Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart C - NET OPERATING LOSSES OF UNITARY BUSINESS GROUPS OCCURRING PRIOR TO DECEMBER 31, 1986 › Section 100.2240 - Net Operating Losses Occurring Prior to December 31, 1986, of Unitary Business Groups: Treatment by Members of the Unitary Business Group: (IITA Section 202) - Effect of Combined Net Operating Loss in Computing Illinois Base Income

Current through Register Vol. 48, No. 28, July 12, 2024
a) For purposes
				of computing the group's combined Illinois base income or equivalent, the
				group's combined net operating loss (after giving effect to inter member
				eliminations) can be used to offset the group's combined excess addition
				modifications. This combined net operating loss (after giving effect to inter
				member eliminations) can be used to offset the group's combined excess addition
				modifications. The group's combined excess addition modifications is defined as
				the total of all addition modifications required by IITA Section 203 (except
				that prescribed by IITA Section 203(b)(2)(E) and Section 203(c)(2)(E)) for all
				members of the group, less the total of all subtraction modifications required
				by IITA Section 203 for all members of the group.
b) However, each group member allowed to
				carryback or forward a portion of the group's combined federal net operating
				loss from a year in which that combined federal net operating loss was used to
				offset any portion of the group's combined excess addition modifications, must
				take as an addition modification in the carryback and carryforward year its
				respective share of the NOL addition modification required by IITA Section
				203(b)(2)(E) and (c)(2)(E). These respective shares shall be determined in the
				same manner that the share of the combined federal net operating loss of each
				member was determined under Section
				100.2230(b)
				of this Part. The amount of the NOL addition modification actually required to
				be shown in the carryback or carryforward year by any member of the group
				shall, however, be limited to the amount of loss actually carried to such year
				by the group member.
1) EXAMPLE 1:
A) FACTS:
i) For 1981, Corporation A filed a separate
				federal income tax return showing a federal taxable income of $35,000 and an
				Illinois income tax return reflecting Illinois liability calculated from the
				$35,000 federal taxable income on a non-combined apportionment basis. For 1984,
				Corporation A filed a separate federal income tax return showing a net
				operating loss of $100,000 and an Illinois income tax return reflecting that
				Corporation A was a member of the same unitary business group as three other
				corporations - B, C and D - each of which was formed on the first day of the
				1984 taxable year. The federal taxable incomes (NOL) for the Illinois income
				tax purposes and the addition and subtraction modifications of Corporations A,
				B, C and D for 1984 are as follows:
Fed. Taxable Income (NOL) For Ill. Income Tax
							 Purposes
Total Addition Modifications
Total Subtraction Modifications
Excess Addition Modifications
Corp.
A
(100,000)
65,000
40,000
25,000
Corp.
B
60,000
20,000
5,000
15,000
Corp.
C
(30,000)
0
15,000
(15,000)
Corp.
D
20,000
0
0
0
Total
(50,000)
85,000
60,000
25,000
ii)
				Shortly after filing its 1984 return, Corporation A filed an amended federal
				income tax return for 1981 claiming on appropriate refund based on the
				carryback of the $100,000 NOL from 1984 against the 1981 taxable income. The
				refund was paid shortly after the claim was filed and Corporation A is now
				engaged in preparing an appropriate parallel claim for refund of Illinois
				income tax liability under 86 Ill. Adm. Code
				100.2200.