reglab/statecodes huggingface dataset:
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.03 - Basis In Subchapter K Entity

Current through Register Vol. 42, No. 9, June 28, 2024
(1) For all taxable years with respect to
			 which a preliminary assessment of income tax could be made under the provisions
			 of §
								40-2A-7,
Code of Ala. 1975
, as of May 27, 1997, and thereafter:
(a) Basis of property to subchapter K entity
			 - A subchapter K entity's basis in property contributed to it under §
									40-18-8(o),Code
			 of Ala. 1975, by a partner or member shall be determined according to  26 U.S.C. §
										723.
(b) Basis of interest in
			 subchapter K entity -
1. A contributing
			 partner's or member's initial basis in a subchapter K entity interest acquired
			 by a contribution of property (including money as described in §
										40-18-8 [o]) to the subchapter K entity shall be determined according to  26 U.S.C. §
											722.
2. Increases and
			 decreases to the initial basis determined under paragraph 1 shall be made
			 according to  26 U.S.C. §
											705, and those adjustments to the initial basis
			 shall be determined without regard to the allocation and apportionment rules of
			 Section
			 40-18-22.
3. Special basis adjustments - The basis of
			 the property of the subchapter K entity shall be determined according to  26 U.S.C. §§
											734 and  743, if the subchapter K entity has in effect an
			 election under  26 U.S.C. §
											754  (relating to optional adjustment to basis of
			 partnership property).
(c) Basis of property distributed by
			 subchapter K entity - The basis of property (other than money) distributed by a
			 subchapter K entity to a partner or member other than in liquidation of the
			 partner's or member's interest shall be determined according to  26 U.S.C. §
										732.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.04 - Basis Of Property Acquired By Gift Or Transfer In Trust

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Property
			 Acquired After December 31, 1997. The basis of property acquired by gift or by
			 a transfer in trust shall be determined according to  26 U.S.C. §
									1015. For
			 interpretation of federal statutes adopted by the Alabama Legislature see Rule
			 810-3-1.1 -.01, Operating Rules.
(2)
			 Property Acquired After March 14, 1985, but before January 1, 1998. The basis
			 shall be the same as the basis would be in the hands of the donor or the last
			 preceding owner from whom the property was not acquired by gift; except that if
			 such basis is greater than the fair market value of the property then for the
			 purpose of determining the amount of loss the basis shall be the fair market
			 value.
(a) Donor's Basis Unknown. If the
			 basis of the property acquired by gift or transfer in trust after March 14,
			 1985, is unknown to the donee, the Department will attempt to obtain such facts
			 as to determine the basis in the hands of the donor or the last owner who did
			 not receive the property by gift or a transfer in trust. If the Department is
			 unable to obtain such facts, the basis of the property will be determined,
			 according to the best information available to the Department, to be the fair
			 market value of the property at the time acquired by the donor or last
			 preceding owner.
(b) Transfer in
			 Trust Other Than Gift, Bequest, or Devise. If the property was acquired by a
			 transfer in trust, other than a transfer in trust by a gift, bequest or devise,
			 the basis shall be the same as in the hands of the grantor, increased by the
			 amount of gain (or decreased by the amount of loss) recognized by the grantor
			 on such transfer of the property.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.05 - Property Transmitted At Death

Current through Register Vol. 42, No. 9, June 28, 2024
(1) After December 31, 1997: The basis of
			 property acquired from a decedent will be determined according to  26 U.S.C. §
									1014. For interpretation of federal statutes adopted by the Alabama
			 Legislature see Rule 810-3-1.1 -.01, Operating Rules.
(2) Prior to January 1, 1998: Basis for the
			 following shall be the fair market value of the property at the time of
			 decedent's death:
(a) Personal property
			 acquired by specific bequest,
(b)
			 Real property acquired by general or specific devise or by intestacy,
(c) Property acquired by the decedent's
			 estate from the decedent.
(d) In
			 all other cases of property acquired by will or intestacy, basis shall be the
			 fair and reasonable market value of the property at the time of distribution to
			 the taxpayer.
(e) The value of
			 property as of the date of the decedent's death as appraised for the purpose of
			 the federal estate tax or the alternate value as appraised for such purpose,
			 whichever is applicable, shall be deemed to be its fair market value.
Author:
Ed Cutter, CPA
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.06 - Basis Of Property Acquired Upon Like-Kind Exchange

Current through Register Vol. 42, No. 9, June 28, 2024
(1) After December 31, 1984: The basis of
			 property acquired in a like-kind exchange shall be determined according to  26 U.S. C. §
									1031. For interpretation of federal statutes adopted by the
			 Alabama Legislature see Rule 810-3-1.1 -.01, Operating Rules.
(2) Prior to January 1, 1985: The basis of
			 property acquired in a like-kind exchange is the same as that of the property
			 exchanged less the amount of money and the fair market value of other property
			 received, less any loss (or plus any gain) recognized on the exchange.
(a) Corporate Stock. This rule does not apply
			 in case of property received by a corporation in whole or in part in exchange
			 for the stock or securities of that corporation.
(b) Mixed Exchanges. If the property acquired
			 consisted of both like and unlike property, the basis shall be allocated
			 between the properties (other than money) received, and for the purpose of
			 allocation there shall be assigned to the unlike property an amount equal to
			 its fair market value at the date of the exchange.
Authors:
Lloyd B. Byrd, Judy A.
				Robbins
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.07 - Basis Of Property Transferred To A Corporation

Current through Register Vol. 42, No. 9, June 28, 2024
(1) For tax periods beginning after December
			 31, 1984:
(a) the basis of property received
			 by a distributee in a transaction described in subsection (e) or (f) of §
									40-18-8,
Code of Ala. 1975
, shall be determined in accordance
			 with  26 U.S.C. §
										358. For interpretation of federal statutes adopted by the
			 Alabama Legislature see Rule 810-3-1.1 -.01, Operating Rules.
(b) the basis of property acquired by a
			 corporation in a transaction described in subsection (e) or (f) of §
									40-18-8,
			 shall be determined in accordance with  26 U.S.C. §
										362. For interpretation
			 of federal statutes adopted by the Alabama Legislature see Rule 810-3-1.1 -.01,
			 Operating Rules.
(c) Transactions
			 described in subsection (e) or (f) of §
									40-18-8 are those transactions meeting the requirements of  26 U.S.C. §
										351, where
			 property is transferred to a corporation controlled by the transferor, or those
			 reorganizations as defined by  26 U.S.C. §368.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.08 - Basis Of Property Acquired On Liquidation Of A Subsidiary

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Basis of
			 Property Acquired on Liquidation of Subsidiary. The basis of property acquired
			 by a corporation as a result of a liquidation of a subsidiary to which §
								40-18-8(h),
Code of Ala. 1975
, applies shall be determined in
			 accordance with  26 U.S.C. §
									334(b). For interpretation of federal statutes
			 adopted by the Alabama Legislature see Rule 810-3-1.1 -.01, Operating
			 Rules.
(2)
								§
								40-18-8(h) concerns the complete liquidation of subsidiaries satisfying the requirements
			 of  26 U.S.C. §
									332.
Author:
Ed Cutter, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-6.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.09 - Basis Of Property Of A Subsidiary After Acquisition

Current through Register Vol. 42, No. 9, June 28, 2024
If an election under  26 U.S.C. §
									338  is in effect for
				federal income tax purposes, the basis of property owned by a corporation shall
				be determined under  26 U.S.C. §
									338  relating to the treatment of certain
				stock purchases as asset acquisitions. For interpretation of federal statutes
				adopted by the Alabama Legislature see Rule 810-3-1.1 -.01, Operating
				Rules.
Author:
Ed Cutter, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-6.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.10 - Basis Of Property Received In Liquidation In Which Gain Or Loss Is Recognized

Current through Register Vol. 42, No. 9, June 28, 2024
If property is received in a distribution in complete
				liquidation in which a gain or loss is recognized on receipt of the property,
				the basis of the property received shall be determined in accordance with  26 U.S.C. §
									334(a). For interpretation of federal statutes adopted by the
				Alabama Legislature see Rule 810-3-1.1 -.01, Operating Rules.
Author:
Ed Cutter, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-6.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.11 - Basis Of Stock After Stock Dividend

Current through Register Vol. 42, No. 9, June 28, 2024
The basis of stock with respect to which a corporation makes a
				distribution of its stock and the basis of the stock distributed shall be
				determined in accordance with  26 U.S.C. §
									307. For interpretation of
				federal statutes adopted by the Alabama Legislature see Rule 810-3-1.1 -.01,
				Operating Rules.
Author:
Ed Cutter, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-6.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.12 - Basis Of Property Acquired In Connection With An Involuntary Conversion

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
			 After December 31, 1984. The basis of property acquired in connection with an
			 involuntary conversion in which a gain or loss was not recognized shall be
			 determined according to  26 U.S.C. §
									1033. For interpretation of federal
			 statutes adopted by the Alabama Legislature see Rule 810-3-1.1 -.01, Operating
			 Rules.
(2) Prior to January 1,
			 1985. The basis of property acquired in connection with an involuntary
			 conversion (as described in §
								40-18-8(f),
Code of Ala. 1975
, in effect prior to January 1, 1985)
			 shall be the same as the property converted, less the amount of money received
			 but not expended by the taxpayer, increased by any recognized gain or decreased
			 by any recognized loss upon the conversion.
Author:
Judy A. Robbins
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-6.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.13 - Basis Of Property Acquired Before January 1, 1933

Current through Register Vol. 42, No. 9, June 28, 2024
If property was acquired prior to January 1, 1933, the basis
				for determination of gain, loss, depreciation or depletion is the fair market
				value on January 1, 1933.
Author:
Ed Cutter, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-6.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.14 - Basis Of Property Acquired From A Spouse Or Former Spouse

Current through Register Vol. 42, No. 9, June 28, 2024
(1) The basis of
			 property received from a spouse or former spouse in a transaction in which a
			 gain or loss was determined under §
								40-18-8(m),
Code of Ala. 1975
, shall be determined in accordance
			 with  26 U.S.C. §
									1041. For interpretation of federal statutes adopted by
			 the Alabama Legislature see Rule 810-3-1.1 -.01, Operating Rules.
(2) Section
			 40-18-8(m) concerns the transfer of property to a spouse or former spouse.
Author:
Ed Cutter, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-6.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.15 - Basis Of Replacement Property In Sale Of Stock To An Employee Stock Ownership Plan Or Cooperative

Current through Register Vol. 42, No. 9, June 28, 2024
If securities are sold to an employee stock ownership plan or
				an eligible work-owned cooperative, and gain was not recognized pursuant to
				§
								40-18-8(n),
Code of Ala. 1975
, the basis of the qualified
				replacement property, as defined by  26 U.S.C. §
									1042, shall be determined
				in accordance with  26 U.S.C. §
									1042(d). For interpretation of federal
				statutes adopted by the Alabama Legislature see Rule 810-3-1.1 -.01, Operating
				Rules.
Author:
Ed Cutter, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-6.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.16 - Basis Of Property Of Individuals Establishing Alabama Domicile

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Effective for
			 tax years beginning after December 31, 1997, the basis of both real and
			 personal property owned by an individual on the date Alabama domicile is
			 established shall be the same basis as is used for federal income tax purposes
			 on that date.
(2) Example 1:
			 Taxpayer owns an IRA for which all contributions made were deducted from the
			 taxpayer's income for federal income tax purposes. The taxpayer establishes
			 Alabama domicile on January 1, 1998. The basis for the IRA for Alabama income
			 tax purposes is zero, upon the establishment of Alabama domicile.
(3) Example 2: Taxpayer owns a truck with an
			 original cost of $100,000 and an adjusted basis of $80,000 as of December 31,
			 1997. On January 1, 1998, the taxpayer establishes Alabama domicile. The
			 adjusted basis in the truck for Alabama income tax purposes is $80,000, upon
			 the establishment of Alabama domicile.
Author:
Ed Cutter, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-6.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS › Section 810-3-6-.17 - Allocation Of Basis

Current through Register Vol. 42, No. 9, June 28, 2024
Effective for tax years beginning after December 31, 1997, if
				property is acquired in an applicable asset acquisition as defined by  26 U.S.C. §
									1060, the basis of the acquired property shall be determined in
				accordance with  26 U.S.C. §
									1060. Federal regulations and determinations
				for  26 U.S.C. §
									1060  will be followed in the administration of this
				section.
Author:
Ed Cutter, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-6.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-7 - GAIN OR LOSS - DETERMINATION OF AMOUNT › Section 810-3-7-.01 - Computation Of Realized Gain Or Loss

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed).
Author:
Income Tax Division
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-18-7,
				  40-18-57.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.01 - Recognition Of Gain Or Loss

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
			 For transactions closed before January 1, 1985, gain or loss shall be
			 recognized in accordance with the following rules:
(a) The Federal Internal Revenue Code
			 contains provisions similar to those in §
									40-18-8,
Code of Ala. 1975
. Decisions and interpretations of
			 the federal courts and agencies will be given due weight in interpreting this
			 section. The terms "property of like kind," "for productive use," and "party to
			 a reorganization" are considered to have the same meaning as in federal
			 taxation. The terms "control" and "reorganization" as defined in §
									40-18-8 have a somewhat different meaning from the same terms as used in Federal
			 taxation.
(b) The entire amount of
			 gain or loss realized upon the sale or exchange of property shall normally be
			 recognized on the tax return for that year. Exceptions from the general rule
			 are made in §
									40-18-8 with respect to certain exchanges of property in which at the time of the
			 exchange the particular differences existing between the property disposed of
			 and the property acquired are more formal than substantial. The law provides
			 that such differences shall not be deemed controlling and that gain or loss
			 shall not be recognized at the time of the exchange. The underlying assumption
			 of these exceptions is that the new property is substantially a continuation of
			 the old investment.
(c) The
			 exceptions from the general rule requiring the recognition of all gains and
			 losses are strictly construed. Nonrecognition is accorded by the law only if
			 the exchange is one which satisfies both the specific description in the law of
			 an excepted exchange, and the underlying purpose for which such exchange is
			 excepted from the general rule.
(d)
			 The law makes specific provision for the case in which, in addition to property
			 which may be received tax-free on the exchange, additional money or property is
			 received. In such a case, gain is recognized to the extent of the additional
			 property or money, but no loss of any kind is recognized.
(e) To constitute an exchange within the
			 meaning of this section the transaction must be a reciprocal transfer of
			 property, as distinguished from a transfer of property for money consideration
			 only.
(f) For nonrecognition of
			 gain on the sale of a personal residence in the year of the sale, see §
									40-18-14,
Code of Ala. 1975
, Regs.
			 810-3-14-.07 and
			 810-3-14-.08.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.02 - Like-Kind Exchanges Of Property Held For Productive Use In Trade Or Business Or For Investment

Current through Register Vol. 42, No. 9, June 28, 2024
(1) If
			 an exchange of property occurring after December 31, 1984, satisfies the
			 requirements of  26 U.S.C. §
									1031, relating to like-kind exchanges, then the
			 amount of gain or loss recognized in the exchange shall be determined in
			 accordance with  26 U.S.C. §
									1031. For interpretation of federal statutes
			 adopted by the Alabama Legislature see Rule 810-3-1 -.1 -.01, Operating
			 Rules.
(2) Transactions occurring
			 prior to January 1, 1985: As used in §
								40-18-8(b)(1),
Code of Ala. 1975
, the words "like kind" have
			 reference to the nature of the property and not to its grade or quality. One
			 kind or class of property may not, under such subsection, be exchanged for
			 property of a different kind or class. The fact that any real estate involved
			 is improved or unimproved is not material, for such fact relates only to the
			 grade or quality of the property and not to its kind or class. Unproductive
			 real estate held by one, other than a dealer, for future use or future
			 realization of the increment in value comes within the meaning of this
			 subsection.
(a) No gain or loss is recognized
			 if:
1. a taxpayer exchanges property held for
			 productive use in his trade or business, together with cash, for other property
			 of like kind for the same use, such as a truck for a new truck to be used for a
			 like purpose, or
2. a taxpayer, who
			 is not a dealer in real estate, exchanges city real estate for a farm, or
			 improved real estate for unimproved real estate, or
3. a taxpayer exchanges investment property
			 and cash for investment property of a like kind.
Author:
Edward F. Cutter, CPA
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.03 - Stock For Stock Of The Same Corporation

Current through Register Vol. 42, No. 9, June 28, 2024
Federal regulations and decisions of federal courts and
				agencies regarding the exchange of stock for stock of the same corporation will
				generally be followed in the interpretation of this rule. See also Rule
				810-3-1.1 -.01, Operating Rules for, Interpretation of federal statutes adopted
				by the Alabama Legislature.
Authors:
Verlon R. Frost, Jeff Taylor, Ed Cutter,
				CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-5,
				  40-18-8.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.04 - Exchanges In Pursuance Of A Plan Of Reorganization

Current through Register Vol. 42, No. 9, June 28, 2024
(1) For transactions after December 31, 1984,
			 federal interpretations pertaining to  26 U.S.C. §§
									354, 355, 356, 361, 371 and 374  will be followed in determining the amount of gain or loss
			 recognized as the result of a reorganization specified in  26 U.S.C. §
									368 or a distribution that qualifies under  26 U.S.C. §
									355. For interpretation
			 of federal statutes adopted by the Alabama Legislature see Rule 810-3-1.1 -.01,
			 Operating Rules.
(2) For
			 transactions before January 1, 1985 -
(a) For
			 the purpose of this rule the term "reorganization" means:
1. The merger of one or more corporations in
			 accordance with statutory authority into another;
2. The consolidation pursuant to statutory
			 authority of two or more corporations into a new corporation;
3. The acquisition by one corporation of at
			 least a majority of the voting stock, or substantially all the properties of
			 another corporation;
4. The
			 transfer by one corporation of all or a part of its assets to another, if
			 immediately after the transfer the first corporation or its stockholders, or
			 both, are in control of the second corporation (control for this purpose being
			 defined in §
										40-18-8(j),
Code of Ala. 1975
, as the ownership by the first
			 corporation or its stockholders, or both, of the second corporation to the
			 extent of at least fifty-one percent of the voting stock and at least eighty
			 percent of the total number of shares of all other classes thereof);
5. A recapitalization;
6. A mere change in identity, form or place
			 of organization, however effected.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.05 - Transfer Of Property To Corporation Controlled By Transferor

Current through Register Vol. 42, No. 9, June 28, 2024
(1) For
			 transactions after December 31, 1984.
(a) If
			 property is transferred to a corporation in a transaction which satisfies the
			 requirements of  26 U.S.C. §
										351, relating to transfers to corporations
			 controlled by the transferor, the amount of gain or loss shall be determined in
			 accordance with  26 U.S.C. §
										351, as modified by  26 U.S.C. §
										357,
			 relating to the recognition of gain as a result of the transferee corporation's
			 assumption of liabilities.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.06 - Involuntary Conversions

Current through Register Vol. 42, No. 9, June 28, 2024
For transactions occurring after December 31, 1984, if a
				taxpayer makes a valid election under  26 U.S.C. §
									1033  (relating to
				involuntary conversions) for federal income tax purposes, the amount of gain
				recognized for Alabama income tax purposes shall be determined according to  26 U.S.C. §
									1033. For interpretation of federal statutes adopted by the
				Alabama Legislature see Rule 810-3-1.1.01, Operating Rules.
Authors:
Edward F. Cutter, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-18-8,
				  40-18-57.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.07 - Rollover Of Gain On Sale Of Principal Residence

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed 6/2/99)
Authors:
Royce Lader, Ann F. Winborne,
				CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-18-8.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.08 - Exchange Of Stock For Property

Current through Register Vol. 42, No. 9, June 28, 2024
For transactions occurring after December 31, 1984, no gain or
				loss will be recognized by a corporation on the receipt of money or other
				property in exchange for the stock of the corporation, including treasury stock
				or with respect to the acquisition or lapse of an option to buy or sell its
				stock. Federal regulations and decisions of federal courts and agencies
				regarding the exchange of stock for property will generally be followed in the
				administration of this regulation.
Authors:
Verlon R. Frost, Jeff
				Taylor
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-18-8,
				  40-18-57.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.09 - Complete Liquidation Of Subsidiaries

Current through Register Vol. 42, No. 9, June 28, 2024
(1) For transactions occurring after December
			 31, 1984, no gain or loss shall be recognized on the receipt by a corporation
			 of property distributed in complete liquidation of another corporation as
			 described in  26 U.S.C. §
									332. For interpretation of federal statutes
			 adopted by the Alabama Legislature see Rule 810-3-1.1 -.01, Operating
			 Rules.
(2) See Reg.
			 810-3-6-.02 for determining the basis of property received by a corporation in a
			 distribution under this rule.
Authors:
Verlon R. Frost, Jeff
				Taylor
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-18-8,
				  40-18-57.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.10 - Gain Or Loss On Certain Liquidations

Current through Register Vol. 42, No. 9, June 28, 2024
(1) For transactions after December 31, 1984
			 and before August 1, 1986 -
(a) If, within
			 the twelve (12) month period beginning on the date on which a corporation
			 adopts a plan of complete liquidation, all of the assets of the corporation are
			 distributed in complete liquidation, (except for assets retained to meet
			 claims), then no gain or loss shall be recognized to such corporation from the
			 sale or exchange of property within such twelve (12) month period.
1. For the purposes of this subparagraph
			 (1)(a), the term "property" does not include -
(i) stock in trade of the corporation, or
			 other property of a kind which would properly be included in the inventory of
			 the corporation if on hand at the close of the taxable year, and property held
			 by the corporation primarily for sales to customers in the ordinary course of
			 its trade or business.
(ii)
			 installment obligations acquired in respect to the sale or exchange (without
			 regard to whether such sale or exchange occurred before, on, or after the date
			 of the adoption of the plan referred to in this subparagraph (1)(a)), of stock
			 in trade or other property described in subparagraph (1)(a)1.(i)
			 above.
(iii) installment
			 obligations acquired in respect of property (other than property described in
			 subparagraph (1)(a)1.(ii) above) sold or exchanged before the date of the
			 adoption of such plan of liquidation.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.11 - Election To Recognize Gain On Certain Liquidations

Current through Register Vol. 42, No. 9, June 28, 2024
(1) For transactions occurring after July 31,
			 1986 - the election to recognize gain on certain liquidations pertaining to  26 U.S.C. §
									333  has been repealed under the provisions of Act 90-583 and
			 Public Law 99-514.
(2) For
			 transactions after December 31, 1984, and before August 1, 1986 - In the case
			 of a shareholder who has made a valid election pursuant to  26 U.S.C. §
									333 to recognize gain in certain liquidations for federal income tax purposes, then
			 in the case of property distributed in complete liquidation of a corporation
			 incorporated under the laws of the United States, or any state or political
			 subdivision thereof, if -
(a) the liquidation
			 is made in pursuance of a plan of liquidation adopted, and
(b) the distribution is in complete
			 cancellation or redemption of all the stock, and the transfer of all the
			 property under the liquidation occurs within some one calendar month, then in
			 the case of each qualified electing shareholder (as defined in  26 U.S.C. §
										333) gain on the shares owned by him at the time of the adoption of the
			 plan of liquidation shall be recognized only to the extent provided in
			 paragraph (2) below.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.13 - Recognition of Gain by Target Corporations (Repealed)

Current through Register Vol. 42, No. 9, June 28, 2024
Authors:
Verlon R. Frost, Jeff Taylor
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-8.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.14 - Taxability of Corporation on Distribution (Repealed)

Current through Register Vol. 42, No. 9, June 28, 2024
Authors:
Verlon R. Frost, Jeff Taylor
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-8.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.15 - Nonrecognition Of Gain On Liquidation By Corporation

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed 1/18/00)
Authors:
Verlon R. Frost, Jeff
				Taylor
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-8.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.16 - Gain or Loss Recognized on Property in Complete Liquidation (Repealed)

Current through Register Vol. 42, No. 9, June 28, 2024
Authors:
Verlon R. Frost, Jeff Taylor
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-8.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.17 - Definition Of Reorganization Terms

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed 6/2/99)
Authors:
Verlon R. Frost, Jeff
				Taylor
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-8.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.18 - Recognition Of Gain Or Loss On Transfer Of Property To A Spouse Or Former Spouse

Current through Register Vol. 42, No. 9, June 28, 2024
The amount of gain or loss on the transfer of property to a
				spouse or former spouse shall be determined in accordance with  26 U.S.C. §
									1041. For interpretation of federal statutes adopted by the Alabama
				Legislature see Rule 180-3-1.1-.01, Operating Rules.
Authors:
Brenda J. Fincher, Judy A.
				Robbins
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-8.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.19 - Sales Of Stock To Employee Stock Ownership Plans Or Certain Cooperatives

Current through Register Vol. 42, No. 9, June 28, 2024
(1) The
			 amount of gain recognized by a taxpayer who has made a valid election under  26 U.S.C. §
									1042, relating to sales of stock to employee stock ownership plans
			 or certain cooperatives, shall be determined in accordance with  26 U.S.C. §
									1042.
(2) If a taxpayer
			 disposes of qualified replacement property, as defined by  26 U.S.C. §
									1042,
			 and recognizes gain under  26 U.S.C. §
									1042(e), then the gain shall be
			 recognized to the same extent and at the same time as under  26 U.S.C. §
									1042(e).
(3) For
			 interpretation of federal statutes adopted by the Alabama Legislature see Rule
			 810-3-1.1 -.01, Operating Rules.
Authors:
Verlon R. Frost, Jeff Taylor, Ed Cutter,
				CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7 -(a)(5),
				  40-18-1.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-8 - RECOGNITION OF GAIN OR LOSS › Section 810-3-8-.20 - Recognition Of Gain Or Loss On Transfer Of Property To And Distribution Of Property By A Subchapter K Entity

Current through Register Vol. 42, No. 9, June 28, 2024
(1) For all taxable years with respect to
			 which a preliminary assessment of income tax could be made under the provisions
			 of Section
			 40-2A-7,
			 Code of Alabama 1975, as of May 27, 1997, or thereafter:
(a) Contribution of property to a subchapter
			 K entity - The amount of gain or loss recognized on the contribution of
			 property to a subchapter K entity in exchange for an interest in the subchapter
			 K entity shall be determined in accordance with  26 U.S.C. §
										721.
(b) Distribution of property by a subchapter
			 K entity- The amount of gain or loss recognized on the distribution of property
			 by a subchapter K entity shall be determined in accordance with  26 U.S.C. §
										731.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-10 - DISTRIBUTION OF STOCK PURSUANT TO ORDER ENFORCING THE FEDERAL ANTI-TRUST LAWS › Section 810-3-10-.01 - Distribution Of Stock Pursuant To Order Enforcing The Federal Anti-Trust Laws

Current through Register Vol. 42, No. 9, June 28, 2024
(Repealed 6/2/99).
Authors:
Verlon R. Frost, Jeff Taylor
Statutory Authority
:
Code of Ala.
				1975
, §
								40-18-10.
History
: Filed July 27, 1988.
Amended:
Filed March 4, 1997; effective April 8, 1997.
Repealed:
Filed April 28, 1999; effective June 2,
				1999.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-11 - INVENTORY › Section 810-3-11-.01 - Inventory Procedures

Current through Register Vol. 42, No. 9, June 28, 2024
When the production, purchase, or sale of merchandise is an
				income producing factor, inventories at the beginning and ending of each
				taxable year are necessary in order to correctly compute income. In these
				cases, inventories shall be taken, computed and used in accordance with the
				methods prescribed or permitted by the Internal Revenue Service pursuant to  26 U.S.C. §§
									263A, 471, 472 and 474  and regulations thereunder.
Authors:
Ewell Berry, Ann F. Winborne, CPA, Ed
				Cutter, CPA
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-11.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-13 - NET INCOME OF INDIVIDUALS - COMPUTATIONS › Section 810-3-13-.01 - Taxable Year

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Taxable
			 income shall be computed and a return shall be made for a period known as the
			 "taxable year." The taxable year may be a calendar year, a fiscal year, an
			 elected 52-53 week year, or an accounting period of less than twelve months
			 resulting from a change in accounting periods. The taxable year for Alabama
			 purposes must tie to the same tax period the taxpayer utilizes for federal tax
			 purposes.
(2) A taxpayer elects a
			 taxable year when the first federal return is filed. This election must be
			 consistently followed in filing subsequent returns, and all Alabama returns.
(a) A calendar year is the twelve consecutive
			 month period beginning January 1 and ending December 31.
(b) A fiscal year is the twelve consecutive
			 month period ending on the last day of any month other than December.
(c) There is no provision in Alabama income
			 tax law for the 52-53 week year; however, the Department does permit the
			 election of the 52-53 week year. When this election is made, the Department
			 will follow the methods prescribed by the Internal Revenue Service pursuant to
			 26 U.S.C. §
										441(f).
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-13 - NET INCOME OF INDIVIDUALS - COMPUTATIONS › Section 810-3-13-.02 - Maintenance Of Accounting Records

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Each taxpayer must maintain such
			 accounting records as will clearly reflect his income for each accounting
			 period, and must file his returns based on these records.
(2) If the taxpayer does not maintain such
			 accounting records, or if such records do not clearly reflect the income or
			 deductions of the taxpayer for any given taxable year, the Department may
			 prescribe the method and basis for computation of such income. A taxpayer who
			 does not keep adequate accounting records will be required to report his income
			 on the calendar year basis and use the cash receipts and disbursements method
			 of accounting.
(3) For record
			 keeping requirements, see §
								40-2A-7(a)(1),
Code of Ala. 1975
.
Authors:
Rebecca S. Whisenant, Cynthia D. Norwood,
				Carmen Mills, Anne Glenn
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-18-13,
				  40-1-5.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-13 - NET INCOME OF INDIVIDUALS - COMPUTATIONS › Section 810-3-13-.03 - Method Of Accounting

Current through Register Vol. 42, No. 9, June 28, 2024
(1) For
			 tax years beginning after December 31, 1998, a taxpayer making an election to
			 file an Alabama consolidated return, as provided in §
								40-18-39,
Code of Ala. 1975
, must use the same method of
			 accounting as employed for federal income tax purposes.
(2) For tax years beginning after December
			 31, 1989, a taxpayer must use the same accounting method for Alabama purposes
			 as that used for federal income tax purposes.
Authors:
Cindy D. Norwood, Jeffrey Taylor, Carmen
				Mills, Anne Glenn
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7,
				  40-18-13.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-13 - NET INCOME OF INDIVIDUALS - COMPUTATIONS › Section 810-3-13-.04 - Change In Method Of Accounting

Current through Register Vol. 42, No. 9, June 28, 2024
(1) For tax years beginning before January 1,
			 1990, a taxpayer desiring to change his method of accounting should request
			 permission from the Department of Revenue to make the change. Applications for
			 such change should set forth clearly the nature of the business, the method of
			 accounting used in keeping the books, and the reasons for changing the method
			 of reporting.
(2) For tax years
			 beginning after December 31, 1989, the accounting method used for Alabama
			 purposes will automatically change whenever a different method is permitted or
			 required for federal income tax purposes.
(3) Alabama law has no counterpart to  26 U.S.C.§
									481; therefore, any increase or decrease in income resulting from a
			 change in accounting method must be taken into account in full in the year of
			 change. There is no provision in Alabama law to defer the effect of a change in
			 accounting method over a number of years. In changing from a cash method of
			 accounting to an accrual method, income accrued but not yet collected as of the
			 close of the year of change shall be added to income actually received in cash
			 during the year, and expenses accrued but not yet paid as of the close of the
			 year shall be added to expenses actually paid during the year. In making a
			 change from accrual to cash method of accounting, items previously reported as
			 income and expenses should be excluded from the cash basis return.
Authors:
Cindy D. Norwood, Jeffrey Taylor, Carmen
				Mills, Anne Glenn
Statutory Authority:
Code of Ala.
				  1975
, §
										40-18-13.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-14 - GROSS INCOME OF INDIVIDUALS › Section 810-3-14-.03 - Gross Income Of Farmers

Current through Register Vol. 42, No. 9, June 28, 2024
(1) A taxpayer is engaged in the business of
			 farming if he cultivates, operates, or manages a farm for gain or profit,
			 either as owner or tenant. A taxpayer who receives a rental (either in cash or
			 in kind) which is based upon farm production is engaged in the business of
			 farming. However, a taxpayer who receives a fixed rental (without reference to
			 production) is engaged in the business of farming only if he participates to a
			 material extent in the operation or management of the farm. A taxpayer engaged
			 in forestry or the growing of timber is not thereby engaged in the business of
			 farming. A person cultivating or operating a farm for recreation or pleasure
			 rather than a profit is not engaged in the business of farming. For the purpose
			 of this rule, the term "farm" is used in its ordinary, accepted sense and
			 includes stock, dairy, poultry, fish, fruit, and truck farms, and also
			 plantations, ranches, ranges, and orchards.
(2) A farmer shall make a return using the
			 same taxable year and in accordance with the same method of accounting that the
			 farmer uses for federal income tax purposes, as provided for under §
								40-18-13,
Code of Ala. 1975
.
(3) Crop shares shall be included in gross
			 income as of the year in which the crop shares are reduced to money or the
			 equivalent of money.
(4) If farm
			 produce is exchanged for merchandise, groceries, or the like, the market value
			 of the articles received in exchange is to be included in gross
			 income.
(5) Proceeds of insurance,
			 such as hail and fire insurance on growing crops, should be included in gross
			 income, whether received in cash or its equivalent for the crop injured or
			 destroyed.
(6) Inventory shall be
			 taken by a farmer in accordance with the methods and procedures prescribed
			 under §
								40-18-11.
Authors:
Ann F. Winborne, CPA, John Danziger,
				Rebecca Whisenant
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-18-14.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-14 - GROSS INCOME OF INDIVIDUALS › Section 810-3-14-.04 - Collections Of Items Previously Deducted

Current through Register Vol. 42, No. 9, June 28, 2024
(1) If an amount which was properly allowed
			 as a deduction in a prior year is subsequently recovered or refunded, the
			 amount recovered or refunded must be included in income for the year of
			 recovery to the extent that a tax benefit resulted from the
			 deduction.
(2) A tax benefit
			 includes a net operating loss available for carryback or
			 carryforward.
(3) The phrase
			 "recovery of an amount properly allowed as a deduction" does not include the
			 "recovery" of depreciation on the sale or other disposition of an asset for
			 more than its depreciated basis. Such "recovery" is included in the amount of
			 gain to be recognized pursuant to §
								40-18-8,
Code of Ala. 1975
, and regulations thereunder.
Authors:
Ann F. Winborne, CPA, John Danziger,
				Rebecca S. Whisenant
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7 -(a)(5),
				  40-18-14.
Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-3-14 - GROSS INCOME OF INDIVIDUALS › Section 810-3-14-.05 - Gross Income Of Nonresidents

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
(a) The
			 gross income of a nonresident includes compensation for personal services only
			 to the extent that the services were rendered in this State.
(b) Compensation for personal services
			 rendered by a nonresident outside this State and not connected with the
			 management or conduct of a business in this State is excluded from gross income
			 even if payment is made from a point within this State or the employer is a
			 resident individual, partnership or corporation.
1. Compensation for personal services
			 rendered by a nonresident within this State is to be included in gross income
			 although payment is received at a point outside this State or from a
			 nonresident individual, partnership or corporation.
2. Where compensation is received for
			 personal services rendered partly within and partly without this State, that
			 part of the income attributable to this State is included in gross income. In
			 such cases the test of physical presence is used to determine the situs of the
			 rendition of the services, except where the peculiar nature of such services
			 causes the objective of the employment to be accomplished or to take effect
			 within this State, as, for example, where a nonresident acts as a fiduciary of
			 an Alabama estate or trust. The gross income from commissions earned by a
			 nonresident traveling salesman, agent, or other employee for services performed
			 or sales made, whose compensation is in the form of a specified commission on
			 each sale made, or service rendered, includes the specific commissions earned
			 on sales made, or services rendered, in this State; and allowable deductions
			 must be computed on the same basis. The gross income of all other nonresident
			 employees, including corporate officers, includes that portion of the total
			 compensation for services which the total number of working days employed
			 within this State bears to the total number of working days employed both
			 within and without this State during the taxable period. In the case of
			 corporate officers and executives who spend only a portion of their time within
			 this State, but whose compensation paid by a corporation operating in Alabama
			 is exclusively for managerial services rendered by such officers and executives
			 while within this State, the entire amount of compensation so earned is taxable
			 without apportionment.