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92_SB0902eng
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1 AN ACT concerning finance.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The State Treasurer Act is amended by
5 changing Section 16.5 as follows:
6 (15 ILCS 505/16.5)
7 Sec. 16.5. College Savings Pool. The State Treasurer may
8 establish and administer a College Savings Pool to supplement
9 and enhance the investment opportunities otherwise available
10 to persons seeking to finance the costs of higher education.
11 The State Treasurer, in administering the College Savings
12 Pool, may receive moneys paid into the pool by a participant
13 and may serve as the fiscal agent of that participant for the
14 purpose of holding and investing those moneys.
15 "Participant", as used in this Section, means any person
16 who that makes investments in the pool. "Designated
17 beneficiary", as used in this Section, means any person on
18 whose behalf an account is established in the College Savings
19 Pool by a participant. Both in-state and out-of-state persons
20 may be participants and designated beneficiaries in the
21 College Savings Pool.
22 New accounts in the College Savings Pool shall be
23 processed through participating financial institutions.
24 "Participating financial institution", as used in this
25 Section, means any financial institution insured by the
26 Federal Deposit Insurance Corporation and lawfully doing
27 business in the State of Illinois and any credit union
28 approved by the State Treasurer and lawfully doing business
29 in the State of Illinois that agrees to process new accounts
30 in the College Savings Pool. Participating financial
31 institutions may charge a processing fee to participants to
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1 open an account in the pool that shall not exceed $30 until
2 the year 2001. Beginning in 2001 and every year thereafter,
3 the maximum fee limit shall be adjusted by the Treasurer
4 based on the Consumer Price Index for the North Central
5 Region as published by the United States Department of Labor,
6 Bureau of Labor Statistics for the immediately preceding
7 calendar year. Every contribution received by a financial
8 institution for investment in the College Savings Pool shall
9 be transferred from the financial institution to a location
10 selected by the State Treasurer within one business day
11 following the day that the funds must be made available in
12 accordance with federal law. All communications from the
13 State Treasurer to participants shall reference the
14 participating financial institution at which the account was
15 processed.
16 The Treasurer may invest the moneys in the College
17 Savings Pool in the same manner, in the same types of
18 investments, and subject to the same limitations provided for
19 the investment of moneys by the Illinois State Board of
20 Investment. To enhance the safety and liquidity of the
21 College Savings Pool, to ensure the diversification of the
22 investment portfolio of the pool, and in an effort to keep
23 investment dollars in the State of Illinois, the State
24 Treasurer shall make a percentage of each account available
25 for investment in participating financial institutions doing
26 business in the State. The State Treasurer shall deposit
27 with the participating financial institution at which the
28 account was processed the following percentage of each
29 account at a prevailing rate offered by the institution,
30 provided that the deposit is federally insured or fully
31 collateralized and the institution accepts the deposit: 10%
32 of the total amount of each account for which the current age
33 of the beneficiary is less than 7 years of age, 20% of the
34 total amount of each account for which the beneficiary is at
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1 least 7 years of age and less than 12 years of age, and 50%
2 of the total amount of each account for which the current age
3 of the beneficiary is at least 12 years of age. The State
4 Treasurer shall adjust each account at least annually to
5 ensure compliance with this Section. The Treasurer shall
6 develop, publish, and implement an investment policy covering
7 the investment of the moneys in the College Savings Pool. The
8 policy shall be published (i) at least once each year in at
9 least one newspaper of general circulation in both
10 Springfield and Chicago and (ii) each year as part of the
11 audit of the College Savings Pool by the Auditor General,
12 which shall be distributed to all participants. The Treasurer
13 shall notify all participants in writing, and the Treasurer
14 shall publish in a newspaper of general circulation in both
15 Chicago and Springfield, any changes to the previously
16 published investment policy at least 30 calendar days before
17 implementing the policy. Any investment policy adopted by the
18 Treasurer shall be reviewed and updated if necessary within
19 90 days following the date that the State Treasurer takes
20 office.
21 Participants shall be required to use moneys distributed
22 from the College Savings Pool for qualified expenses at
23 eligible educational institutions. "Qualified expenses", as
24 used in this Section, means the following: (i) tuition, fees,
25 and the costs of books, supplies, and equipment required for
26 enrollment or attendance at an eligible educational
27 institution and (ii) certain room and board expenses incurred
28 while attending an eligible educational institution at least
29 half-time. "Eligible educational institutions", as used in
30 this Section, means public and private colleges, junior
31 colleges, graduate schools, and certain vocational
32 institutions that are described in Section 481 of the Higher
33 Education Act of 1965 (20 U.S.C. 1088) and that are eligible
34 to participate in Department of Education student aid
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1 programs. A student shall be considered to be enrolled at
2 least half-time if the student is enrolled for at least half
3 the full-time academic work load for the course of study the
4 student is pursuing as determined under the standards of the
5 institution at which the student is enrolled. Distributions
6 made from the pool for qualified expenses shall be made
7 directly to the eligible educational institution, directly to
8 a vendor, or in the form of a check payable to both the
9 beneficiary and the institution or vendor. Any moneys that
10 are distributed in any other manner or that are used for
11 expenses other than qualified expenses at an eligible
12 educational institution shall be subject to a penalty of 10%
13 of the earnings unless the beneficiary dies, becomes
14 disabled, or receives a scholarship that equals or exceeds
15 the distribution. Penalties shall be withheld at the time the
16 distribution is made.
17 The Treasurer shall limit the contributions that may be
18 made on behalf of a designated beneficiary based on an
19 actuarial estimate of what is required to pay tuition, fees,
20 and room and board for 5 undergraduate years at the highest
21 cost eligible educational institution. The contributions made
22 on behalf of a beneficiary who is also a beneficiary under
23 the Illinois Prepaid Tuition Program shall be further
24 restricted to ensure that the contributions in both programs
25 combined do not exceed the limit established for the College
26 Savings Pool. The Treasurer shall provide the Illinois
27 Student Assistance Commission each year at a time designated
28 by the Commission, an electronic report of all participant
29 accounts in the Treasurer's College Savings Pool, listing
30 total contributions and disbursements from each individual
31 account during the previous calendar year. As soon
32 thereafter as is possible following receipt of the
33 Treasurer's report, the Illinois Student Assistance
34 Commission shall, in turn, provide the Treasurer with an
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1 electronic report listing those College Savings Pool
2 participants who also participate in the State's prepaid
3 tuition program, administered by the Commission. The
4 Commission shall be responsible for filing any combined tax
5 reports regarding State qualified savings programs required
6 by the United States Internal Revenue Service. The Treasurer
7 shall work with the Illinois Student Assistance Commission to
8 coordinate the marketing of the College Savings Pool and the
9 Illinois Prepaid Tuition Program when considered beneficial
10 by the Treasurer and the Director of the Illinois Student
11 Assistance Commission. The Treasurer's office shall not
12 publicize or otherwise market the College Savings Pool or
13 accept any moneys into the College Savings Pool prior to
14 March 1, 2000. The Treasurer shall provide a separate
15 accounting for each designated beneficiary to each
16 participant, the Illinois Student Assistance Commission, and
17 the participating financial institution at which the account
18 was processed. No interest in the program may be pledged as
19 security for a loan.
20 The assets of the College Savings Pool and its income and
21 operation shall be exempt from all taxation by the State of
22 Illinois and any of its subdivisions. The accrued earnings
23 on investments in the Pool once disbursed on behalf of a
24 designated beneficiary shall be similarly exempt from all
25 taxation by the State of Illinois and its subdivisions, so
26 long as they are used for qualified expenses. Contributions
27 to a College Savings Pool account during the taxable year may
28 be deducted from adjusted gross income as provided in Section
29 203 of the Illinois Income Tax Act. The provisions of this
30 paragraph are exempt from Section 250 of the Illinois Income
31 Tax Act.
32 The Treasurer shall adopt rules he or she considers
33 necessary for the efficient administration of the College
34 Savings Pool. The rules shall provide whatever additional
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1 parameters and restrictions are necessary to ensure that the
2 College Savings Pool meets all of the requirements for a
3 qualified state tuition program under Section 529 of the
4 Internal Revenue Code (26 U.S.C. 529 52). The rules shall
5 provide for the administration expenses of the pool to be
6 paid from its earnings and for the investment earnings in
7 excess of the expenses and all moneys collected as penalties
8 to be credited or paid monthly to the several participants in
9 the pool in a manner which equitably reflects the differing
10 amounts of their respective investments in the pool and the
11 differing periods of time for which those amounts were in the
12 custody of the pool. Also, the rules shall require the
13 maintenance of records that enable the Treasurer's office to
14 produce a report for each account in the pool at least
15 annually that documents the account balance and investment
16 earnings. Notice of any proposed amendments to the rules and
17 regulations shall be provided to all participants prior to
18 adoption. Amendments to rules and regulations shall apply
19 only to contributions made after the adoption of the
20 amendment.
21 Upon creating the College Savings Pool, the State
22 Treasurer shall give bond with 2 or more sufficient sureties,
23 payable to and for the benefit of the participants in the
24 College Savings Pool, in the penal sum of $1,000,000,
25 conditioned upon the faithful discharge of his or her duties
26 in relation to the College Savings Pool.
27 (Source: P.A. 91-607, eff. 1-1-00; 91-829, eff. 1-1-01;
28 revised 7-3-00.)
29 Section 10. The Illinois Income Tax Act is amended by
30 changing Section 203 as follows:
31 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
32 Sec. 203. Base income defined.
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1 (a) Individuals.
2 (1) In general. In the case of an individual, base
3 income means an amount equal to the taxpayer's adjusted
4 gross income for the taxable year as modified by
5 paragraph (2).
6 (2) Modifications. The adjusted gross income
7 referred to in paragraph (1) shall be modified by adding
8 thereto the sum of the following amounts:
9 (A) An amount equal to all amounts paid or
10 accrued to the taxpayer as interest or dividends
11 during the taxable year to the extent excluded from
12 gross income in the computation of adjusted gross
13 income, except stock dividends of qualified public
14 utilities described in Section 305(e) of the
15 Internal Revenue Code;
16 (B) An amount equal to the amount of tax
17 imposed by this Act to the extent deducted from
18 gross income in the computation of adjusted gross
19 income for the taxable year;
20 (C) An amount equal to the amount received
21 during the taxable year as a recovery or refund of
22 real property taxes paid with respect to the
23 taxpayer's principal residence under the Revenue Act
24 of 1939 and for which a deduction was previously
25 taken under subparagraph (L) of this paragraph (2)
26 prior to July 1, 1991, the retrospective application
27 date of Article 4 of Public Act 87-17. In the case
28 of multi-unit or multi-use structures and farm
29 dwellings, the taxes on the taxpayer's principal
30 residence shall be that portion of the total taxes
31 for the entire property which is attributable to
32 such principal residence;
33 (D) An amount equal to the amount of the
34 capital gain deduction allowable under the Internal
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1 Revenue Code, to the extent deducted from gross
2 income in the computation of adjusted gross income;
3 (D-5) An amount, to the extent not included in
4 adjusted gross income, equal to the amount of money
5 withdrawn by the taxpayer in the taxable year from a
6 medical care savings account and the interest earned
7 on the account in the taxable year of a withdrawal
8 pursuant to subsection (b) of Section 20 of the
9 Medical Care Savings Account Act or subsection (b)
10 of Section 20 of the Medical Care Savings Account
11 Act of 2000; and
12 (D-10) For taxable years ending after December
13 31, 1997, an amount equal to any eligible
14 remediation costs that the individual deducted in
15 computing adjusted gross income and for which the
16 individual claims a credit under subsection (l) of
17 Section 201;
18 and by deducting from the total so obtained the sum of
19 the following amounts:
20 (E) Any amount included in such total in
21 respect of any compensation (including but not
22 limited to any compensation paid or accrued to a
23 serviceman while a prisoner of war or missing in
24 action) paid to a resident by reason of being on
25 active duty in 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 1971 or
30 thereafter for annual training performed pursuant to
31 Sections 502 and 503, Title 32, United States Code
32 as a member of the Illinois National Guard;
33 (F) An amount equal to all amounts included in
34 such total pursuant to the provisions of Sections
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1 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
2 408 of the Internal Revenue Code, or included in
3 such total as distributions under the provisions of
4 any retirement or disability plan for employees of
5 any governmental agency or unit, or retirement
6 payments to retired partners, which payments are
7 excluded in computing net earnings from self
8 employment by Section 1402 of the Internal Revenue
9 Code and regulations adopted pursuant thereto;
10 (G) The valuation limitation amount;
11 (H) An amount equal to the amount of any tax
12 imposed by this Act which was refunded to the
13 taxpayer and included in such total for the taxable
14 year;
15 (I) An amount equal to all amounts included in
16 such total pursuant to the provisions of Section 111
17 of the Internal Revenue Code as a recovery of items
18 previously deducted from adjusted gross income in
19 the computation of taxable income;
20 (J) An amount equal to those dividends
21 included in such total which were paid by a
22 corporation which conducts business operations in an
23 Enterprise Zone or zones created under the Illinois
24 Enterprise Zone Act, and conducts substantially all
25 of its operations in an Enterprise Zone or zones;
26 (K) An amount equal to those dividends
27 included in such total that were paid by a
28 corporation that conducts business operations in a
29 federally designated Foreign Trade Zone or Sub-Zone
30 and that is designated a High Impact Business
31 located in Illinois; provided that dividends
32 eligible for the deduction provided in subparagraph
33 (J) of paragraph (2) of this subsection shall not be
34 eligible for the deduction provided under this
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1 subparagraph (K);
2 (L) For taxable years ending after December
3 31, 1983, an amount equal to all social security
4 benefits and railroad retirement benefits included
5 in such total pursuant to Sections 72(r) and 86 of
6 the Internal Revenue Code;
7 (M) With the exception of any amounts
8 subtracted under subparagraph (N), an amount equal
9 to the sum of all amounts disallowed as deductions
10 by (i) Sections 171(a) (2), and 265(2) of the
11 Internal Revenue Code of 1954, as now or hereafter
12 amended, and all amounts of expenses allocable to
13 interest and disallowed as deductions by Section
14 265(1) of the Internal Revenue Code of 1954, as now
15 or hereafter amended; and (ii) for taxable years
16 ending on or after August 13, 1999, Sections
17 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
18 Internal Revenue Code; the provisions of this
19 subparagraph are exempt from the provisions of
20 Section 250;
21 (N) An amount equal to all amounts included in
22 such total which are exempt from taxation by this
23 State either by reason of its statutes or
24 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 that
27 exempts income derived from bonds or other
28 obligations from the tax imposed under this Act, the
29 amount exempted shall be the interest net of bond
30 premium amortization;
31 (O) An amount equal to any contribution made
32 to a job training project established pursuant to
33 the Tax Increment Allocation Redevelopment Act;
34 (P) An amount equal to the amount of the
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1 deduction used to compute the federal income tax
2 credit for restoration of substantial amounts held
3 under claim of right for the taxable year pursuant
4 to Section 1341 of the Internal Revenue Code of
5 1986;
6 (Q) An amount equal to any amounts included in
7 such total, received by the taxpayer as an
8 acceleration in the payment of life, endowment or
9 annuity benefits in advance of the time they would
10 otherwise be payable as an indemnity for a terminal
11 illness;
12 (R) An amount equal to the amount of any
13 federal or State bonus paid to veterans of the
14 Persian Gulf War;
15 (S) An amount, to the extent included in
16 adjusted gross income, equal to the amount of a
17 contribution made in the taxable year on behalf of
18 the taxpayer to a medical care savings account
19 established under the Medical Care Savings Account
20 Act or the Medical Care Savings Account Act of 2000
21 to the extent the contribution is accepted by the
22 account administrator as provided in that Act;
23 (T) An amount, to the extent included in
24 adjusted gross income, equal to the amount of
25 interest earned in the taxable year on a medical
26 care savings account established under the Medical
27 Care Savings Account Act or the Medical Care Savings
28 Account Act of 2000 on behalf of the taxpayer, other
29 than interest added pursuant to item (D-5) of this
30 paragraph (2);
31 (U) For one taxable year beginning on or after
32 January 1, 1994, an amount equal to the total amount
33 of tax imposed and paid under subsections (a) and
34 (b) of Section 201 of this Act on grant amounts
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1 received by the taxpayer under the Nursing Home
2 Grant Assistance Act during the taxpayer's taxable
3 years 1992 and 1993;
4 (V) Beginning with tax years ending on or
5 after December 31, 1995 and ending with tax years
6 ending on or before December 31, 2004, an amount
7 equal to the amount paid by a taxpayer who is a
8 self-employed taxpayer, a partner of a partnership,
9 or a shareholder in a Subchapter S corporation for
10 health insurance or long-term care insurance for
11 that taxpayer or that taxpayer's spouse or
12 dependents, to the extent that the amount paid for
13 that health insurance or long-term care insurance
14 may be deducted under Section 213 of the Internal
15 Revenue Code of 1986, has not been deducted on the
16 federal income tax return of the taxpayer, and does
17 not exceed the taxable income attributable to that
18 taxpayer's income, self-employment income, or
19 Subchapter S corporation income; except that no
20 deduction shall be allowed under this item (V) if
21 the taxpayer is eligible to participate in any
22 health insurance or long-term care insurance plan of
23 an employer of the taxpayer or the taxpayer's
24 spouse. The amount of the health insurance and
25 long-term care insurance subtracted under this item
26 (V) shall be determined by multiplying total health
27 insurance and long-term care insurance premiums paid
28 by the taxpayer times a number that represents the
29 fractional percentage of eligible medical expenses
30 under Section 213 of the Internal Revenue Code of
31 1986 not actually deducted on the taxpayer's federal
32 income tax return;
33 (W) For taxable years beginning on or after
34 January 1, 1998, all amounts included in the
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1 taxpayer's federal gross income in the taxable year
2 from amounts converted from a regular IRA to a Roth
3 IRA. This paragraph is exempt from the provisions of
4 Section 250; and
5 (X) For taxable year 1999 and thereafter, an
6 amount equal to the amount of any (i) distributions,
7 to the extent includible in gross income for federal
8 income tax purposes, made to the taxpayer because of
9 his or her status as a victim of persecution for
10 racial or religious reasons by Nazi Germany or any
11 other Axis regime or as an heir of the victim and
12 (ii) items of income, to the extent includible in
13 gross income for federal income tax purposes,
14 attributable to, derived from or in any way related
15 to assets stolen from, hidden from, or otherwise
16 lost to a victim of persecution for racial or
17 religious reasons by Nazi Germany or any other Axis
18 regime immediately prior to, during, and immediately
19 after World War II, including, but not limited to,
20 interest on the proceeds receivable as insurance
21 under policies issued to a victim of persecution for
22 racial or religious reasons by Nazi Germany or any
23 other Axis regime by European insurance companies
24 immediately prior to and during World War II;
25 provided, however, this subtraction from federal
26 adjusted gross income does not apply to assets
27 acquired with such assets or with the proceeds from
28 the sale of such assets; provided, further, this
29 paragraph shall only apply to a taxpayer who was the
30 first recipient of such assets after their recovery
31 and who is a victim of persecution for racial or
32 religious reasons by Nazi Germany or any other Axis
33 regime or as an heir of the victim. The amount of
34 and the eligibility for any public assistance,
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1 benefit, or similar entitlement is not affected by
2 the inclusion of items (i) and (ii) of this
3 paragraph in gross income for federal income tax
4 purposes. This paragraph is exempt from the
5 provisions of Section 250;
6 (Y) For taxable years beginning on or after
7 January 1, 2002, moneys contributed in the taxable
8 year to a College Savings Pool account under Section
9 16.5 of the State Treasurer Act. This subparagraph
10 (Y) is exempt from the provisions of Section 250;
11 and
12 (Z) For taxable years ending on or after
13 December 31, 2001, an amount equal to the amount
14 spent by the taxpayer during the taxable year for
15 the purchase of an Illinois prepaid tuition
16 contract, as defined in the Illinois Prepaid Tuition
17 Act. This subparagraph (Z) is exempt from the
18 provisions of Section 250 of this Act.
19 (b) Corporations.
20 (1) In general. In the case of a corporation, base
21 income means an amount equal to the taxpayer's taxable
22 income for the taxable year as modified by paragraph (2).
23 (2) Modifications. The taxable income referred to
24 in paragraph (1) shall be modified by adding thereto the
25 sum of the following amounts:
26 (A) An amount equal to all amounts paid or
27 accrued to the taxpayer as interest and all
28 distributions received from regulated investment
29 companies during the taxable year to the extent
30 excluded from gross income in the computation of
31 taxable income;
32 (B) An amount equal to the amount of tax
33 imposed by this Act to the extent deducted from
34 gross income in the computation of taxable income
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1 for the taxable year;
2 (C) In the case of a regulated investment
3 company, an amount equal to the excess of (i) the
4 net long-term capital gain for the taxable year,
5 over (ii) the amount of the capital gain dividends
6 designated as such in accordance with Section
7 852(b)(3)(C) of the Internal Revenue Code and any
8 amount designated under Section 852(b)(3)(D) of the
9 Internal Revenue Code, attributable to the taxable
10 year (this amendatory Act of 1995 (Public Act 89-89)
11 is declarative of existing law and is not a new
12 enactment);
13 (D) The amount of any net operating loss
14 deduction taken in arriving at taxable income, other
15 than a net operating loss carried forward from a
16 taxable year ending prior to December 31, 1986;
17 (E) For taxable years in which a net operating
18 loss carryback or carryforward from a taxable year
19 ending prior to December 31, 1986 is an element of
20 taxable income under paragraph (1) of subsection (e)
21 or subparagraph (E) of paragraph (2) of subsection
22 (e), the amount by which addition modifications
23 other than those provided by this subparagraph (E)
24 exceeded subtraction modifications in such earlier
25 taxable year, with the following limitations applied
26 in the order that they are listed:
27 (i) the addition modification relating to
28 the net operating loss carried back or forward
29 to the taxable year from any taxable year
30 ending prior to December 31, 1986 shall be
31 reduced by the amount of addition modification
32 under this subparagraph (E) which related to
33 that net operating loss and which was taken
34 into account in calculating the base income of
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1 an earlier taxable year, and
2 (ii) the addition modification relating
3 to the net operating loss carried back or
4 forward to the taxable year from any taxable
5 year ending prior to December 31, 1986 shall
6 not exceed the amount of such carryback or
7 carryforward;
8 For taxable years in which there is a net
9 operating loss carryback or carryforward from more
10 than one other taxable year ending prior to December
11 31, 1986, the addition modification provided in this
12 subparagraph (E) shall be the sum of the amounts
13 computed independently under the preceding
14 provisions of this subparagraph (E) for each such
15 taxable year; and
16 (E-5) For taxable years ending after December
17 31, 1997, an amount equal to any eligible
18 remediation costs that the corporation deducted in
19 computing adjusted gross income and for which the
20 corporation claims a credit under subsection (l) of
21 Section 201;
22 and by deducting from the total so obtained the sum of
23 the following amounts:
24 (F) An amount equal to the amount of any tax
25 imposed by this Act which was refunded to the
26 taxpayer and included in such total for the taxable
27 year;
28 (G) An amount equal to any amount included in
29 such total under Section 78 of the Internal Revenue
30 Code;
31 (H) In the case of a regulated investment
32 company, an amount equal to the amount of exempt
33 interest dividends as defined in subsection (b) (5)
34 of Section 852 of the Internal Revenue Code, paid to
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1 shareholders for the taxable year;
2 (I) With the exception of any amounts
3 subtracted under subparagraph (J), an amount equal
4 to the sum of all amounts disallowed as deductions
5 by (i) Sections 171(a) (2), and 265(a)(2) and
6 amounts disallowed as interest expense by Section
7 291(a)(3) of the Internal Revenue Code, as now or
8 hereafter amended, and all amounts of expenses
9 allocable to interest and disallowed as deductions
10 by Section 265(a)(1) of the Internal Revenue Code,
11 as now or hereafter amended; and (ii) for taxable
12 years ending on or after August 13, 1999, Sections
13 171(a)(2), 265, 280C, 291(a)(3), and 832(b)(5)(B)(i)
14 of the Internal Revenue Code; the provisions of this
15 subparagraph are exempt from the provisions of
16 Section 250;
17 (J) An amount equal to all amounts included in
18 such total which are exempt from taxation by this
19 State either by reason of its statutes or
20 Constitution or by reason of the Constitution,
21 treaties or statutes of the United States; provided
22 that, in the case of any statute of this State that
23 exempts income derived from bonds or other
24 obligations from the tax imposed under this Act, the
25 amount exempted shall be the interest net of bond
26 premium amortization;
27 (K) An amount equal to those dividends
28 included in such total which were paid by a
29 corporation which conducts business operations in an
30 Enterprise Zone or zones created under the Illinois
31 Enterprise Zone Act and conducts substantially all
32 of its operations in an Enterprise Zone or zones;
33 (L) An amount equal to those dividends
34 included in such total that were paid by a
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1 corporation that conducts business operations in a
2 federally designated Foreign Trade Zone or Sub-Zone
3 and that is designated a High Impact Business
4 located in Illinois; provided that dividends
5 eligible for the deduction provided in subparagraph
6 (K) of paragraph 2 of this subsection shall not be
7 eligible for the deduction provided under this
8 subparagraph (L);
9 (M) For any taxpayer that is a financial
10 organization within the meaning of Section 304(c) of
11 this Act, an amount included in such total as
12 interest income from a loan or loans made by such
13 taxpayer to a borrower, to the extent that such a
14 loan is secured by property which is eligible for
15 the Enterprise Zone Investment Credit. To determine
16 the portion of a loan or loans that is secured by
17 property eligible for a Section 201(f) 201(h)
18 investment credit to the borrower, the entire
19 principal amount of the loan or loans between the
20 taxpayer and the borrower should be divided into the
21 basis of the Section 201(f) 201(h) investment credit
22 property which secures the loan or loans, using for
23 this purpose the original basis of such property on
24 the date that it was placed in service in the
25 Enterprise Zone. The subtraction modification
26 available to taxpayer in any year under this
27 subsection shall be that portion of the total
28 interest paid by the borrower with respect to such
29 loan attributable to the eligible property as
30 calculated under the previous sentence;
31 (M-1) For any taxpayer that is a financial
32 organization within the meaning of Section 304(c) of
33 this Act, an amount included in such total as
34 interest income from a loan or loans made by such
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1 taxpayer to a borrower, to the extent that such a
2 loan is secured by property which is eligible for
3 the High Impact Business Investment Credit. To
4 determine the portion of a loan or loans that is
5 secured by property eligible for a Section 201(h)
6 201(i) investment credit to the borrower, the entire
7 principal amount of the loan or loans between the
8 taxpayer and the borrower should be divided into the
9 basis of the Section 201(h) 201(i) investment credit
10 property which secures the loan or loans, using for
11 this purpose the original basis of such property on
12 the date that it was placed in service in a
13 federally designated Foreign Trade Zone or Sub-Zone
14 located in Illinois. No taxpayer that is eligible
15 for the deduction provided in subparagraph (M) of
16 paragraph (2) of this subsection shall be eligible
17 for the deduction provided under this subparagraph
18 (M-1). The subtraction modification available to
19 taxpayers in any year under this subsection shall be
20 that portion of the total interest paid by the
21 borrower with respect to such loan attributable to
22 the eligible property as calculated under the
23 previous sentence;
24 (N) Two times any contribution made during the
25 taxable year to a designated zone organization to
26 the extent that the contribution (i) qualifies as a
27 charitable contribution under subsection (c) of
28 Section 170 of the Internal Revenue Code and (ii)
29 must, by its terms, be used for a project approved
30 by the Department of Commerce and Community Affairs
31 under Section 11 of the Illinois Enterprise Zone
32 Act;
33 (O) An amount equal to: (i) 85% for taxable
34 years ending on or before December 31, 1992, or, a
SB902 Engrossed -20- LRB9205921SMdv
1 percentage equal to the percentage allowable under
2 Section 243(a)(1) of the Internal Revenue Code of
3 1986 for taxable years ending after December 31,
4 1992, of the amount by which dividends included in
5 taxable income and received from a corporation that
6 is not created or organized under the laws of the
7 United States or any state or political subdivision
8 thereof, including, for taxable years ending on or
9 after December 31, 1988, dividends received or
10 deemed received or paid or deemed paid under
11 Sections 951 through 964 of the Internal Revenue
12 Code, exceed the amount of the modification provided
13 under subparagraph (G) of paragraph (2) of this
14 subsection (b) which is related to such dividends;
15 plus (ii) 100% of the amount by which dividends,
16 included in taxable income and received, including,
17 for taxable years ending on or after December 31,
18 1988, dividends received or deemed received or paid
19 or deemed paid under Sections 951 through 964 of the
20 Internal Revenue Code, from any such corporation
21 specified in clause (i) that would but for the
22 provisions of Section 1504 (b) (3) of the Internal
23 Revenue Code be treated as a member of the
24 affiliated group which includes the dividend
25 recipient, exceed the amount of the modification
26 provided under subparagraph (G) of paragraph (2) of
27 this subsection (b) which is related to such
28 dividends;
29 (P) An amount equal to any contribution made
30 to a job training project established pursuant to
31 the Tax Increment Allocation Redevelopment Act;
32 (Q) An amount equal to the amount of the
33 deduction used to compute the federal income tax
34 credit for restoration of substantial amounts held
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1 under claim of right for the taxable year pursuant
2 to Section 1341 of the Internal Revenue Code of
3 1986;
4 (R) In the case of an attorney-in-fact with
5 respect to whom an interinsurer or a reciprocal
6 insurer has made the election under Section 835 of
7 the Internal Revenue Code, 26 U.S.C. 835, an amount
8 equal to the excess, if any, of the amounts paid or
9 incurred by that interinsurer or reciprocal insurer
10 in the taxable year to the attorney-in-fact over the
11 deduction allowed to that interinsurer or reciprocal
12 insurer with respect to the attorney-in-fact under
13 Section 835(b) of the Internal Revenue Code for the
14 taxable year; and
15 (S) For taxable years ending on or after
16 December 31, 1997, in the case of a Subchapter S
17 corporation, an amount equal to all amounts of
18 income allocable to a shareholder subject to the
19 Personal Property Tax Replacement Income Tax imposed
20 by subsections (c) and (d) of Section 201 of this
21 Act, including amounts allocable to organizations
22 exempt from federal income tax by reason of Section
23 501(a) of the Internal Revenue Code. This
24 subparagraph (S) is exempt from the provisions of
25 Section 250.
26 (3) Special rule. For purposes of paragraph (2)
27 (A), "gross income" in the case of a life insurance
28 company, for tax years ending on and after December 31,
29 1994, shall mean the gross investment income for the
30 taxable year.
31 (c) Trusts and estates.
32 (1) In general. In the case of a trust or estate,
33 base income means an amount equal to the taxpayer's
34 taxable income for the taxable year as modified by
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1 paragraph (2).
2 (2) Modifications. Subject to the provisions of
3 paragraph (3), the taxable income referred to in
4 paragraph (1) shall be modified by adding thereto the sum
5 of the following amounts:
6 (A) An amount equal to all amounts paid or
7 accrued to the taxpayer as interest or dividends
8 during the taxable year to the extent excluded from
9 gross income in the computation of taxable income;
10 (B) In the case of (i) an estate, $600; (ii) a
11 trust which, under its governing instrument, is
12 required to distribute all of its income currently,
13 $300; and (iii) any other trust, $100, but in each
14 such case, only to the extent such amount was
15 deducted in the computation of taxable income;
16 (C) An amount equal to the amount of tax
17 imposed by this Act to the extent deducted from
18 gross income in the computation of taxable income
19 for the taxable year;
20 (D) The amount of any net operating loss
21 deduction taken in arriving at taxable income, other
22 than a net operating loss carried forward from a
23 taxable year ending prior to December 31, 1986;
24 (E) For taxable years in which a net operating
25 loss carryback or carryforward from a taxable year
26 ending prior to December 31, 1986 is an element of
27 taxable income under paragraph (1) of subsection (e)
28 or subparagraph (E) of paragraph (2) of subsection
29 (e), the amount by which addition modifications
30 other than those provided by this subparagraph (E)
31 exceeded subtraction modifications in such taxable
32 year, with the following limitations applied in the
33 order that they are listed:
34 (i) the addition modification relating to
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1 the net operating loss carried back or forward
2 to the taxable year from any taxable year
3 ending prior to December 31, 1986 shall be
4 reduced by the amount of addition modification
5 under this subparagraph (E) which related to
6 that net operating loss and which was taken
7 into account in calculating the base income of
8 an earlier taxable year, and
9 (ii) the addition modification relating
10 to the net operating loss carried back or
11 forward to the taxable year from any taxable
12 year ending prior to December 31, 1986 shall
13 not exceed the amount of such carryback or
14 carryforward;
15 For taxable years in which there is a net
16 operating loss carryback or carryforward from more
17 than one other taxable year ending prior to December
18 31, 1986, the addition modification provided in this
19 subparagraph (E) shall be the sum of the amounts
20 computed independently under the preceding
21 provisions of this subparagraph (E) for each such
22 taxable year;
23 (F) For taxable years ending on or after
24 January 1, 1989, an amount equal to the tax deducted
25 pursuant to Section 164 of the Internal Revenue Code
26 if the trust or estate is claiming the same tax for
27 purposes of the Illinois foreign tax credit under
28 Section 601 of this Act;
29 (G) An amount equal to the amount of the
30 capital gain deduction allowable under the Internal
31 Revenue Code, to the extent deducted from gross
32 income in the computation of taxable income; and
33 (G-5) For taxable years ending after December
34 31, 1997, an amount equal to any eligible
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1 remediation costs that the trust or estate deducted
2 in computing adjusted gross income and for which the
3 trust or estate claims a credit under subsection (l)
4 of Section 201;
5 and by deducting from the total so obtained the sum of
6 the following amounts:
7 (H) An amount equal to all amounts included in
8 such total pursuant to the provisions of Sections
9 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and
10 408 of the Internal Revenue Code or included in such
11 total as distributions under the provisions of any
12 retirement or disability plan for employees of any
13 governmental agency or unit, or retirement payments
14 to retired partners, which payments are excluded in
15 computing net earnings from self employment by
16 Section 1402 of the Internal Revenue Code and
17 regulations adopted pursuant thereto;
18 (I) The valuation limitation amount;
19 (J) An amount equal to the amount of any tax
20 imposed by this Act which was refunded to the
21 taxpayer and included in such total for the taxable
22 year;
23 (K) An amount equal to all amounts included in
24 taxable income as modified by subparagraphs (A),
25 (B), (C), (D), (E), (F) and (G) which are exempt
26 from taxation by this State either by reason of its
27 statutes or Constitution or by reason of the
28 Constitution, treaties or statutes of the United
29 States; provided that, in the case of any statute of
30 this State that exempts income derived from bonds or
31 other obligations from the tax imposed under this
32 Act, the amount exempted shall be the interest net
33 of bond premium amortization;
34 (L) With the exception of any amounts
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1 subtracted under subparagraph (K), an amount equal
2 to the sum of all amounts disallowed as deductions
3 by (i) Sections 171(a) (2) and 265(a)(2) of the
4 Internal Revenue Code, as now or hereafter amended,
5 and all amounts of expenses allocable to interest
6 and disallowed as deductions by Section 265(1) of
7 the Internal Revenue Code of 1954, as now or
8 hereafter amended; and (ii) for taxable years ending
9 on or after August 13, 1999, Sections 171(a)(2),
10 265, 280C, and 832(b)(5)(B)(i) of the Internal
11 Revenue Code; the provisions of this subparagraph
12 are exempt from the provisions of Section 250;
13 (M) An amount equal to those dividends
14 included in such total which were paid by a
15 corporation which conducts business operations in an
16 Enterprise Zone or zones created under the Illinois
17 Enterprise Zone Act and conducts substantially all
18 of its operations in an Enterprise Zone or Zones;
19 (N) An amount equal to any contribution made
20 to a job training project established pursuant to
21 the Tax Increment Allocation Redevelopment Act;
22 (O) 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 (M) of paragraph (2) of this subsection shall not be
30 eligible for the deduction provided under this
31 subparagraph (O);
32 (P) An amount equal to the amount of the
33 deduction used to compute the federal income tax
34 credit for restoration of substantial amounts held
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1 under claim of right for the taxable year pursuant
2 to Section 1341 of the Internal Revenue Code of
3 1986; and
4 (Q) For taxable year 1999 and thereafter, an
5 amount equal to the amount of any (i) distributions,
6 to the extent includible in gross income for federal
7 income tax purposes, made to the taxpayer because of
8 his or her status as a victim of persecution for
9 racial or religious reasons by Nazi Germany or any
10 other Axis regime or as an heir of the victim and
11 (ii) items of income, to the extent includible in
12 gross income for federal income tax purposes,
13 attributable to, derived from or in any way related
14 to assets stolen from, hidden from, or otherwise
15 lost to a victim of persecution for racial or
16 religious reasons by Nazi Germany or any other Axis
17 regime immediately prior to, during, and immediately
18 after World War II, including, but not limited to,
19 interest on the proceeds receivable as insurance
20 under policies issued to a victim of persecution for
21 racial or religious reasons by Nazi Germany or any
22 other Axis regime by European insurance companies
23 immediately prior to and during World War II;
24 provided, however, this subtraction from federal
25 adjusted gross income does not apply to assets
26 acquired with such assets or with the proceeds from
27 the sale of such assets; provided, further, this
28 paragraph shall only apply to a taxpayer who was the
29 first recipient of such assets after their recovery
30 and who is a victim of persecution for racial or
31 religious reasons by Nazi Germany or any other Axis
32 regime or as an heir of the victim. The amount of
33 and the eligibility for any public assistance,
34 benefit, or similar entitlement is not affected by
SB902 Engrossed -27- LRB9205921SMdv
1 the inclusion of items (i) and (ii) of this
2 paragraph in gross income for federal income tax
3 purposes. This paragraph is exempt from the
4 provisions of Section 250.
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
10 set aside for charitable purposes pursuant to Internal
11 Revenue 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
17 in paragraph (1) shall be modified by adding thereto the
18 sum of the following amounts:
19 (A) An amount equal to all amounts paid or
20 accrued to the taxpayer as interest or dividends
21 during the taxable year to the extent excluded from
22 gross income in the computation of taxable income;
23 (B) An amount equal to the amount of tax
24 imposed by this Act to the extent deducted from
25 gross income for the taxable year;
26 (C) The amount of deductions allowed to the
27 partnership pursuant to Section 707 (c) of the
28 Internal Revenue Code in calculating its taxable
29 income; and
30 (D) An amount equal to the amount of the
31 capital gain deduction allowable under the Internal
32 Revenue Code, to the extent deducted from gross
33 income in the computation of taxable income;
34 and by deducting from the total so obtained the following
SB902 Engrossed -28- LRB9205921SMdv
1 amounts:
2 (E) The valuation limitation amount;
3 (F) An amount equal to the amount of any tax
4 imposed by this Act which was refunded to the
5 taxpayer and included in such total for the taxable
6 year;
7 (G) An amount equal to all amounts included in
8 taxable income as modified by subparagraphs (A),
9 (B), (C) and (D) which are exempt from taxation by
10 this State either by reason of its statutes or
11 Constitution or by reason of the Constitution,
12 treaties or statutes of the United States; provided
13 that, in the case of any statute of this State that
14 exempts income derived from bonds or other
15 obligations from the tax imposed under this Act, the
16 amount exempted shall be the interest net of bond
17 premium amortization;
18 (H) Any income of the partnership which
19 constitutes personal service income as defined in
20 Section 1348 (b) (1) of the Internal Revenue Code
21 (as in effect December 31, 1981) or a reasonable
22 allowance for compensation paid or accrued for
23 services rendered by partners to the partnership,
24 whichever is greater;
25 (I) An amount equal to all amounts of income
26 distributable to an entity subject to the Personal
27 Property Tax Replacement Income Tax imposed by
28 subsections (c) and (d) of Section 201 of this Act
29 including amounts distributable to organizations
30 exempt from federal income tax by reason of Section
31 501(a) of the Internal Revenue Code;
32 (J) With the exception of any amounts
33 subtracted under subparagraph (G), an amount equal
34 to the sum of all amounts disallowed as deductions
SB902 Engrossed -29- LRB9205921SMdv
1 by (i) Sections 171(a) (2), and 265(2) of the
2 Internal Revenue Code of 1954, as now or hereafter
3 amended, and all amounts of expenses allocable to
4 interest and disallowed as deductions by Section
5 265(1) of the Internal Revenue Code, as now or
6 hereafter amended; and (ii) for taxable years ending
7 on or after August 13, 1999, Sections 171(a)(2),
8 265, 280C, and 832(b)(5)(B)(i) of the Internal
9 Revenue Code; the provisions of this subparagraph
10 are exempt from the provisions of Section 250;
11 (K) An amount equal to those dividends
12 included in such total which were paid by a
13 corporation which conducts business operations in an
14 Enterprise Zone or zones created under the Illinois
15 Enterprise Zone Act, enacted by the 82nd General
16 Assembly, and which does not conduct such operations
17 other than in an Enterprise Zone or Zones;
18 (L) An amount equal to any contribution made
19 to a job training project established pursuant to
20 the Real Property Tax Increment Allocation
21 Redevelopment Act;
22 (M) An amount equal to those dividends
23 included in such total that were paid by a
24 corporation that conducts business operations in a
25 federally designated Foreign Trade Zone or Sub-Zone
26 and that is designated a High Impact Business
27 located in Illinois; provided that dividends
28 eligible for the deduction provided in subparagraph
29 (K) of paragraph (2) of this subsection shall not be
30 eligible for the deduction provided under this
31 subparagraph (M); and
32 (N) An amount equal to the amount of the
33 deduction used to compute the federal income tax
34 credit for restoration of substantial amounts held
SB902 Engrossed -30- LRB9205921SMdv
1 under claim of right for the taxable year pursuant
2 to Section 1341 of the Internal Revenue Code of
3 1986.
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
SB902 Engrossed -31- LRB9205921SMdv
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
SB902 Engrossed -32- LRB9205921SMdv
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
SB902 Engrossed -33- LRB9205921SMdv
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
SB902 Engrossed -34- LRB9205921SMdv
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. 90-491, eff. 1-1-98; 90-717, eff. 8-7-98;
28 90-770, eff. 8-14-98; 91-192, eff. 7-20-99; 91-205, eff.
29 7-20-99; 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676,
30 eff. 12-23-99; 91-845, eff. 6-22-00; 91-913, eff. 1-1-01;
31 revised 1-15-01.)
32 Section 15. The Illinois Prepaid Tuition Act is amended
SB902 Engrossed -35- LRB9205921SMdv
1 by changing Section 55 as follows:
2 (110 ILCS 979/55)
3 Sec. 55. Tax exemption. The assets of the Illinois
4 Prepaid Tuition Trust Fund and its income and operation shall
5 be exempt from all taxation by the State of Illinois and any
6 of its subdivisions. The accrued earnings of Illinois
7 prepaid tuition contracts once disbursed on behalf of an
8 eligible beneficiary shall be similarly exempt from all
9 taxation by the State of Illinois and any of its
10 subdivisions, so long as they are used for educational
11 purposes in accordance with the provisions of an Illinois
12 prepaid tuition contract. The amount spent by a purchaser of
13 an Illinois prepaid tuition contract during the taxable year
14 may be deducted from adjusted gross income as provided in
15 Section 203 of the Illinois Income Tax Act. The provisions of
16 this Section are exempt from the provisions of Section 250 of
17 the Illinois Income Tax Act.
18 (Source: P.A. 90-546, eff. 12-1-97; 91-867, eff. 6-22-00.)
19 Section 99. Effective date. This Act takes effect upon
20 becoming law.
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