Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart E - ADDITIONS TO AND SUBTRACTIONS FROM TAXABLE INCOME OF INDIVIDUALS, CORPORATIONS, TRUSTS AND ESTATES AND PARTNERSHIPS › Section 100.2410 - Net Operating Loss Carryovers for Individuals, and Capital Loss and Other Carryovers for All Taxpayers (IITA 203)

Current through Register Vol. 48, No. 28, July 12, 2024
a) Scope. IITA Section 203 requires all
				taxpayers other than individuals to add back to their base income any carryover
				deduction taken in computing federal taxable income for a net operating loss
				incurred in a tax year ending prior to December 31, 1986. IITA Section 203(e)
				provides for adjustments to taxable income of taxpayers, other than
				individuals, related to deductions of net operating losses incurred in tax
				years ending prior to December 31, 1986. IITA Section 203(h) provides that,
				except as expressly provided by that subsection, there shall be no
				modifications or limitations on the amounts of income, gain, loss or deduction
				taken into account in determining gross income, adjusted gross income or
				taxable income for federal income tax purposes for the taxable year, or in the
				amount of such items entering into the computation of base income and net
				income. Accordingly, no taxpayer shall make any adjustment to, or otherwise
				increase or decrease, the amount properly allowed in computing adjusted gross
				income (for individuals) or taxable income (for all other taxpayers) on the
				taxpayer's federal income tax return for:
1)
				in the case of an individual, any net operating loss deduction carried over
				under IRC section 172; provided that (notwithstanding the amount of the federal
				net operating deduction claimed by the individual or allowed by the Internal
				Revenue Service), in order to prevent the double deduction of the same
				carryover as required by IITA Section 203(g) and Madison Park Bank v. Zagel, 97
				Ill.App.3d 743 (1981), aff'd 91 Ill.2d 231 (1982), the deduction properly
				allowed in computing federal adjusted gross income in a taxable year may not
				exceed the amount that reduces the taxpayer's taxable income for that year to
				zero, after making the modifications specified in IRC section 172(b)(2)(A), and
				therefore shall not include any amount available to carry over to other taxable
				years under IRC section 172(b)(2);
2) capital losses carried over under IRC
				section 1212;
3) deductions allowed
				to a partner under IRC section 704(d) for his distributive share of a
				partnership loss that exceeded the adjusted basis in his partnership interest
				as of the end of the tax year in which the loss was incurred;
4) deductions allowed to a shareholder under
				IRC section 1366(d)(2) for his share of a loss or deduction of a Subchapter S
				corporation that exceeded his adjusted basis in the stock or indebtedness of
				the Subchapter S corporation in the year the loss or deduction was
				incurred;
5) passive activity
				losses allocated to tax years subsequent to the year in which the loss was
				incurred under IRC section 469(b);
6) deductions for losses in excess of amounts
				at risk allocated to years subsequent to the year incurred under IRC section
				465(a)(2); and
7) losses recognized
				as the result of adjustment events subsequent to a transaction governed by IRC
				section 338 and carried back pursuant to Treas. Reg. § 1.338(b)
				-3T(h)(2)(ii)(B).