reglab/statecodes huggingface dataset:
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 38 - Administration › Rule 701-38.18 - Tax Treatment of Income Repaid in Current Tax Year Which Had Been Reported on Prior Iowa Individual Income Tax Return

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1992, if a
				  taxpayer repays in the current tax year an amount of income that had been
				  reported on the taxpayer's Iowa individual income tax return for a prior year
				  that had been filed with the department and the taxpayer would have been
				  eligible for a tax benefit under similar circumstances under Section 1341 of
				  the Internal Revenue Code, the taxpayer will be eligible for a tax benefit on
				  the Iowa return for the current tax year. The tax benefit will be either the
				  reduced tax on the Iowa return for the current tax year due to the deduction of
				  the repaid income or the reduction in tax on the Iowa return or returns for the
				  prior year(s) due to the exclusion of the repaid income. The reduction in tax
				  from the return for the prior year may be claimed as a refundable credit on the
				  return for the current tax year
Example A: A taxpayer reported $7,000 in unemployment
				  benefits on the taxpayer's 1994 Iowa return that the taxpayer had received in
				  1994. In early 1995 the taxpayer was notified that $4,000 of the unemployment
				  benefits had to be repaid. The benefits were repaid by the end of 1995. The
				  taxpayer claimed a deduction on the 1995 Iowa return for the amount of
				  unemployment benefits repaid during 1995 which had been reported on the
				  taxpayer's 1994 Iowa return as that action gave the taxpayer a greater
				  reduction in Iowa income tax liability than the taxpayer would have received
				  from a reduction in tax on the 1994 return by recomputing the liability by
				  excluding the repaid income.
Example B: A taxpayer had received a $5,000 bonus in 1994
				  which was reported on the taxpayer's 1994 Iowa return. In 1995 the taxpayer's
				  employer advised the employee that the bonus was awarded in error and to be
				  repaid. The $5,000 bonus was repaid to the employer by the end of 1995. The
				  taxpayer claimed a credit of $440 on the 1995 Iowa return for repayment of the
				  bonus in 1995. This represented the reduction in tax for 1994 from recomputing
				  the tax liability for that year without the $5,000 bonus. This provided the
				  taxpayer a greater tax benefit than the taxpayer would have received from
				  claiming a deduction on the 1995 Iowa return from repayment of the
				  bonus.
This rule is intended to implement Iowa Code section
				  4225.
				  as amended by 1996 Iowa Acts, Senate File 2168.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 38 - Administration › Rule 701-38.19 - Indication of Dependent Child Health Care Coverage on Tax Return

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 2008, but
				  before January 1, 2010, an individual who is an Iowa resident as of December 31
				  of the tax year who files an Iowa individual income tax return may report on
				  the return the presence or absence of health care coverage for each dependent
				  child as of December 31 of the tax year for which the exemption credit
				  described in 701-subrule 42.2(1), paragraph
"c,"
is claimed.
				  For tax years beginning on or after January 1, 2008, but before January 1,
				  2010, it is not mandatory that a taxpayer indicate on the tax return the
				  presence or absence of health care coverage for each dependent, and there is no
				  penalty if this information is not provided on the tax return. For tax years
				  beginning on or after January 1, 2010, it is mandatory that a taxpayer indicate
				  on the tax return the presence or absence of health care coverage for each
				  dependent. The Iowa return will not be considered complete until the indication
				  of the presence or absence of health care coverage for each dependent is made
				  on the return.
(1)
Definition
				of health care coverage.
Health care coverage includes the following:
a. Private health care coverage provided
				through an employer, a relative's employer, or through a union.
b. Private health care coverage purchased by
				an individual from a private company.
c. Government health care coverage provided
				through the state Medicaid program set forth in Iowa Code chapter 249A, or the
				HAWK-1 (healthy and well kids in Iowa) program set forth in Iowa Code chapter
				5141.
d. Government health care
				coverage provided by the military including the Civilian Health and Medical
				Program of the Uniformed Services (TRICARE/CHAMPUS) and the Civilian Health and
				Medical Program of the Department of Veterans Affairs (CHAMPVA).
e. Government health care coverage provided
				by the United States Department of Health and Human Services to eligible
				American Indians under the Indian Health Service program.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 39 - Filing Return and Payment of Tax › Rule 701-39.4 - Filing Status

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Single taxpayers.
The term "single person" includes, for
				income tax purposes, an unmarried person, a person legally separated under a
				decree of divorce or separate maintenance or any other person not properly
				classified under subrules 39.4(2) through 39.4(8).
(2)
Married taxpayers.
A
				taxpayer is considered married for the entire year if on the last day of the
				tax year the taxpayer is
(a)
married and living together with
				the taxpayer's spouse,
(b)
married and living apart from the
				spouse, but not legally separated under a decree of divorce or separate
				maintenance,
(c)
living together with the spouse in a common
				law marriage that is recognized by the state where the common law marriage
				exists or
(d)
widowed but the spouse died during the
				year.
(3)
common law
				marriage. A
common law marriage is a social relationship between a man
				and a woman that meets all the necessary requisites of a marriage except that
				it was not solemnized, performed or witnessed by an official authorized by law
				to perform marriages. The necessary elements of a common law marriage are:
(a) a present intent of both parties freely
				given to become married,
(b) a
				public declaration by the parties or a holding out to the public that they are
				husband and wife,
(c) continuous
				cohabitation together as husband and wife (this means consummation of the
				marriage), and
(d) both parties must
				be capable of entering into the marriage relationship. No special time limit,
				is necessary to establish a common law marriage. Iowa recognizes, for income
				tax purposes, all valid common law marriages.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 39 - Filing Return and Payment of Tax › Rule 701-39.5 - Payment of Tax

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Payment of tax for wage earners.
Withholding of tax on wage
				earners is required under Iowa Code section
				42216..
				See 701-Chapter 46.
(2)
Payment of tax on income not subject to withholding.
Those
				taxpayers with income not subject to withholding which will produce a tax
				liability of $200 or more shall file and pay a declaration of estimated tax.
				See 701-Chapter 49.
(3)
Full estimated payment on original due date.
When an extension
				is requested as provided by Iowa Code section
				42221.,
				the total amount of estimated tax must be paid on or before the due date for
				filing the return.
(4)
Balance of tax due.
If the computation on the tax return shows
				additional tax due, it shall be paid in full with the filing of the
				return.
(5)
Payment of tax
				by uncertified checks.
The department will accept uncertified checks
				in payment of income taxes, provided the checks are collectible for their full
				amount without any deduction for exchange or other charges. The date on which
				the department receives the check will be considered the date of payment, so
				far as the taxpayer is concerned, unless the check is returned dishonored. If
				one check is remitted to cover two or more individuals' taxes, the remittance
				must be accompanied by a letter of transmittal stating:
(a) the name of the drawer of the
				check;
(b) the amount of the
				check;
(c) the amount of any cash,
				money order or other instrument included in the same remittance;
(d) the name of each individual whose tax is
				to be paid by the remittance; and
(e) the amount of payment on account of each
				individual.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 39 - Filing Return and Payment of Tax › Rule 701-39.6 - Minimum Tax

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Minimum
				tax for tax years beginning on or after 1982, but before 1985.
Rescinded lAB 11/24/04, effective 12/29/04.
(2)
Minimum tax for tax years
				beginning on or after January 1, 1985, but before January 1, 1987.
Rescinded lAB 11/24/04, effective 12/29/04.
(3)
Minimum tax for tax years
				beginning on or after January 1, 1987.
a.
Method for computation of the
				minimum tax.
For tax years beginning on or after January 1, 1987, the
				minimum tax is imposed only to the extent that the minimum tax exceeds the
				taxpayer's regular income tax liability. The minimum tax rate is 75 percent of
				the maximum regular tax rate for individual income tax. For tax years beginning
				on or after January 1,1987, through December 31,1997, the tax rate is 7.5
				percent of the taxpayer's minimum taxable income. For tax years beginning on or
				after January 1, 1998, the tax rate is 6.7 percent of the taxpayer's minimum
				taxable income. Minimum taxable income is computed as follows:
Iowa Taxable income
Plus:
* Applicable Adjustments and **Tax
				  Preference Items (from Form lA 6251)
Subtotal
Less:
***Applicable Exemption
				  amount
Minimum Taxable income
(1) *The federal adjustments that are also
				applicable in computing state minimum taxable income are:
1. Depreciation of property placed in service
				after 1986.
2. Circulation and
				research and experimental expenditures paid or incurred after 1986.
3. Mining, exploration, and development costs
				paid or incurred after 1986.
4.
				Long-term contracts entered into after 2-28-86.
5. Pollution control facilities placed in
				service after 1986.
6. Installment
				sales of certain property.
7. Basis
				adjustment.
8. Certain loss
				limitations.
9. Tax shelter farm
				loss.
10. Passive activity
				loss.
11. Adjustments related to
				beneficiaries of estates and trusts.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 39 - Filing Return and Payment of Tax › Rule 701-39.8 - State Income Tax Limited to Taxpayer's Net Worth Immediately Before the Distressed Sale

Current through Register Vol. 47, No. 3, July 24, 2024
Taxpayers whose net incomes include gains or losses from
				  distressed sales may limit, their state income tax liabilities for the tax
				  years in which the distress sales occurred to their net worths immediately
				  before the distressed sales. The state income tax liability of a taxpayer is
				  the aggregate of the taxpayer's income tax plus the taxpayer's minimum tax plus
				  the taxpayer's lump-sum tax. For purposes of this provision, a distressed sale
				  is the forfeiture of an installment real estate contract, the transfer of real
				  or personal property securing a debt to a creditor in cancellation of that
				  debt, or from the sale or exchange of property as a result of actual notice of
				  foreclosure. Proof of forfeiture of the installment real estate contract, proof
				  of transfer of property to a creditor in cancellation of a debt, or a copy of
				  the notice of foreclosure will constitute documentation of the distressed sale
				  and must be made a part of the return. A copy of the balance sheet showing the
				  taxpayer's net worth immediately before the distressed sale must also be
				  provided with the return.
The balance sheet supporting the taxpayer's net worth must
				  include the taxpayer's personal assets and liabilities as well as the assets of
				  the taxpayer's farm or other business. In the case of married taxpayers, except
				  in the case of a husband and wife who lived apart at all times during the tax
				  year, the assets and liabilities of both spouses must be considered in
				  determining the taxpayers' net worth immediately before the distressed
				  sale.
This rule is intended to implement Iowa Code section
				  4225..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 39 - Filing Return and Payment of Tax › Rule 701-39.10 - Election to Report Excess Income From Sale or Exchange of Livestock Due to Drought in the Next Tax Year

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1990, a
				  taxpayer may elect to report excess income from the sale or exchange of
				  livestock due to drought on the Iowa return for the next tax year if the
				  taxpayer qualified for similar treatment of the excess income under Section
				  451(e) of the Internal Revenue Code. This election is available only to a
				  taxpayer on the cash receipts and disbursements method of accounting whose
				  principal trade or business is farming as described in Section 6420(c)(3) of
				  the Internal Revenue Code. For purposes of this rule the election applies to
				  all livestock held for sale or exchange, whether raised or purchased for
				  resale. This election also applies to livestock used for draft, breeding,
				  dairy, or sporting purposes which were held less than two years in the case of
				  cattle and horses and less than one year in the case of other livestock. For
				  purposes of this election, livestock does not include poultry.
The area in which the livestock was sold or exchanged must
				  have been declared a disaster area due to drought. However, the sale or
				  exchange can take place before or after the area is declared a disaster area as
				  long as the same disaster (the drought) caused the livestock sale. In order for
				  the election to report excess income in the following tax year to be valid, the
				  election must be made by the due date of the return, including extensions.
				  Additional information about computing the excess income as well as information
				  needed on the statement for making the election is described in Treasury
				  Regulation & sect;1.451-7.
This rule is intended to implement Iowa Code section
				  4225..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 39 - Filing Return and Payment of Tax › Rule 701-39.11 - Forgiveness of Tax for an Individual Whose Federal Income Tax Was Forgiven Because the Individual Was Killed Outside the United States Due to Military or Terroristic Action

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years ending on or after August 2, 1990, an
				  individual's Iowa income tax is forgiven if the person's federal income tax was
				  forgiven because the individual was killed in a combat zone, the individual was
				  missing in action and presumed dead, or the individual was killed outside the
				  United States due to terrorist or military action while the person was a
				  military or civilian employee of the United States. The Iowa income tax is
				  forgiven on the return for the tax year in which the individual was killed or
				  was missing and was presumed dead, and is forgiven on the return for the tax
				  year prior to the year of death. In a situation where the person that was
				  killed was married at the time of death, no tax will be due on the return filed
				  for the year of death if a joint state return or a married filing separately on
				  the combined state return is filed for that tax year. In the case of the return
				  for the tax year prior to the year of death for the person killed in military
				  or terrorist action, all the tax will be forgiven on the return if the person
				  was married at the time of death and a joint state return or a married filing
				  separate state return was filed for this prior year However, if the person that
				  was killed had filed a return using the married filing separately on the
				  combined return form status, only the state income tax attributable to the
				  person that was killed will be forgiven. The department will not honor an
				  amended return for the prior year to change the filing status from separately
				  on the combined return form to joint return so all the state income tax for
				  both spouses will be forgiven.
When a state income tax return or claim for refund is filed
				  for forgiveness of tax for an individual who was killed in military or
				  terrorist action, a notation should be entered at the top of the return
				  "Forgiveness of Tax-Killed in Military Action" or "Forgiveness of Tax-Killed in
				  Terrorist Action" depending on how the individual was killed. In addition, a
				  copy of the death certificate, or other evidence of the person's death or
				  evidence establishing that the individual is missing in action and presumed
				  dead, should be attached to the claim for refund or the tax return. A refund
				  claim for forgiveness of tax will be honored only if the claim is made within
				  the statute of limitations for refund provided in Iowa Code subsection
				  42273(2)..
This rule is intended to implement Iowa Code sections
				  4225.
				  and
				  42273..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 39 - Filing Return and Payment of Tax › Rule 701-39.12 - Tax Benefits for Persons in the Armed Forces Deployed Outside the United States and for Certain Other Persons Serving in Support of Those Forces

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Extension of deadlines.
a.
Extension of certain deadlines for certain military personnel.
(1) For tax years ending after August 2,
				1990, the time period to file state income tax returns and to perform certain
				other acts related to the department ("certain other acts related to the
				department" is defined in paragraph 39.12(1)
"e"
below) is
				extended for persons in the armed forces :
1.
				Who serve in an area designated by the President or the Congress as a combat
				zone.
2. Who serve in an area
				designated by the President or the Congress as a qualified hazardous duty
				area.
3. Who were deployed outside
				the United States in an operation designated by the Secretary of Defense as a
				contingency operation as defined in 10 U.S.C. § 101(a)(13), or which
				became a contingency operation by the operation of law. Persons who were
				deployed in a contingency operation who ceased to participate in such operation
				on or after May 21, 2003, are considered to be eligible individuals for
				purposes of being granted additional time to perform certain acts with the
				department to the extent the period for performing an act did not expire prior
				to May 21, 2003, or a later date if the person ceased to participate in the
				contingency operation on a date after May 21, 2003.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 39 - Filing Return and Payment of Tax › Rule 701-39.14 - Tax Benefits for Persons Serving in Support of the Bosnia-herzegovina Hazardous Duty Area

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1995, a number
				  of state tax benefits are authorized for individuals serving in a location
				  designated by the President and Congress as a qualified hazardous duty area or
				  other persons serving in support of the individuals in the hazardous duty area.
				  Public Law No. 104-117 was enacted by Congress on March 20, 1996, and
				  designated Bosnia, Herzegovina, Croatia, and Macedonia as a qualified hazardous
				  duty area so that troops performing peacekeeping duties in the area would be
				  eligible for tax benefits for federal income tax purposes on the same basis
				  they would have been eligible for the same benefits if they had served in a
				  combat zone under prior law.
For Iowa tax purposes, persons serving peacekeeping duties in
				  the hazardous duty area or other persons serving overseas in support of the
				  persons in the hazardous duty area will be eligible for the same tax benefits
				  that were previously only available to persons serving military duties in a
				  combat zone. The tax benefits that are available for persons serving in the
				  hazardous duty area or persons serving overseas in support of the persons in
				  the hazardous duty area are described in rule 39.12(422).
This rule is intended to implement Iowa Code section
				  4223.
				  as amended by 1996 Iowa Acts, Senate File 2168.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.1 - Net Income Defined

Current through Register Vol. 47, No. 3, July 24, 2024
Net income for state individual income tax purposes shall
				  mean federal adjusted gross income as properly computed under the Internal
				  Revenue Code and shall include the adjustments in
				  701-402.
				  (422) to
				  701-409.
				  (422). The remaining provisions of this rule and
				  701-4012.
				  (422) to
				  701-4079.
				  (422) shall also be applicable in determining net income. This rule is intended
				  to implement Iowa Code section
				  4227..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.5 - Military Pay

Current through Register Vol. 47, No. 3, July 24, 2024
(1) Rescinded lAB
				6/3/98, effective 7/8/98.
(2) For
				income received for services performed prior to January 1, 1969, and for
				services performed for tax periods beginning on or after January 1, 1977, but
				before January 1, 2011. An Iowa resident who is on active duty in the armed
				forces of the United States, as defined in Title 10, United States Code,
				Section 101, shall include all income received for such service performed prior
				to January 1,1969, and for services performed during tax periods beginning on
				or after January 1, 1977, but before January 1, 2011. For tax years beginning
				on or after January 1, 2011, see rule
				701-4076.
				(422). However, the taxability of this active duty military income shall be
				terminated for any income received for services performed effective the day
				after either of the two following conditions:
a. When universal compulsory military service
				is reinstated by the United States Congress. "compulsory military service" is
				defined to be the actual act of drafting individuals into the military service
				and not just the registration of individuals under the Military Selective
				Service Act (50 App. U.S.C. 453); or
b. When a state of war is declared to exist
				by the United States Congress.
Federal active duty does not include a member of the national
				  guard when called for training by order of the governor through order of the
				  adjutant general. These members are in the service of the state and not on
				  active duty of the United States. Federal active duty also does not include
				  members of the various military reserve programs. A taxpayer must be on active
				  federal duty to qualify for exemption. National guard and reservists who
				  undergo voluntary training are not on active duty in a federal status. National
				  guard and reservist pay does not qualify for the military exemption and such
				  pay is taxable by the state of Iowa.
compensation received from the United States Government by
				  nonresident members of the armed forces who are temporarily present in the
				  state of Iowa pursuant to military orders is exempt from Iowa income
				  tax.
This rule is intended to implement Iowa Code section
				  422.5.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.6 - Interest and Dividend Income

Current through Register Vol. 47, No. 3, July 24, 2024
This rule applies to interest and dividends from foreign
				  securities and securities of state and other political subdivisions. Interest
				  and dividends from foreign securities and from securities of state and other
				  political subdivisions are to be included in Iowa taxable income. Certain types
				  of interest and dividends, because of specific exemption, are not included in
				  income for federal tax purposes. To the extent such income has been excluded
				  for federal income tax purposes, unless the term of income is specifically
				  exempted from state taxation by the laws or constitutions of Iowa or of the
				  United States, it must be added to Iowa taxable income.
This rule is intended to implement Iowa Code section
				  4227..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.7 - Current Year Capital Gains and Losses

Current through Register Vol. 47, No. 3, July 24, 2024
In determining short-term or long-term capital gain or loss
				  the provisions of the Internal Revenue Code are to be followed.
This rule is intended to implement Iowa Code section
				  4227..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.8 - Gains and Losses on Property Acquired Before January 1, 1934

Current through Register Vol. 47, No. 3, July 24, 2024
When property was acquired prior to January 1, 1934, the
				  basis as of January 1, 1934, for determining capital or other gains or losses
				  is the higher of cost, adjusted for depreciation allowed or allowable to
				  January 1, 1934, or fair market value as of that date.
If, as a result of this provision, a basis is to be used for
				  purposes of Iowa individual income tax which is different from the basis used
				  for purposes of federal income tax, appropriate adjustment must be made and
				  detailed schedules supplied in the computation of Iowa taxable income.
This rule is intended to implement Iowa Code section
				  4227..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.9 - Work Opportunity Tax Credit and Alcohol Fuel Credit

Current through Register Vol. 47, No. 3, July 24, 2024
Where an individual claims the work opportunity tax credit
				  under Section 51 of the Internal Revenue Code or the alcohol and cellulosic
				  biofuel fuels credit under Section 40 of the Internal Revenue Code, the amount
				  of credit allowable must be used to increase federal taxable income. The amount
				  of credit allowable used to increase federal adjusted gross income is
				  deductible in determining Iowa net income. The work opportunity tax credit
				  applies to eligible individuals who begin work before January 1, 2012. The
				  adjustment for the alcohol and cellulosic biofuel fuels credit is applicable
				  for tax years beginning on or after January 1, 1980.
This rule is intended to implement 2011 Iowa Code Supplement
				  section
				  4227.
				  as amended by 2012 Iowa Acts, Senate File 2328.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.12 - Income From Partnerships or Limited Liability Companies

Current through Register Vol. 47, No. 3, July 24, 2024
Residents engaged in a partnership or limited liability
				  company, even if located or doing business outside the state of Iowa, are
				  taxable upon their distributive share of net income of such partnership or
				  limited liability company, whether distributed or not, and are required to
				  include such distributive share in their return. A nonresident individual who
				  is a member of a partnership or limited liability company doing business in
				  Iowa is taxable on that portion of net income which is applicable to the Iowa
				  business activity whether distributed or not. See 701-Chapter 45.
This rule is intended to implement Iowa Code sections
				  4227.,
				  4228.,
				  and
				  42215..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.13 - Subchapter "s" Income

Current through Register Vol. 47, No. 3, July 24, 2024
Where a corporation elects, under Sections 1371-1379 of the
				  Internal Revenue Code, to distribute the corporation's income to the
				  shareholders, the corporation's income, in its entirety, is subject to
				  individual reporting whether or not actually distributed. Both resident and
				  nonresident shareholders shall report their share of the corporation's net
				  taxable income on their respective Iowa returns.
Isaacson v. Iowa State
				  Tax commission,
183 N. W.2d 693, Iowa Supreme Court, February 9, 1971.
				  Residents shall report their distributable share in total while nonresidents
				  shall report only their portion of their distributable share which was earned
				  in Iowa. For tax years beginning on or after January 1, 1996, residents should
				  refer to 701-Chapter 50 to determine if they qualify to compute Iowa taxable
				  income by allocation and apportionment. See 701-Chapter 54 for allocation and
				  apportionment of corporate income.
This rule is intended to implement Iowa Code sections
				  4227.,
				  4228.,
				  42215., and
				  42236..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.14 - Contract Sales

Current through Register Vol. 47, No. 3, July 24, 2024
Interest derived as income from a land contract is intangible
				  personal property and is assignable to the recipient's domicile. Gains received
				  from the sale or assignment of land contracts are considered to be gains from
				  real property in this state and are assignable to this state. As to
				  nonresidents, see 40.16(422).
This rule is intended to implement Iowa Code sections
				  4227.
				  and
				  4228..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.17 - Income of Part-year Residents

Current through Register Vol. 47, No. 3, July 24, 2024
A taxpayer who was a resident of Iowa for only a portion of
				  the taxable year is subject to the following rules of taxation:
1. For that portion of the taxable year for
				which the taxpayer was a nonresident, the taxpayer shall allocate to Iowa only
				the income derived from sources within Iowa.
2. For that portion of the taxable year for
				which the taxpayer was an Iowa resident, the taxpayer shall allocate to Iowa
				all income earned or received whether from sources within or without Iowa.
A taxpayer moving into Iowa may adjust the Iowa-source gross
				  income on Schedule lA 126 by the amount of the moving expense to the extent
				  allowed by Section 217 of the Internal Revenue Code. Any reimbursement of
				  moving expense shall be included in Iowa-source gross income. A taxpayer moving
				  from Iowa to another state or country may not adjust the Iowa-source gross
				  income by the amount of moving expense, nor should any reimbursement of moving
				  expense be allocated to Iowa.
This rule is intended to implement Iowa Code sections 422.5,
				  422.7, and 422.8.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.18 - Net Operating Loss Carrybacks and Carryovers

Current through Register Vol. 47, No. 3, July 24, 2024
Net operating losses shall be allowed or allowable for Iowa
				  individual income tax purposes and will be computed using a method similar to
				  the method used to compute losses allowed or allowable for federal income tax
				  purposes. In determining the applicable amount of Iowa loss carrybacks and
				  carryovers, the adjustments to net income set forth in Iowa Code section
				  4227.
				  and the deductions from net income set forth in Iowa Code section
				  4229.
				  must be considered.
(1)
Treatment of federal income taxes.
a. Refund of federal income taxes due to net
				operating loss carrybacks or carryovers shall be reflected in the following
				manner:
(1) Accrual basis taxpayers shall
				accrue refunds of federal income taxes to the year in which the net operating
				loss occurs.
(2) Cash basis
				taxpayers shall reflect refunds of federal income taxes in the return for the
				year in which the refunds are received.
(3) Refunds reported in the year in which the
				net operating loss occurs which contain both business and nonbusiness
				components shall be analyzed and separated accordingly. The amount of refund
				attributable to business income shall be that amount of federal taxes paid on
				business income which are being refunded.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.19 - Casualty Losses

Current through Register Vol. 47, No. 3, July 24, 2024
Casualty losses may be treated in the same manner as net
				  operating losses and may be carried back three years and forward seven years in
				  the event said casualty losses exceed income in the loss year.
This rule is intended to implement Iowa Code section
				  4227..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.20 - Adjustments to Prior Years

Current through Register Vol. 47, No. 3, July 24, 2024
When Iowa requests for refunds are filed, they shall be
				  allowed only if filed within three years after the tax payment upon which a
				  refund or credit became due, or one year after the tax payment was made,
				  whichever time is the later Even though a refund may be barred by the statute
				  of limitations, a loss shall be carried back and applied against income on a
				  previous year to determine the correct amount of loss carryforward.
This rule is intended to implement Iowa Code section
				  42273..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.24 - Lottery Prizes

Current through Register Vol. 47, No. 3, July 24, 2024
Prizes awarded under the Iowa Lottery Act are Iowa earned
				  income. Therefore, individuals who win lottery prizes are subject to Iowa
				  income tax in the aggregate amount of prizes received in the tax year, even if
				  the individuals were not residents of Iowa at the time they received the
				  prizes.
This rule is intended to implement Iowa Code section
				  99E.19.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.27 - Incomes From Distressed Sales of Qualifying Taxpayers

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1986,
				  taxpayers with gains from sales, exchanges, or transfers of property must
				  exclude those gains from net income, if the gains are considered to be
				  distressed sale transactions.
(1)
Qualifications that must he met for transactions to he considered
				distressed sales.
There are a number of qualifications that must be
				met before a transaction can be considered to be a distressed sale. The
				transaction must involve forfeiture of an installment real estate contract, the
				transfer of real or personal property securing a debt to a creditor in
				cancellation of that debt, or from the sale or exchange of property as a result
				of actual notice of foreclosure. The following three additional qualifications
				need to have been met.
a. The forfeiture,
				transfer, or sale or exchange was done for the purpose of establishing a
				positive cash flow.
b. Immediately
				before the forfeiture, transfer, or sale or exchange, the taxpayer's
				debt-to-asset ratio exceeded 90 percent as computed under generally accepted
				accounting principles.
c. The
				taxpayer's net worth at the end of the tax year was less than $75,000.
In determining the taxpayer's debt-to-asset ratio immediately
				  before the forfeiture, transfer, or sale or exchange and at the end of the tax
				  year, the taxpayer must include any asset transferred within 120 days prior to
				  the transaction or within 120 days prior to the end of the tax year without
				  adequate and full consideration in money or money's worth.
Proof of forfeiture of the installment real estate contract,
				  proof of transfer of property to a creditor in cancellation of a debt, or a
				  copy of the notice of foreclosure constitutes documentation of the distressed
				  sale and must be made a part of the return. Balance sheets showing the
				  taxpayer's debt-to-asset ratio immediately before the distressed sale
				  transaction and the taxpayer's net worth at the end of the tax year must also
				  be included with the income tax return. The balance sheets supporting the
				  debt-to-asset ratio and the net worth must list the taxpayer's personal assets
				  and liabilities as well as the assets and liabilities of the taxpayer's farm or
				  other business.
For purposes of this provision, in the case of married
				  taxpayers, except in the instance when the husband and wife live apart at all
				  times during the tax year, the assets and liabilities of both spouses must be
				  considered in determining the taxpayers' net worth or the taxpayers'
				  debt-to-asset ratio.
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.29 - Intangible Drilling Costs

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1986, but
				  before January 1, 1987, intangible drilling and development costs which pertain
				  to any well for the production of oil, gas, or geothermal energy, and which are
				  incurred after the commencement of the installation of the production casing
				  for the well, are not allowed as an expense in the tax year when the costs were
				  paid or incurred and must be added to net income. Instead of expensing the
				  intangible drilling and development costs which are incurred after the
				  commencement of the installation of the production casing for a well, the
				  expenses must be amortized over a 26-month period, beginning in the month in
				  which the costs are paid or incurred if the costs were incurred for a well
				  which is located in the United States, the District of Columbia, and those
				  continental shelf areas which are adjacent to United States territorial waters
				  and over which the United States has exclusive rights with respect to the
				  exploration and exploitation of natural resources as provided in Section 638 of
				  the Internal Revenue Code.
In the case of intangible drilling and development costs
				  which are incurred for oil or gas wells outside the United States, those costs
				  must be recovered over a ten-year straight-line amortization period beginning
				  in the year the costs are paid or incurred. However, in lieu of amortization of
				  the costs, the taxpayer may elect to add these costs to the basis of the
				  property for cost depletion purposes.
For tax years beginning on or after January 1, 1987, the
				  intangible drilling costs, which are an addition to income subject to
				  amortization, are the intangible drilling costs described in Section 57(a)(2)
				  of the Internal Revenue Code. These intangible drilling costs are an item of
				  tax preference for federal minimum tax purposes for tax years beginning after
				  December 31, 1986.
This rule is intended to implement Iowa Code section
				  4227..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.30 - Percentage Depletion

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1987, the
				  percentage depletion that is an addition to net income is the depletion
				  described in Section 57(a)(1) of the Internal Revenue Code only to the extent
				  the depletion applies to an oil, gas, or geothermal well. This depletion is an
				  item of tax preference for federal minimum tax purposes for tax years beginning
				  after December 31, 1986.
This rule is intended to implement Iowa Code section
				  4227..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.31 - Away-from-home Expenses of State Legislators

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1,1987, state
				  legislators whose personal residences in their legislative districts are more
				  than 50 miles from the state capitol may claim the same deductions for
				  away-from-home expenses as are allowed on their federal income tax returns
				  under Section 162(h)(1)(B) of the Internal Revenue Code. These individuals may
				  claim deductions for meals and lodging per "legislative day" in the amount of
				  per diem allowance for federal employees in effect for the tax year. The
				  portion of this per diem allowance which is equal to the daily expense
				  allowance authorized for state legislators in Iowa Code section
				  210.
				  may be claimed as an adjustment to income. The balance of the per diem
				  allowance for federal employees must be allocated between lodging expenses and
				  meal expenses and is deductible as a miscellaneous itemized deduction. However,
				  only 50 percent of the amount attributable to meal expenses may be deducted for
				  tax years beginning on or after January 1, 1994.
State legislators whose personal residences in their
				  legislative districts are 50 miles or less from the state capitol may claim a
				  deduction for meals and lodging of $50 per "legislative day." However, in lieu
				  of either of the deduction methods previously described in this rule, any state
				  legislator may elect to itemize adjustments to income for amounts incurred for
				  meals and lodging for the "legislative days" of the state legislator
This rule is intended to implement Iowa Code section
				  4227..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.32 - Interest and Dividends From Regulated Investment Companies Which Are Exempt From Federal Income Tax

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1987, interest
				  and dividends from regulated investment companies which are exempt from federal
				  income tax under the Internal Revenue Code are subject to Iowa income tax. See
				  rule
				  701-4052. (422) for
				  a discussion of the Iowa income tax exemption of some interest and dividends
				  from regulated investment companies that invest in certain obligations of the
				  state of Iowa and its political subdivisions the interest from which is exempt
				  from Iowa income tax. To the extent that a loss on the sale or exchange of
				  stock in a regulated investment company was disallowed on an individual's
				  federal income tax return pursuant to Section 852(b)(4)(B) of the Internal
				  Revenue Code because the taxpayer held the stock six months or less and because
				  the regulated investment company had invested in federal tax-exempt securities,
				  the loss is allowed for purposes of computation of net income.
This rule is intended to implement Iowa Code section
				  4227..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.34 - Exemption of Restitution Payments for Persons of Japanese Ancestry

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1988,
				  restitution payments authorized by P.L. 100-383 to individuals of Japanese
				  ancestry who were interned during World War 11 are exempt from Iowa income tax
				  to the extent the payments are included in federal adjusted gross income. P.L.
				  100-383 provides for a payment of $20,000 for each qualifying individual who
				  was alive on August 10, 1988. In cases where the qualifying individuals have
				  died prior to the time that the restitution payments were received, the
				  restitution payments received by the survivors of the interned individuals are
				  also exempt from Iowa income tax.
This rule is intended to implement Iowa Code section
				  4227..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.35 - Exemption of Agent Orange Settlement Proceeds Received by Disabled Veterans or Beneficiaries of Disabled Veterans

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1989, proceeds
				  from settlement of a lawsuit against the manufacturer or distributor of a
				  Vietnam herbicide received by a disabled veteran or the beneficiary of a
				  disabled veteran for damages from exposure to the herbicide are exempt from
				  Iowa income tax to the extent the proceeds are included in federal adjusted
				  gross income. For purposes of this rule, Vietnam herbicide means a herbicide,
				  defoliant, or other causative agent containing a dioxin, including, but not
				  limited to. Agent Orange used in the Vietnam conflict beginning December 22,
				  1961, and ending May 7, 1975.
This rule is intended to implement Iowa Code section
				  4227..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.36 - Exemption of Interest Earned on Bonds Issued to Finance Beginning Farmer Loan Program

Current through Register Vol. 47, No. 3, July 24, 2024
Interest earned on or after July 1, 1989, from bonds or notes
				  issued by the agricultural development authority to finance the beginning
				  farmer loan program is exempt from the state income tax.
This rule is intended to implement Iowa Code sections
				  17517. and
				  4227..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.37 - Exemption of Interest From Bonds Issued by the Iowa Comprehensive Petroleum Underground Storage Tank Fund Board

Current through Register Vol. 47, No. 3, July 24, 2024
Interest received from bonds issued by the Iowa comprehensive
				  petroleum underground storage tank fund board is exempt from state individual
				  income tax. This is effective for interest received from these bonds on or
				  after May 5, 1989, but before July 1, 2009.
This rule is intended to implement Iowa Code section
				  455G6..
Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 40 - Determination of Net Income › Rule 701-40.39 - Exemption of Interest From Bonds or Notes Issued to Fund the 911 Emergency Telephone System

Current through Register Vol. 47, No. 3, July 24, 2024
Interest received on or after May 4, 1990, from bonds or
				  notes issued by the Iowa finance authority to fund the 911 emergency telephone
				  system is exempt from the state income tax.
This rule is intended to implement Iowa Code sections
				  4227.
				  and 477B.20.