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093_HB0863sam002
LRB093 05711 SJM 20212 a
1 AMENDMENT TO HOUSE BILL 863
2 AMENDMENT NO. . Amend House Bill 863 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
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;
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1 (B) An amount equal to the amount of tax
2 imposed by this Act to the extent deducted from
3 gross income in the computation of adjusted gross
4 income for the taxable year;
5 (C) An amount equal to the amount received
6 during the taxable year as a recovery or refund of
7 real property taxes paid with respect to the
8 taxpayer's principal residence under the Revenue Act
9 of 1939 and for which a deduction was previously
10 taken under subparagraph (L) of this paragraph (2)
11 prior to July 1, 1991, the retrospective application
12 date of Article 4 of Public Act 87-17. In the case
13 of multi-unit or multi-use structures and farm
14 dwellings, the taxes on the taxpayer's principal
15 residence shall be that portion of the total taxes
16 for the entire property which is attributable to
17 such principal residence;
18 (D) An amount equal to the amount of the
19 capital gain deduction allowable under the Internal
20 Revenue Code, to the extent deducted from gross
21 income in the computation of adjusted gross income;
22 (D-5) An amount, to the extent not included in
23 adjusted gross income, equal to the amount of money
24 withdrawn by the taxpayer in the taxable year from a
25 medical care savings account and the interest earned
26 on the account in the taxable year of a withdrawal
27 pursuant to subsection (b) of Section 20 of the
28 Medical Care Savings Account Act or subsection (b)
29 of Section 20 of the Medical Care Savings Account
30 Act of 2000;
31 (D-10) For taxable years ending after December
32 31, 1997, an amount equal to any eligible
33 remediation costs that the individual deducted in
34 computing adjusted gross income and for which the
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1 individual claims a credit under subsection (l) of
2 Section 201;
3 (D-15) For taxable years ending after December
4 31, 20002001 and thereafter, an amount equal to the
5 bonus depreciation deduction (30% or 50% of the
6 adjusted basis of the qualified property) taken on
7 the taxpayer's federal income tax return for the
8 taxable year under subsection (k) of Section 168 of
9 the Internal Revenue Code with respect to any
10 property and, for taxable years ending on or after
11 December 31, 2003, an amount equal to any deduction
12 taken for the taxable year under Section 179 of the
13 Internal Revenue Code with respect to any property;
14 and
15 (D-16) If the taxpayer reports a capital gain
16 or loss on the taxpayer's federal income tax return
17 for the taxable year based on a sale or transfer of
18 property for which the taxpayer was required in any
19 taxable year to make an addition modification under
20 subparagraph (D-15), then an amount equal to the
21 aggregate amount of the deductions taken in all
22 taxable years under subparagraph (Z) or (Z-1) with
23 respect to that property.;
24 The taxpayer is required to make the addition
25 modification under this subparagraph only once with
26 respect to any one piece of property;. and
27 (D-20)(D-15) For taxable years beginning on
28 or after January 1, 2002, in the case of a
29 distribution from a qualified tuition program under
30 Section 529 of the Internal Revenue Code, other than
31 (i) a distribution from a College Savings Pool
32 created under Section 16.5 of the State Treasurer
33 Act or (ii) a distribution from the Illinois Prepaid
34 Tuition Trust Fund, an amount equal to the amount
-4- LRB093 05711 SJM 20212 a
1 excluded from gross income under Section
2 529(c)(3)(B);
3 and by deducting from the total so obtained the sum of
4 the following amounts:
5 (E) For taxable years ending before December
6 31, 2001, any amount included in such total in
7 respect of any compensation (including but not
8 limited to any compensation paid or accrued to a
9 serviceman while a prisoner of war or missing in
10 action) paid to a resident by reason of being on
11 active duty in the Armed Forces of the United States
12 and in respect of any compensation paid or accrued
13 to a resident who as a governmental employee was a
14 prisoner of war or missing in action, and in respect
15 of any compensation paid to a resident in 1971 or
16 thereafter for annual training performed pursuant to
17 Sections 502 and 503, Title 32, United States Code
18 as a member of the Illinois National Guard. For
19 taxable years ending on or after December 31, 2001,
20 any amount included in such total in respect of any
21 compensation (including but not limited to any
22 compensation paid or accrued to a serviceman while a
23 prisoner of war or missing in action) paid to a
24 resident by reason of being a member of any
25 component of the Armed Forces of the United States
26 and in respect of any compensation paid or accrued
27 to a resident who as a governmental employee was a
28 prisoner of war or missing in action, and in respect
29 of any compensation paid to a resident in 2001 or
30 thereafter by reason of being a member of the
31 Illinois National Guard. The provisions of this
32 amendatory Act of the 92nd General Assembly are
33 exempt from the provisions of Section 250;
34 (F) An amount equal to all amounts included in
-5- LRB093 05711 SJM 20212 a
1 such total pursuant to the provisions of Sections
2 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
3 408 of the Internal Revenue Code, or included in
4 such total as distributions under the provisions of
5 any retirement or disability plan for employees of
6 any governmental agency or unit, or retirement
7 payments to retired partners, which payments are
8 excluded in computing net earnings from self
9 employment by Section 1402 of the Internal Revenue
10 Code and regulations adopted pursuant thereto;
11 (G) The valuation limitation amount;
12 (H) An amount equal to the amount of any tax
13 imposed by this Act which was refunded to the
14 taxpayer and included in such total for the taxable
15 year;
16 (I) An amount equal to all amounts included in
17 such total pursuant to the provisions of Section 111
18 of the Internal Revenue Code as a recovery of items
19 previously deducted from adjusted gross income in
20 the computation of taxable income;
21 (J) An amount equal to those dividends
22 included in such total which were paid by a
23 corporation which conducts business operations in an
24 Enterprise Zone or zones created under the Illinois
25 Enterprise Zone Act, and conducts substantially all
26 of its operations in an Enterprise Zone or zones;
27 (K) An amount equal to those dividends
28 included in such total that were paid by a
29 corporation that conducts business operations in a
30 federally designated Foreign Trade Zone or Sub-Zone
31 and that is designated a High Impact Business
32 located in Illinois; provided that dividends
33 eligible for the deduction provided in subparagraph
34 (J) of paragraph (2) of this subsection shall not be
-6- LRB093 05711 SJM 20212 a
1 eligible for the deduction provided under this
2 subparagraph (K);
3 (L) For taxable years ending after December
4 31, 1983, an amount equal to all social security
5 benefits and railroad retirement benefits included
6 in such total pursuant to Sections 72(r) and 86 of
7 the Internal Revenue Code;
8 (M) With the exception of any amounts
9 subtracted under subparagraph (N), an amount equal
10 to the sum of all amounts disallowed as deductions
11 by (i) Sections 171(a) (2), and 265(2) of the
12 Internal Revenue Code of 1954, as now or hereafter
13 amended, and all amounts of expenses allocable to
14 interest and disallowed as deductions by Section
15 265(1) of the Internal Revenue Code of 1954, as now
16 or hereafter amended; and (ii) for taxable years
17 ending on or after August 13, 1999, Sections
18 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
19 Internal Revenue Code; the provisions of this
20 subparagraph are exempt from the provisions of
21 Section 250;
22 (N) An amount equal to all amounts included in
23 such total which are exempt from taxation by this
24 State either by reason of its statutes or
25 Constitution or by reason of the Constitution,
26 treaties or statutes of the United States; provided
27 that, in the case of any statute of this State that
28 exempts income derived from bonds or other
29 obligations from the tax imposed under this Act, the
30 amount exempted shall be the interest net of bond
31 premium amortization;
32 (O) An amount equal to any contribution made
33 to a job training project established pursuant to
34 the Tax Increment Allocation Redevelopment Act;
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1 (P) An amount equal to the amount of the
2 deduction used to compute the federal income tax
3 credit for restoration of substantial amounts held
4 under claim of right for the taxable year pursuant
5 to Section 1341 of the Internal Revenue Code of
6 1986;
7 (Q) An amount equal to any amounts included in
8 such total, received by the taxpayer as an
9 acceleration in the payment of life, endowment or
10 annuity benefits in advance of the time they would
11 otherwise be payable as an indemnity for a terminal
12 illness;
13 (R) An amount equal to the amount of any
14 federal or State bonus paid to veterans of the
15 Persian Gulf War;
16 (S) An amount, to the extent included in
17 adjusted gross income, equal to the amount of a
18 contribution made in the taxable year on behalf of
19 the taxpayer to a medical care savings account
20 established under the Medical Care Savings Account
21 Act or the Medical Care Savings Account Act of 2000
22 to the extent the contribution is accepted by the
23 account administrator as provided in that Act;
24 (T) An amount, to the extent included in
25 adjusted gross income, equal to the amount of
26 interest earned in the taxable year on a medical
27 care savings account established under the Medical
28 Care Savings Account Act or the Medical Care Savings
29 Account Act of 2000 on behalf of the taxpayer, other
30 than interest added pursuant to item (D-5) of this
31 paragraph (2);
32 (U) For one taxable year beginning on or after
33 January 1, 1994, an amount equal to the total amount
34 of tax imposed and paid under subsections (a) and
-8- LRB093 05711 SJM 20212 a
1 (b) of Section 201 of this Act on grant amounts
2 received by the taxpayer under the Nursing Home
3 Grant Assistance Act during the taxpayer's taxable
4 years 1992 and 1993;
5 (V) Beginning with tax years ending on or
6 after December 31, 1995 and ending with tax years
7 ending on or before December 31, 2004, an amount
8 equal to the amount paid by a taxpayer who is a
9 self-employed taxpayer, a partner of a partnership,
10 or a shareholder in a Subchapter S corporation for
11 health insurance or long-term care insurance for
12 that taxpayer or that taxpayer's spouse or
13 dependents, to the extent that the amount paid for
14 that health insurance or long-term care insurance
15 may be deducted under Section 213 of the Internal
16 Revenue Code of 1986, has not been deducted on the
17 federal income tax return of the taxpayer, and does
18 not exceed the taxable income attributable to that
19 taxpayer's income, self-employment income, or
20 Subchapter S corporation income; except that no
21 deduction shall be allowed under this item (V) if
22 the taxpayer is eligible to participate in any
23 health insurance or long-term care insurance plan of
24 an employer of the taxpayer or the taxpayer's
25 spouse. The amount of the health insurance and
26 long-term care insurance subtracted under this item
27 (V) shall be determined by multiplying total health
28 insurance and long-term care insurance premiums paid
29 by the taxpayer times a number that represents the
30 fractional percentage of eligible medical expenses
31 under Section 213 of the Internal Revenue Code of
32 1986 not actually deducted on the taxpayer's federal
33 income tax return;
34 (W) For taxable years beginning on or after
-9- LRB093 05711 SJM 20212 a
1 January 1, 1998, all amounts included in the
2 taxpayer's federal gross income in the taxable year
3 from amounts converted from a regular IRA to a Roth
4 IRA. This paragraph is exempt from the provisions of
5 Section 250;
6 (X) For taxable year 1999 and thereafter, an
7 amount equal to the amount of any (i) distributions,
8 to the extent includible in gross income for federal
9 income tax purposes, made to the taxpayer because of
10 his or her status as a victim of persecution for
11 racial or religious reasons by Nazi Germany or any
12 other Axis regime or as an heir of the victim and
13 (ii) items of income, to the extent includible in
14 gross income for federal income tax purposes,
15 attributable to, derived from or in any way related
16 to assets stolen from, hidden from, or otherwise
17 lost to a victim of persecution for racial or
18 religious reasons by Nazi Germany or any other Axis
19 regime immediately prior to, during, and immediately
20 after World War II, including, but not limited to,
21 interest on the proceeds receivable as insurance
22 under policies issued to a victim of persecution for
23 racial or religious reasons by Nazi Germany or any
24 other Axis regime by European insurance companies
25 immediately prior to and during World War II;
26 provided, however, this subtraction from federal
27 adjusted gross income does not apply to assets
28 acquired with such assets or with the proceeds from
29 the sale of such assets; provided, further, this
30 paragraph shall only apply to a taxpayer who was the
31 first recipient of such assets after their recovery
32 and who is a victim of persecution for racial or
33 religious reasons by Nazi Germany or any other Axis
34 regime or as an heir of the victim. The amount of
-10- LRB093 05711 SJM 20212 a
1 and the eligibility for any public assistance,
2 benefit, or similar entitlement is not affected by
3 the inclusion of items (i) and (ii) of this
4 paragraph in gross income for federal income tax
5 purposes. This paragraph is exempt from the
6 provisions of Section 250;
7 (Y) For taxable years beginning on or after
8 January 1, 2002, moneys contributed in the taxable
9 year to a College Savings Pool account under Section
10 16.5 of the State Treasurer Act, except that amounts
11 excluded from gross income under Section
12 529(c)(3)(C)(i) of the Internal Revenue Code shall
13 not be considered moneys contributed under this
14 subparagraph (Y). This subparagraph (Y) is exempt
15 from the provisions of Section 250;
16 (Z) For eachtaxable years 2001 and
17 thereafter, for the taxable year ending prior to
18 December 31, 2003 in which the bonus depreciation
19 deduction (30% or 50% 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 subsequentapplicable taxable year ending prior
24 to December 31, 2003thereafter, an amount equal to
25 "x", where:
26 (1) "y" equals the amount of the
27 depreciation deduction taken for the taxable
28 year on the taxpayer's federal income tax
29 return on property for which the bonus
30 depreciation deduction (30% or 50% of the
31 adjusted basis of the qualified property) was
32 taken in any year under subsection (k) of
33 Section 168 of the Internal Revenue Code, but
34 not including the bonus depreciation deduction;
-11- LRB093 05711 SJM 20212 a
1 and
2 (2) for property on which a bonus
3 depreciation deduction of 30% of the adjusted
4 basis was taken, "x" equals "y" multiplied by
5 30 and then divided by 70 (or "y" multiplied by
6 0.429) and, for property on which a bonus
7 depreciation deduction of 50% of the adjusted
8 basis was taken, "x" equals "y" multiplied by
9 1.0.
10 The aggregate amount deducted under this
11 subparagraph in all taxable years for any one piece
12 of property may not exceed the amount of the bonus
13 depreciation deduction (30% or 50% of the adjusted
14 basis of the qualified property) taken on that
15 property on the taxpayer's federal income tax return
16 under subsection (k) of Section 168 of the Internal
17 Revenue Code; and
18 (Z-1) For taxable years ending on or after
19 December 31, 2003, an amount equal to the excess, if
20 any, of the federal adjusted gross income properly
21 reportable by the taxpayer for the taxable year,
22 plus any addition required to be made under
23 subparagraph (D-15) for the taxable year, over the
24 adjusted gross income that would have been
25 reportable by the taxpayer if the taxpayer:
26 (1) had made the election in subsection
27 (k)(2)(C)(iii) of Section 168 of the Internal
28 Revenue Code for all property qualifying for
29 bonus depreciation (30% or 50% of the adjusted
30 basis of the qualifying property) for all
31 taxable years; and
32 (2) had made no election under Section
33 179(a) of the Internal Revenue Code for any
34 taxable year ending on or after December 31,
-12- LRB093 05711 SJM 20212 a
1 2003 to treat the cost of any property as an
2 expense.
3 This subparagraph (Z-1) is exempt from the
4 provisions of Section 250;
5 (AA) If the taxpayer reports a capital gain or
6 loss on the taxpayer's federal income tax return for
7 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 (D-15), then an amount equal to that
11 addition modification.
12 The taxpayer is allowed to take the deduction
13 under this subparagraph only once with respect to
14 any one piece of property; and
15 (BB)(Z) Any amount included in adjusted gross
16 income, other than salary, received by a driver in a
17 ridesharing arrangement using a motor vehicle.
18 (b) Corporations.
19 (1) In general. In the case of a corporation, base
20 income means an amount equal to the taxpayer's taxable
21 income for the taxable year as modified by paragraph (2).
22 (2) Modifications. The taxable income referred to
23 in paragraph (1) shall be modified by adding thereto the
24 sum of the following amounts:
25 (A) An amount equal to all amounts paid or
26 accrued to the taxpayer as interest and all
27 distributions received from regulated investment
28 companies during the taxable year to the extent
29 excluded from gross income in the computation of
30 taxable income;
31 (B) An amount equal to the amount of tax
32 imposed by this Act to the extent deducted from
33 gross income in the computation of taxable income
34 for the taxable year;
-13- LRB093 05711 SJM 20212 a
1 (C) In the case of a regulated investment
2 company, an amount equal to the excess of (i) the
3 net long-term capital gain for the taxable year,
4 over (ii) the amount of the capital gain dividends
5 designated as such in accordance with Section
6 852(b)(3)(C) of the Internal Revenue Code and any
7 amount designated under Section 852(b)(3)(D) of the
8 Internal Revenue Code, attributable to the taxable
9 year (this amendatory Act of 1995 (Public Act 89-89)
10 is declarative of existing law and is not a new
11 enactment);
12 (D) The amount of any net operating loss
13 deduction taken in arriving at taxable income, other
14 than a net operating loss carried forward from a
15 taxable year ending prior to December 31, 1986;
16 (E) For taxable years in which a net operating
17 loss carryback or carryforward from a taxable year
18 ending prior to December 31, 1986 is an element of
19 taxable income under paragraph (1) of subsection (e)
20 or subparagraph (E) of paragraph (2) of subsection
21 (e), the amount by which addition modifications
22 other than those provided by this subparagraph (E)
23 exceeded subtraction modifications in such earlier
24 taxable year, with the following limitations applied
25 in the order that they are listed:
26 (i) the addition modification relating to
27 the net operating loss carried back or forward
28 to the taxable year from any taxable year
29 ending prior to December 31, 1986 shall be
30 reduced by the amount of addition modification
31 under this subparagraph (E) which related to
32 that net operating loss and which was taken
33 into account in calculating the base income of
34 an earlier taxable year, and
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1 (ii) the addition modification relating
2 to the net operating loss carried back or
3 forward to the taxable year from any taxable
4 year ending prior to December 31, 1986 shall
5 not exceed the amount of such carryback or
6 carryforward;
7 For taxable years in which there is a net
8 operating loss carryback or carryforward from more
9 than one other taxable year ending prior to December
10 31, 1986, the addition modification provided in this
11 subparagraph (E) shall be the sum of the amounts
12 computed independently under the preceding
13 provisions of this subparagraph (E) for each such
14 taxable year;
15 (E-5) For taxable years ending after December
16 31, 1997, an amount equal to any eligible
17 remediation costs that the corporation deducted in
18 computing adjusted gross income and for which the
19 corporation claims a credit under subsection (l) of
20 Section 201;
21 (E-10) For taxable years ending after December
22 31, 20002001 and thereafter, an amount equal to the
23 bonus depreciation deduction (30% or 50% of the
24 adjusted basis of the qualified property) taken on
25 the taxpayer's federal income tax return for the
26 taxable year under subsection (k) of Section 168 of
27 the Internal Revenue Code with respect to any
28 property and, for taxable years ending on or after
29 December 31, 2003, an amount equal to any deduction
30 taken for the taxable year under Section 179 of the
31 Internal Revenue Code with respect to any property;
32 and
33 (E-11) If the taxpayer reports a capital gain
34 or loss on the taxpayer's federal income tax return
-15- LRB093 05711 SJM 20212 a
1 for the taxable year based on a sale or transfer of
2 property for which the taxpayer was required in any
3 taxable year to make an addition modification under
4 subparagraph (E-10), then an amount equal to the
5 aggregate amount of the deductions taken in all
6 taxable years under subparagraph (T) or (T-1) with
7 respect to that property.;
8 The taxpayer is required to make the addition
9 modification under this subparagraph only once with
10 respect to any one piece of property;
11 and by deducting from the total so obtained the sum of
12 the following amounts:
13 (F) An amount equal to the amount of any tax
14 imposed by this Act which was refunded to the
15 taxpayer and included in such total for the taxable
16 year;
17 (G) An amount equal to any amount included in
18 such total under Section 78 of the Internal Revenue
19 Code;
20 (H) In the case of a regulated investment
21 company, an amount equal to the amount of exempt
22 interest dividends as defined in subsection (b) (5)
23 of Section 852 of the Internal Revenue Code, paid to
24 shareholders for the taxable year;
25 (I) With the exception of any amounts
26 subtracted under subparagraph (J), an amount equal
27 to the sum of all amounts disallowed as deductions
28 by (i) Sections 171(a) (2), and 265(a)(2) and
29 amounts disallowed as interest expense by Section
30 291(a)(3) of the Internal Revenue Code, as now or
31 hereafter amended, and all amounts of expenses
32 allocable to interest and disallowed as deductions
33 by Section 265(a)(1) of the Internal Revenue Code,
34 as now or hereafter amended; and (ii) for taxable
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1 years ending on or after August 13, 1999, Sections
2 171(a)(2), 265, 280C, 291(a)(3), and 832(b)(5)(B)(i)
3 of the Internal Revenue Code; the provisions of this
4 subparagraph are exempt from the provisions of
5 Section 250;
6 (J) An amount equal to all amounts included in
7 such total which are exempt from taxation by this
8 State either by reason of its statutes or
9 Constitution or by reason of the Constitution,
10 treaties or statutes of the United States; provided
11 that, in the case of any statute of this State that
12 exempts income derived from bonds or other
13 obligations from the tax imposed under this Act, the
14 amount exempted shall be the interest net of bond
15 premium amortization;
16 (K) An amount equal to those dividends
17 included in such total which were paid by a
18 corporation which conducts business operations in an
19 Enterprise Zone or zones created under the Illinois
20 Enterprise Zone Act and conducts substantially all
21 of its operations in an Enterprise Zone or zones;
22 (L) 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 (L);
32 (M) For any taxpayer that is a financial
33 organization within the meaning of Section 304(c) of
34 this Act, an amount included in such total as
-17- LRB093 05711 SJM 20212 a
1 interest income from a loan or loans made by such
2 taxpayer to a borrower, to the extent that such a
3 loan is secured by property which is eligible for
4 the Enterprise Zone Investment Credit. To determine
5 the portion of a loan or loans that is secured by
6 property eligible for a Section 201(f) investment
7 credit to the borrower, the entire principal amount
8 of the loan or loans between the taxpayer and the
9 borrower should be divided into the basis of the
10 Section 201(f) investment credit property which
11 secures the loan or loans, using for this purpose
12 the original basis of such property on the date that
13 it was placed in service in the Enterprise Zone.
14 The subtraction modification available to taxpayer
15 in any year under this subsection shall be that
16 portion of the total interest paid by the borrower
17 with respect to such loan attributable to the
18 eligible property as calculated under the previous
19 sentence;
20 (M-1) For any taxpayer that is a financial
21 organization within the meaning of Section 304(c) of
22 this Act, an amount included in such total as
23 interest income from a loan or loans made by such
24 taxpayer to a borrower, to the extent that such a
25 loan is secured by property which is eligible for
26 the High Impact Business Investment Credit. To
27 determine the portion of a loan or loans that is
28 secured by property eligible for a Section 201(h)
29 investment credit to the borrower, the entire
30 principal amount of the loan or loans between the
31 taxpayer and the borrower should be divided into the
32 basis of the Section 201(h) investment credit
33 property which secures the loan or loans, using for
34 this purpose the original basis of such property on
-18- LRB093 05711 SJM 20212 a
1 the date that it was placed in service in a
2 federally designated Foreign Trade Zone or Sub-Zone
3 located in Illinois. No taxpayer that is eligible
4 for the deduction provided in subparagraph (M) of
5 paragraph (2) of this subsection shall be eligible
6 for the deduction provided under this subparagraph
7 (M-1). The subtraction modification available to
8 taxpayers in any year under this subsection shall be
9 that portion of the total interest paid by the
10 borrower with respect to such loan attributable to
11 the eligible property as calculated under the
12 previous sentence;
13 (N) Two times any contribution made during the
14 taxable year to a designated zone organization to
15 the extent that the contribution (i) qualifies as a
16 charitable contribution under subsection (c) of
17 Section 170 of the Internal Revenue Code and (ii)
18 must, by its terms, be used for a project approved
19 by the Department of Commerce and Economic
20 OpportunityCommunity Affairs under Section 11 of
21 the Illinois Enterprise Zone Act;
22 (O) An amount equal to: (i) 85% for taxable
23 years ending on or before December 31, 1992, or, a
24 percentage equal to the percentage allowable under
25 Section 243(a)(1) of the Internal Revenue Code of
26 1986 for taxable years ending after December 31,
27 1992, of the amount by which dividends included in
28 taxable income and received from a corporation that
29 is not created or organized under the laws of the
30 United States or any state or political subdivision
31 thereof, including, for taxable years ending on or
32 after December 31, 1988, dividends received or
33 deemed received or paid or deemed paid under
34 Sections 951 through 964 of the Internal Revenue
-19- LRB093 05711 SJM 20212 a
1 Code, exceed the amount of the modification provided
2 under subparagraph (G) of paragraph (2) of this
3 subsection (b) which is related to such dividends;
4 plus (ii) 100% of the amount by which dividends,
5 included in taxable income and received, including,
6 for taxable years ending on or after December 31,
7 1988, dividends received or deemed received or paid
8 or deemed paid under Sections 951 through 964 of the
9 Internal Revenue Code, from any such corporation
10 specified in clause (i) that would but for the
11 provisions of Section 1504 (b) (3) of the Internal
12 Revenue Code be treated as a member of the
13 affiliated group which includes the dividend
14 recipient, exceed the amount of the modification
15 provided under subparagraph (G) of paragraph (2) of
16 this subsection (b) which is related to such
17 dividends;
18 (P) An amount equal to any contribution made
19 to a job training project established pursuant to
20 the Tax Increment Allocation Redevelopment Act;
21 (Q) An amount equal to the amount of the
22 deduction used to compute the federal income tax
23 credit for restoration of substantial amounts held
24 under claim of right for the taxable year pursuant
25 to Section 1341 of the Internal Revenue Code of
26 1986;
27 (R) In the case of an attorney-in-fact with
28 respect to whom an interinsurer or a reciprocal
29 insurer has made the election under Section 835 of
30 the Internal Revenue Code, 26 U.S.C. 835, an amount
31 equal to the excess, if any, of the amounts paid or
32 incurred by that interinsurer or reciprocal insurer
33 in the taxable year to the attorney-in-fact over the
34 deduction allowed to that interinsurer or reciprocal
-20- LRB093 05711 SJM 20212 a
1 insurer with respect to the attorney-in-fact under
2 Section 835(b) of the Internal Revenue Code for the
3 taxable year;
4 (S) For taxable years ending on or after
5 December 31, 1997, in the case of a Subchapter S
6 corporation, an amount equal to all amounts of
7 income allocable to a shareholder subject to the
8 Personal Property Tax Replacement Income Tax imposed
9 by subsections (c) and (d) of Section 201 of this
10 Act, including amounts allocable to organizations
11 exempt from federal income tax by reason of Section
12 501(a) of the Internal Revenue Code. This
13 subparagraph (S) is exempt from the provisions of
14 Section 250;
15 (T) For eachtaxable years 2001 and
16 thereafter, for the taxable year ending prior to
17 December 31, 2003 in which the bonus depreciation
18 deduction (30% or 50% 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 subsequentapplicable taxable year ending prior
23 to December 31, 2003thereafter, an amount equal to
24 "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% or 50% of the
30 adjusted basis of the qualified property) was
31 taken in any year under subsection (k) of
32 Section 168 of the Internal Revenue Code, but
33 not including the bonus depreciation deduction;
34 and
-21- LRB093 05711 SJM 20212 a
1 (2) for property on which a bonus
2 depreciation deduction of 30% of the adjusted
3 basis was taken, "x" equals "y" multiplied by
4 30 and then divided by 70 (or "y" multiplied by
5 0.429) and, for property on which a bonus
6 depreciation deduction of 50% of the adjusted
7 basis was taken, "x" equals "y" multiplied by
8 1.0.
9 The aggregate amount deducted under this
10 subparagraph in all taxable years for any one piece
11 of property may not exceed the amount of the bonus
12 depreciation deduction (30% or 50% of the adjusted
13 basis of the qualified property) taken on that
14 property on the taxpayer's federal income tax return
15 under subsection (k) of Section 168 of the Internal
16 Revenue Code;
17 (T-1) For taxable years ending on or after
18 December 31, 2003, an amount equal to the excess, if
19 any, of the federal taxable income properly
20 reportable by the taxpayer for the taxable year,
21 plus any addition required to be made under
22 subparagraph (E-10) for the taxable year, over the
23 taxable income that would have been reportable by
24 the taxpayer if the taxpayer:
25 (1) had made the election in subsection
26 (k)(2)(C)(iii) of Section 168 of the Internal
27 Revenue Code for all property qualifying for
28 bonus depreciation (30% or 50% of the adjusted
29 basis of the qualifying property) for all
30 taxable years; and
31 (2) had made no election under Section
32 179(a) of the Internal Revenue Code for any
33 taxable year ending on or after December 31,
34 2003 to treat the cost of any property as an
-22- LRB093 05711 SJM 20212 a
1 expense.
2 This subparagraph (T-1) is exempt from the
3 provisions of Section 250; and
4 (U) 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 (E-10), then an amount equal to that
10 addition modification.
11 The taxpayer is allowed to take the deduction
12 under this subparagraph only once with respect to
13 any one piece of property.
14 (3) Special rule. For purposes of paragraph (2)
15 (A), "gross income" in the case of a life insurance
16 company, for tax years ending on and after December 31,
17 1994, shall mean the gross investment income for the
18 taxable year.
19 (c) Trusts and estates.
20 (1) In general. In the case of a trust or estate,
21 base income means an amount equal to the taxpayer's
22 taxable income for the taxable year as modified by
23 paragraph (2).
24 (2) Modifications. Subject to the provisions of
25 paragraph (3), the taxable income referred to in
26 paragraph (1) shall be modified by adding thereto the sum
27 of the following amounts:
28 (A) An amount equal to all amounts paid or
29 accrued to the taxpayer as interest or dividends
30 during the taxable year to the extent excluded from
31 gross income in the computation of taxable income;
32 (B) In the case of (i) an estate, $600; (ii) a
33 trust which, under its governing instrument, is
34 required to distribute all of its income currently,
-23- LRB093 05711 SJM 20212 a
1 $300; and (iii) any other trust, $100, but in each
2 such case, only to the extent such amount was
3 deducted in the computation of taxable income;
4 (C) 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 (D) The amount of any net operating loss
9 deduction taken in arriving at taxable income, other
10 than a net operating loss carried forward from a
11 taxable year ending prior to December 31, 1986;
12 (E) For taxable years in which a net operating
13 loss carryback or carryforward from a taxable year
14 ending prior to December 31, 1986 is an element of
15 taxable income under paragraph (1) of subsection (e)
16 or subparagraph (E) of paragraph (2) of subsection
17 (e), the amount by which addition modifications
18 other than those provided by this subparagraph (E)
19 exceeded subtraction modifications in such taxable
20 year, with the following limitations applied in the
21 order that they are listed:
22 (i) the addition modification relating to
23 the net operating loss carried back or forward
24 to the taxable year from any taxable year
25 ending prior to December 31, 1986 shall be
26 reduced by the amount of addition modification
27 under this subparagraph (E) which related to
28 that net operating loss and which was taken
29 into account in calculating the base income of
30 an earlier taxable year, and
31 (ii) the addition modification relating
32 to the net operating loss carried back or
33 forward to the taxable year from any taxable
34 year ending prior to December 31, 1986 shall
-24- LRB093 05711 SJM 20212 a
1 not exceed the amount of such carryback or
2 carryforward;
3 For taxable years in which there is a net
4 operating loss carryback or carryforward from more
5 than one other taxable year ending prior to December
6 31, 1986, the addition modification provided in this
7 subparagraph (E) shall be the sum of the amounts
8 computed independently under the preceding
9 provisions of this subparagraph (E) for each such
10 taxable year;
11 (F) For taxable years ending on or after
12 January 1, 1989, an amount equal to the tax deducted
13 pursuant to Section 164 of the Internal Revenue Code
14 if the trust or estate is claiming the same tax for
15 purposes of the Illinois foreign tax credit under
16 Section 601 of this Act;
17 (G) An amount equal to the amount of the
18 capital gain deduction allowable under the Internal
19 Revenue Code, to the extent deducted from gross
20 income in the computation of taxable income;
21 (G-5) For taxable years ending after December
22 31, 1997, an amount equal to any eligible
23 remediation costs that the trust or estate deducted
24 in computing adjusted gross income and for which the
25 trust or estate claims a credit under subsection (l)
26 of Section 201;
27 (G-10) For taxable years ending after December
28 31, 20002001 and thereafter, an amount equal to the
29 bonus depreciation deduction (30% or 50% of the
30 adjusted basis of the qualified property) taken on
31 the taxpayer's federal income tax return for the
32 taxable year under subsection (k) of Section 168 of
33 the Internal Revenue Code with respect to any
34 property and, for taxable years ending on or after
-25- LRB093 05711 SJM 20212 a
1 December 31, 2003, an amount equal to any deduction
2 taken for the taxable year under Section 179 of the
3 Internal Revenue Code with respect to any property;
4 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) or (R-1) with
13 respect to 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;
-26- LRB093 05711 SJM 20212 a
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
-27- LRB093 05711 SJM 20212 a
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;
16 (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
-28- LRB093 05711 SJM 20212 a
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 eachtaxable years 2001 and
18 thereafter, for the taxable year ending prior to
19 December 31, 2003 in which the bonus depreciation
20 deduction (30% or 50% of the adjusted basis of the
21 qualified property) is taken on the taxpayer's
22 federal income tax return under subsection (k) of
23 Section 168 of the Internal Revenue Code and for
24 each subsequentapplicable taxable year ending prior
25 to December 31, 2003thereafter, an amount equal to
26 "x", where:
27 (1) "y" equals the amount of the
28 depreciation deduction taken for the taxable
29 year on the taxpayer's federal income tax
30 return on property for which the bonus
31 depreciation deduction (30% or 50% of the
32 adjusted basis of the qualified property) was
33 taken in any year under subsection (k) of
34 Section 168 of the Internal Revenue Code, but
-29- LRB093 05711 SJM 20212 a
1 not including the bonus depreciation deduction;
2 and
3 (2) for property on which a bonus
4 depreciation deduction of 30% of the adjusted
5 basis was taken, "x" equals "y" multiplied by
6 30 and then divided by 70 (or "y" multiplied by
7 0.429) and, for property on which a bonus
8 depreciation deduction of 50% of the adjusted
9 basis was taken, "x" equals "y" multiplied by
10 1.0.
11 The aggregate amount deducted under this
12 subparagraph in all taxable years for any one piece
13 of property may not exceed the amount of the bonus
14 depreciation deduction (30% or 50% of the adjusted
15 basis of the qualified property) taken on that
16 property on the taxpayer's federal income tax return
17 under subsection (k) of Section 168 of the Internal
18 Revenue Code;
19 (R-1) For taxable years ending on or after
20 December 31, 2003, an amount equal to the excess, if
21 any, of the federal taxable income properly
22 reportable by the taxpayer for the taxable year,
23 plus any addition required to be made under
24 subparagraph (G-10) for the taxable year, over the
25 taxable income that would have been reportable by
26 the taxpayer if the taxpayer:
27 (1) had made the election in subsection
28 (k)(2)(C)(iii) of Section 168 of the Internal
29 Revenue Code for all property qualifying for
30 bonus depreciation (30% or 50% of the adjusted
31 basis of the qualifying property) for all
32 taxable years; and
33 (2) had made no election under Section
34 179(a) of the Internal Revenue Code for any
-30- LRB093 05711 SJM 20212 a
1 taxable year ending on or after December 31,
2 2003 to treat the cost of any property as an
3 expense.
4 This subparagraph (R-1) is exempt from the
5 provisions of Section 250; and
6 (S) 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 (G-10), then an amount equal to that
12 addition modification.
13 The taxpayer is allowed to take the deduction
14 under this subparagraph only once with respect to
15 any one piece of property.
16 (3) Limitation. The amount of any modification
17 otherwise required under this subsection shall, under
18 regulations prescribed by the Department, be adjusted by
19 any amounts included therein which were properly paid,
20 credited, or required to be distributed, or permanently
21 set aside for charitable purposes pursuant to Internal
22 Revenue Code Section 642(c) during the taxable year.
23 (d) Partnerships.
24 (1) In general. In the case of a partnership, base
25 income means an amount equal to the taxpayer's taxable
26 income for the taxable year as modified by paragraph (2).
27 (2) Modifications. The taxable income referred to
28 in paragraph (1) shall be modified by adding thereto the
29 sum of the following amounts:
30 (A) An amount equal to all amounts paid or
31 accrued to the taxpayer as interest or dividends
32 during the taxable year to the extent excluded from
33 gross income in the computation of taxable income;
34 (B) An amount equal to the amount of tax
-31- LRB093 05711 SJM 20212 a
1 imposed by this Act to the extent deducted from
2 gross income for the taxable year;
3 (C) The amount of deductions allowed to the
4 partnership pursuant to Section 707 (c) of the
5 Internal Revenue Code in calculating its taxable
6 income;
7 (D) An amount equal to the amount of the
8 capital gain deduction allowable under the Internal
9 Revenue Code, to the extent deducted from gross
10 income in the computation of taxable income;
11 (D-5) For taxable years ending after December
12 31, 20002001 and thereafter, an amount equal to the
13 bonus depreciation deduction (30% or 50% of the
14 adjusted basis of the qualified property) taken on
15 the taxpayer's federal income tax return for the
16 taxable year under subsection (k) of Section 168 of
17 the Internal Revenue Code with respect to any
18 property and, for taxable years ending on or after
19 December 31, 2003, an amount equal to any deduction
20 taken for the taxable year under Section 179 of the
21 Internal Revenue Code with respect to any property;
22 and
23 (D-6) If the taxpayer reports a capital gain
24 or loss on the taxpayer's federal income tax return
25 for the taxable year based on a sale or transfer of
26 property for which the taxpayer was required in any
27 taxable year to make an addition modification under
28 subparagraph (D-5), then an amount equal to the
29 aggregate amount of the deductions taken in all
30 taxable years under subparagraph (O) or (O-1) with
31 respect to that property.;
32 The taxpayer is required to make the addition
33 modification under this subparagraph only once with
34 respect to any one piece of property;
-32- LRB093 05711 SJM 20212 a
1 and by deducting from the total so obtained the following
2 amounts:
3 (E) The valuation limitation amount;
4 (F) An amount equal to the amount of any tax
5 imposed by this Act which was refunded to the
6 taxpayer and included in such total for the taxable
7 year;
8 (G) An amount equal to all amounts included in
9 taxable income as modified by subparagraphs (A),
10 (B), (C) and (D) which are exempt from taxation by
11 this State either by reason of its statutes or
12 Constitution or by reason of the Constitution,
13 treaties or statutes of the United States; provided
14 that, in the case of any statute of this State that
15 exempts income derived from bonds or other
16 obligations from the tax imposed under this Act, the
17 amount exempted shall be the interest net of bond
18 premium amortization;
19 (H) Any income of the partnership which
20 constitutes personal service income as defined in
21 Section 1348 (b) (1) of the Internal Revenue Code
22 (as in effect December 31, 1981) or a reasonable
23 allowance for compensation paid or accrued for
24 services rendered by partners to the partnership,
25 whichever is greater;
26 (I) An amount equal to all amounts of income
27 distributable to an entity subject to the Personal
28 Property Tax Replacement Income Tax imposed by
29 subsections (c) and (d) of Section 201 of this Act
30 including amounts distributable to organizations
31 exempt from federal income tax by reason of Section
32 501(a) of the Internal Revenue Code;
33 (J) With the exception of any amounts
34 subtracted under subparagraph (G), an amount equal
-33- LRB093 05711 SJM 20212 a
1 to the sum of all amounts disallowed as deductions
2 by (i) Sections 171(a) (2), and 265(2) of the
3 Internal Revenue Code of 1954, as now or hereafter
4 amended, and all amounts of expenses allocable to
5 interest and disallowed as deductions by Section
6 265(1) of the Internal Revenue Code, as now or
7 hereafter amended; and (ii) for taxable years ending
8 on or after August 13, 1999, Sections 171(a)(2),
9 265, 280C, and 832(b)(5)(B)(i) of the Internal
10 Revenue Code; the provisions of this subparagraph
11 are exempt from the provisions of Section 250;
12 (K) An amount equal to those dividends
13 included in such total which were paid by a
14 corporation which conducts business operations in an
15 Enterprise Zone or zones created under the Illinois
16 Enterprise Zone Act, enacted by the 82nd General
17 Assembly, and conducts substantially all of its
18 operations in an Enterprise Zone or Zones;
19 (L) An amount equal to any contribution made
20 to a job training project established pursuant to
21 the Real Property Tax Increment Allocation
22 Redevelopment Act;
23 (M) 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 (M);
33 (N) An amount equal to the amount of the
34 deduction used to compute the federal income tax
-34- LRB093 05711 SJM 20212 a
1 credit for restoration of substantial amounts held
2 under claim of right for the taxable year pursuant
3 to Section 1341 of the Internal Revenue Code of
4 1986;
5 (O) For eachtaxable years 2001 and
6 thereafter, for the taxable year ending prior to
7 December 31, 2003 in which the bonus depreciation
8 deduction (30% or 50% of the adjusted basis of the
9 qualified property) is taken on the taxpayer's
10 federal income tax return under subsection (k) of
11 Section 168 of the Internal Revenue Code and for
12 each subsequentapplicable taxable year ending prior
13 to December 31, 2003thereafter, an amount equal to
14 "x", where:
15 (1) "y" equals the amount of the
16 depreciation deduction taken for the taxable
17 year on the taxpayer's federal income tax
18 return on property for which the bonus
19 depreciation deduction (30% or 50% of the
20 adjusted basis of the qualified property) was
21 taken in any year under subsection (k) of
22 Section 168 of the Internal Revenue Code, but
23 not including the bonus depreciation deduction;
24 and
25 (2) for property on which a bonus
26 depreciation deduction of 30% of the adjusted
27 basis was taken, "x" equals "y" multiplied by
28 30 and then divided by 70 (or "y" multiplied by
29 0.429) and, for property on which a bonus
30 depreciation deduction of 50% of the adjusted
31 basis was taken, "x" equals "y" multiplied by
32 1.0.
33 The aggregate amount deducted under this
34 subparagraph in all taxable years for any one piece
-35- LRB093 05711 SJM 20212 a
1 of property may not exceed the amount of the bonus
2 depreciation deduction (30% or 50% of the adjusted
3 basis of the qualified property) taken on that
4 property on the taxpayer's federal income tax return
5 under subsection (k) of Section 168 of the Internal
6 Revenue Code;
7 (O-1) For taxable years ending on or after
8 December 31, 2003, an amount equal to the excess, if
9 any, of the federal taxable income properly
10 reportable by the taxpayer for the taxable year,
11 plus any addition required to be made under
12 subparagraph (D-5) for the taxable year, over the
13 taxable income that would have been reportable by
14 the taxpayer if the taxpayer:
15 (1) had made the election in subsection
16 (k)(2)(C)(iii) of Section 168 of the Internal
17 Revenue Code for all property qualifying for
18 bonus depreciation (30% or 50% of the adjusted
19 basis of the qualifying property) for all
20 taxable years; and
21 (2) had made no election under Section
22 179(a) of the Internal Revenue Code for any
23 taxable year ending on or after December 31,
24 2003 to treat the cost of any property as an
25 expense.
26 This subparagraph (O-1) is exempt from the
27 provisions of Section 250; and
28 (P) If the taxpayer reports a capital gain or
29 loss on the taxpayer's federal income tax return for
30 the taxable year based on a sale or transfer of
31 property for which the taxpayer was required in any
32 taxable year to make an addition modification under
33 subparagraph (D-5), then an amount equal to that
34 addition modification.
-36- LRB093 05711 SJM 20212 a
1 The taxpayer is allowed to take the deduction
2 under this subparagraph only once with respect to
3 any one piece of property.
4 (e) Gross income; adjusted gross income; taxable income.
5 (1) In general. Subject to the provisions of
6 paragraph (2) and subsection (b) (3), for purposes of
7 this Section and Section 803(e), a taxpayer's gross
8 income, adjusted gross income, or taxable income for the
9 taxable year shall mean the amount of gross income,
10 adjusted gross income or taxable income properly
11 reportable for federal income tax purposes for the
12 taxable year under the provisions of the Internal Revenue
13 Code. Taxable income may be less than zero. However, for
14 taxable years ending on or after December 31, 1986, net
15 operating loss carryforwards from taxable years ending
16 prior to December 31, 1986, may not exceed the sum of
17 federal taxable income for the taxable year before net
18 operating loss deduction, plus the excess of addition
19 modifications over subtraction modifications for the
20 taxable year. For taxable years ending prior to December
21 31, 1986, taxable income may never be an amount in excess
22 of the net operating loss for the taxable year as defined
23 in subsections (c) and (d) of Section 172 of the Internal
24 Revenue Code, provided that when taxable income of a
25 corporation (other than a Subchapter S corporation),
26 trust, or estate is less than zero and addition
27 modifications, other than those provided by subparagraph
28 (E) of paragraph (2) of subsection (b) for corporations
29 or subparagraph (E) of paragraph (2) of subsection (c)
30 for trusts and estates, exceed subtraction modifications,
31 an addition modification must be made under those
32 subparagraphs for any other taxable year to which the
33 taxable income less than zero (net operating loss) is
34 applied under Section 172 of the Internal Revenue Code or
-37- LRB093 05711 SJM 20212 a
1 under subparagraph (E) of paragraph (2) of this
2 subsection (e) applied in conjunction with Section 172 of
3 the Internal Revenue Code.
4 (2) Special rule. For purposes of paragraph (1) of
5 this subsection, the taxable income properly reportable
6 for federal income tax purposes shall mean:
7 (A) Certain life insurance companies. In the
8 case of a life insurance company subject to the tax
9 imposed by Section 801 of the Internal Revenue Code,
10 life insurance company taxable income, plus the
11 amount of distribution from pre-1984 policyholder
12 surplus accounts as calculated under Section 815a of
13 the Internal Revenue Code;
14 (B) Certain other insurance companies. In the
15 case of mutual insurance companies subject to the
16 tax imposed by Section 831 of the Internal Revenue
17 Code, insurance company taxable income;
18 (C) Regulated investment companies. In the
19 case of a regulated investment company subject to
20 the tax imposed by Section 852 of the Internal
21 Revenue Code, investment company taxable income;
22 (D) Real estate investment trusts. In the
23 case of a real estate investment trust subject to
24 the tax imposed by Section 857 of the Internal
25 Revenue Code, real estate investment trust taxable
26 income;
27 (E) Consolidated corporations. In the case of
28 a corporation which is a member of an affiliated
29 group of corporations filing a consolidated income
30 tax return for the taxable year for federal income
31 tax purposes, taxable income determined as if such
32 corporation had filed a separate return for federal
33 income tax purposes for the taxable year and each
34 preceding taxable year for which it was a member of
-38- LRB093 05711 SJM 20212 a
1 an affiliated group. For purposes of this
2 subparagraph, the taxpayer's separate taxable income
3 shall be determined as if the election provided by
4 Section 243(b) (2) of the Internal Revenue Code had
5 been in effect for all such years;
6 (F) Cooperatives. In the case of a
7 cooperative corporation or association, the taxable
8 income of such organization determined in accordance
9 with the provisions of Section 1381 through 1388 of
10 the Internal Revenue Code;
11 (G) Subchapter S corporations. In the case
12 of: (i) a Subchapter S corporation for which there
13 is in effect an election for the taxable year under
14 Section 1362 of the Internal Revenue Code, the
15 taxable income of such corporation determined in
16 accordance with Section 1363(b) of the Internal
17 Revenue Code, except that taxable income shall take
18 into account those items which are required by
19 Section 1363(b)(1) of the Internal Revenue Code to
20 be separately stated; and (ii) a Subchapter S
21 corporation for which there is in effect a federal
22 election to opt out of the provisions of the
23 Subchapter S Revision Act of 1982 and have applied
24 instead the prior federal Subchapter S rules as in
25 effect on July 1, 1982, the taxable income of such
26 corporation determined in accordance with the
27 federal Subchapter S rules as in effect on July 1,
28 1982; and
29 (H) Partnerships. In the case of a
30 partnership, taxable income determined in accordance
31 with Section 703 of the Internal Revenue Code,
32 except that taxable income shall take into account
33 those items which are required by Section 703(a)(1)
34 to be separately stated but which would be taken
-39- LRB093 05711 SJM 20212 a
1 into account by an individual in calculating his
2 taxable income.
3 (f) Valuation limitation amount.
4 (1) In general. The valuation limitation amount
5 referred to in subsections (a) (2) (G), (c) (2) (I) and
6 (d)(2) (E) is an amount equal to:
7 (A) The sum of the pre-August 1, 1969
8 appreciation amounts (to the extent consisting of
9 gain reportable under the provisions of Section 1245
10 or 1250 of the Internal Revenue Code) for all
11 property in respect of which such gain was reported
12 for the taxable year; plus
13 (B) The lesser of (i) the sum of the
14 pre-August 1, 1969 appreciation amounts (to the
15 extent consisting of capital gain) for all property
16 in respect of which such gain was reported for
17 federal income tax purposes for the taxable year, or
18 (ii) the net capital gain for the taxable year,
19 reduced in either case by any amount of such gain
20 included in the amount determined under subsection
21 (a) (2) (F) or (c) (2) (H).
22 (2) Pre-August 1, 1969 appreciation amount.
23 (A) If the fair market value of property
24 referred to in paragraph (1) was readily
25 ascertainable on August 1, 1969, the pre-August 1,
26 1969 appreciation amount for such property is the
27 lesser of (i) the excess of such fair market value
28 over the taxpayer's basis (for determining gain) for
29 such property on that date (determined under the
30 Internal Revenue Code as in effect on that date), or
31 (ii) the total gain realized and reportable for
32 federal income tax purposes in respect of the sale,
33 exchange or other disposition of such property.
34 (B) If the fair market value of property
-40- LRB093 05711 SJM 20212 a
1 referred to in paragraph (1) was not readily
2 ascertainable on August 1, 1969, the pre-August 1,
3 1969 appreciation amount for such property is that
4 amount which bears the same ratio to the total gain
5 reported in respect of the property for federal
6 income tax purposes for the taxable year, as the
7 number of full calendar months in that part of the
8 taxpayer's holding period for the property ending
9 July 31, 1969 bears to the number of full calendar
10 months in the taxpayer's entire holding period for
11 the property.
12 (C) The Department shall prescribe such
13 regulations as may be necessary to carry out the
14 purposes of this paragraph.
15 (g) Double deductions. Unless specifically provided
16 otherwise, nothing in this Section shall permit the same item
17 to be deducted more than once.
18 (h) Legislative intention. Except as expressly provided
19 by this Section there shall be no modifications or
20 limitations on the amounts of income, gain, loss or deduction
21 taken into account in determining gross income, adjusted
22 gross income or taxable income for federal income tax
23 purposes for the taxable year, or in the amount of such items
24 entering into the computation of base income and net income
25 under this Act for such taxable year, whether in respect of
26 property values as of August 1, 1969 or otherwise.
27 (Source: P.A. 91-192, eff. 7-20-99; 91-205, eff. 7-20-99;
28 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676, eff.
29 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01; 92-16,
30 eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, eff. 8-17-01;
31 92-603, eff. 6-28-02; 92-626, eff. 7-11-02; 92-651, eff.
32 7-11-02; 92-846, eff. 8-23-02; revised 10-15-03.)
-41- LRB093 05711 SJM 20212 a
1 Section 99. Effective date. This Act takes effect upon
2 becoming law.".
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