Oregon Administrative Rules › Chapter 150 - DEPARTMENT OF REVENUE › Division 316 - PERSONAL INCOME TAX GENERAL PROVISIONS › Section 150-316-0055 - Transitional Provision to Prevent Doubling Income or Deductions

Current through Register Vol. 63, No. 7, July 1, 2024
(1) This section
			 allows and requires adjustments to the taxpayer's net income to alleviate
			 inconsistent treatment of income and deductions resulting from the transition
			 from the Personal Income Tax Act of 1953 to the Internal Revenue
			 Code.
(2) The section allows and
			 requires adjustments to prevent income items from being doubly taxed and
			 deduction items from being deducted twice. In addition adjustments are allowed
			 or required to prevent income from escaping taxation or the loss of a deduction
			 due to the inconsistent treatment.
(3) This section will not apply unless it can
			 be shown that failure to allow or require an adjustment will result in the
			 taxation of income or allowance of a deduction that had already entered into
			 the computation of Oregon income in years beginning prior to January 1, 1969,
			 or, failure to allow or require an adjustment will result in income escaping
			 taxation or loss of a deduction that had already entered into the computation
			 of federal income in years beginning prior to January 1, 1969 and would have
			 been taxed or deducted on an Oregon return if it were not for the change in the
			 Oregon Law. This section does not allow or require adjustments to account for
			 items that are not solely transitional, viz., it does not allow or require
			 adjustments for items of income or deductions not otherwise taxable or
			 deductible under the Internal Revenue Code in years beginning prior to January
			 1, 1969 or beginning on and after January 1, 1969.
Example
			 1: Federal taxes on telephone and telegraph tolls were deductible
			 in years beginning prior to January 1, 1969 for Oregon purposes under the
			 Personal Income Tax Act of 1953. They are not deductible under the Internal
			 Revenue Code and, therefore, not deductible for Oregon purposes for tax years
			 beginning on or after January 1, 1969.
No adjustment is allowed under ORS
				316.047 to deduct these taxes
				for Oregon purposes. The item is not transitional. They were not deductible
				under the Internal Revenue Code for tax years beginning before January 1, 1969
				nor for tax years beginning on or after January 1, 1969.
Example 2: A net operating loss as defined in
			 section 172, Internal Revenue Code, was realized in 1968 for both state and
			 federal purposes. The loss was carried back three years and deducted for
			 federal purposes with none to be carried forward to subsequent years. Oregon
			 law for tax years beginning prior to January 1, 1969 allowed a five year
			 carry-forward and no carry-back. An adjustment is allowed under this section to
			 carry the net operating loss forward for five years. The amount of the net
			 operating loss and the amount deductible in each year shall be determined under
			 section 172, Internal Revenue Code, without regard to the carry-back
			 provisions. This is a deduction that had entered into the computation of
			 federal net income in years beginning prior to January 1, 1969 and would have
			 been deducted on an Oregon return if it were not for the change in the Oregon
			 law.