax purposes,
16         taxable income determined as if such corporation had
17         filed a separate return for federal income tax purposes
18         for the taxable year and each preceding taxable year
19         for which it was a member of an affiliated group. For
20         purposes of this subparagraph, the taxpayer's separate
21         taxable income shall be determined as if the election
22         provided by Section 243(b) (2) of the Internal Revenue
23         Code had been in effect for all such years;
24             (F) Cooperatives. In the case of a cooperative
25         corporation or association, the taxable income of such
26         organization determined in accordance with the
27         provisions of Section 1381 through 1388 of the Internal
28         Revenue Code;
29             (G) Subchapter S corporations. In the case of: (i)
30         a Subchapter S corporation for which there is in effect
31         an election for the taxable year under Section 1362 of
32         the Internal Revenue Code, the taxable income of such
33         corporation determined in accordance with Section
34         1363(b) of the Internal Revenue Code, except that

 

 

09300SB2206ham001 - 33 - LRB093 15832 BDD 50827 a

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

 

 

09300SB2206ham001 - 34 - LRB093 15832 BDD 50827 a

1         subsection (a) (2) (F) or (c) (2) (H).
2         (2) Pre-August 1, 1969 appreciation amount.
3             (A) If the fair market value of property referred
4         to in paragraph (1) was readily ascertainable on August
5         1, 1969, the pre-August 1, 1969 appreciation amount for
6         such property is the lesser of (i) the excess of such
7         fair market value over the taxpayer's basis (for
8         determining gain) for such property on that date
9         (determined under the Internal Revenue Code as in
10         effect on that date), or (ii) the total gain realized
11         and reportable for federal income tax purposes in
12         respect of the sale, exchange or other disposition of
13         such property.
14             (B) If the fair market value of property referred
15         to in paragraph (1) was not readily ascertainable on
16         August 1, 1969, the pre-August 1, 1969 appreciation
17         amount for such property is that amount which bears the
18         same ratio to the total gain reported in respect of the
19         property for federal income tax purposes for the
20         taxable year, as the number of full calendar months in
21         that part of the taxpayer's holding period for the
22         property ending July 31, 1969 bears to the number of
23         full calendar months in the taxpayer's entire holding
24         period for the property.
25             (C) The Department shall prescribe such
26         regulations as may be necessary to carry out the
27         purposes of this paragraph.
 
28     (g) Double deductions. Unless specifically provided
29 otherwise, nothing in this Section shall permit the same item
30 to be deducted more than once.
 
31     (h) Legislative intention. Except as expressly provided by
32 this Section there shall be no modifications or limitations on

 

 

09300SB2206ham001 - 35 - LRB093 15832 BDD 50827 a

1 the amounts of income, gain, loss or deduction taken into
2 account in determining gross income, adjusted gross income or
3 taxable income for federal income tax purposes for the taxable
4 year, or in the amount of such items entering into the
5 computation of base income and net income under this Act for
6 such taxable year, whether in respect of property values as of
7 August 1, 1969 or otherwise.
8 (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99;
9 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676, eff.
10 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01; 92-16,
11 eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff. 8-17-01;
12 92-603, eff. 6-28-02; 92-626, eff. 7-11-02; 92-651, eff.
13 7-11-02; 92-846, eff. 8-23-02; revised 10-15-03.)".