Full Text of HB0267 99th General Assembly
HB0267 99TH GENERAL ASSEMBLY |
| | 99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016 HB0267 Introduced , by Rep. Natalie A. Manley SYNOPSIS AS INTRODUCED: |
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Amends the Illinois Income Tax Act. Provides that each beneficiary, other than an individual, of a trust or estate shall be allowed a deduction in the taxable year in which the final taxable year of the trust or estate ends. Provides that the deduction shall be treated as a carryover deduction. Contains provisions concerning the number of years in which the beneficiary may carry forward the deduction.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Income Tax Act is amended by | 5 | | changing Section 405 as follows:
| 6 | | (35 ILCS 5/405)
| 7 | | Sec. 405. Carryovers in certain transactions acquisitions .
| 8 | | (a) In the case of the acquisition of assets of a | 9 | | corporation by another
corporation described in Section 381(a) | 10 | | of the Internal Revenue Code, the
acquiring corporation shall | 11 | | succeed to and take into account, as of the close
of the day of | 12 | | distribution or transfer, all Article 2 credits and net losses
| 13 | | under Section 207 of the corporation from which the assets were
| 14 | | acquired.
| 15 | | (b) In the case of the acquisition of assets of a | 16 | | partnership by another
partnership in a transaction in which | 17 | | the acquiring partnership is considered
to be a continuation of | 18 | | the partnership from which the assets were acquired
under the | 19 | | provisions of Section 708 of the Internal Revenue Code and any
| 20 | | regulations promulgated under that Section, the acquiring | 21 | | partnership shall
succeed to
and take into account, as of the | 22 | | close of the day of distribution or transfer,
all Article 2 | 23 | | credits and net losses under Section 207 of the partnership |
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| 1 | | from
which the assets were acquired.
| 2 | | (b-5) No limitation under Section 382 of the Internal | 3 | | Revenue Code or the
separate return limitation year regulations | 4 | | promulgated under Section 1502 of
the Internal Revenue Code | 5 | | shall apply to the carryover of any Article 2 credit
or net | 6 | | loss allowable under Section 207.
| 7 | | (c) The provisions of Public Act 91-541 this amendatory Act | 8 | | of the 91st General Assembly shall
apply to all acquisitions | 9 | | occurring in taxable years ending on or after
December 31, | 10 | | 1986; provided that if a taxpayer's Illinois income tax | 11 | | liability
for any taxable year, as assessed under Section 903 | 12 | | prior to January 1, 1999,
was computed without taking into | 13 | | account all of the Article 2 credits and net
losses under | 14 | | Section 207 as allowed by this Section:
| 15 | | (1) no refund shall be payable to the taxpayer for that | 16 | | taxable year as
the result of allowing any portion of the | 17 | | Article 2 credits or net losses under
Section 207 that were | 18 | | not taken into account in computing the tax assessed
prior | 19 | | to January 1, 1999;
| 20 | | (2) any deficiency which has not been paid may be | 21 | | reduced (but not below
zero) by the allowance of some or | 22 | | all of the Article 2 credits or net losses
under Section | 23 | | 207 that were not taken into account in computing the tax
| 24 | | assessed prior to January 1, 1999; and
| 25 | | (3) in the case of any Article 2 credit or net loss | 26 | | under Section 207
that, pursuant to this subsection (c), |
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| 1 | | could not be taken into account either
in computing the tax | 2 | | assessed prior to January 1, 1999 for a taxable year or in
| 3 | | reducing a deficiency for that
taxable year under paragraph | 4 | | (2) of subsection (c), the allowance of such
credit or loss | 5 | | in
any other taxable year shall not be denied on the | 6 | | grounds that such credit or
loss should properly have been | 7 | | claimed in that taxable year under subsection
(a) or (b).
| 8 | | (d) On the termination of a trust or estate that is | 9 | | entitled to a net loss carryover deduction under Section 207 of | 10 | | this Act for its final taxable year that is in excess of its | 11 | | taxable income (before the carryover deduction) for that | 12 | | taxable year, each beneficiary (other than an individual) of | 13 | | the trust or estate shall be allowed a deduction in its taxable | 14 | | year in which the final taxable year of the trust or estate | 15 | | ends, equal to the portion of that excess carryover deduction | 16 | | allocable to that beneficiary under the principles of Section | 17 | | 642(h) of the Internal Revenue Code. The deduction allowed | 18 | | under this subsection (d) shall be treated as a carryover | 19 | | deduction of the beneficiary under Section 207 of this Act as | 20 | | if incurred by the beneficiary, except that the deduction may | 21 | | be carried forward by the beneficiary only for the maximum | 22 | | number of taxable years for which the trust or estate would | 23 | | have been allowed to carry the loss forward under Section 207 | 24 | | of this Act, minus the number of taxable years (including the | 25 | | year of termination) to which the trust or estate had carried | 26 | | the deduction, with the taxable year in which the beneficiary |
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| 1 | | is first allowed a deduction under this paragraph counting as a | 2 | | carryforward year of the beneficiary. This subsection (d) shall | 3 | | apply to trusts or estates terminating after December 31, 2015, | 4 | | and is exempt from the provisions of Section 250 of this Act. | 5 | | (Source: P.A. 91-541, eff. 8-13-99; 91-913, eff. 1-1-01.)
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