§235-2.45  Operation of certain InternalRevenue Code provisions; sections 641 to 7518.  (a)  Section 641 (withrespect to imposition of tax) of the Internal Revenue Code shall be operativefor the purposes of this chapter subject to the following:

(1)  The deduction for exemptions shall be allowed asprovided in section 235-54(b);

(2)  The deduction for contributions and gifts indetermining taxable income shall be limited to the amount allowed in the caseof an individual, unless the contributions and gifts are to be used exclusivelyin the State; and

(3)  The tax imposed by section 1(e) of the InternalRevenue Code as applied by section 641 of the Internal Revenue Code is herebyimposed by this chapter at the rate and amount as determined under section 235-51on estates and trusts.

(b)  Section 667 (with respect to treatment ofamounts deemed distributed by trusts in preceding years) of the InternalRevenue Code shall be operative for the purposes of this chapter and the taximposed therein is hereby imposed by this chapter at the rate determined underthis chapter; except that the reference to tax-exempt interest to which section103 of the Internal Revenue Code applies in section 667(a) of the InternalRevenue Code shall instead be a reference to tax-exempt interest to whichsection 235-7(b) applies.

(c)  Section 685 (with respect to treatment ofqualified funeral trusts) of the Internal Revenue Code shall be operative forpurposes of this chapter, except that the tax imposed under this chapter shallbe computed at the tax rates provided under section 235-51, and no deductionfor the exemption amount provided in section 235-54(b) shall be allowed.  Thecost-of-living adjustment determined under section 1(f)(3) of the InternalRevenue Code shall be operative for the purpose of applying section 685(c)(3)under this chapter.

(d)  Section 704 of the Internal Revenue Code(with respect to a partner's distributive share) shall be operative forpurposes of this chapter; except that section 704(b)(2) shall not apply to:

(1)  Allocations of the high technology businessinvestment tax credit allowed by section 235-110.9 for investments made beforeMay 1, 2009;

(2)  Allocations of net operating loss pursuant tosection 235-111.5;

(3)  Allocations of the attractions and educationalfacilities tax credit allowed by section 235-110.46; or

(4)  Allocations of low-income housing tax creditsamong partners under section 235-110.8.

(e)  Section 1212 (with respect to capital losscarrybacks and carryforwards) of the Internal Revenue Code shall be operativefor the purposes of this chapter; except that for the purposes of this chapter,the capital loss carryback provisions of section 1212 shall not be operativeand the capital loss carryforward allowed by section 1212(a) shall be limitedto five years; except for a qualified high technology business as defined insection 235-7.3, which shall be limited to fifteen years.

(f)  Section 1221 (with respect to thedefinition of capital assets) is operative; provided that the provisions of section301 of Public Law 110-343, which provide that gain or loss from the sale orexchange of any applicable preferred stock by any applicable financialinstitution (such terms being defined by Public Law 110-343) shall be treatedas ordinary income or loss, shall not be operative.  A sale or exchange of anyapplicable preferred stock by any applicable financial institution (as thoseterms are defined by section 301 of Public Law 110-343) shall be treated as asale of a capital asset and taxed accordingly.

(g)  Subchapter S (sections 1361 to 1379) (withrespect to tax treatment of S corporations and their shareholders) of chapter 1of the Internal Revenue Code shall be operative for the purposes of thischapter as provided in part VII.

(h)  Section 1400N (with respect to taxbenefits for Gulf Opportunity Zone) of the Internal Revenue Code shall beoperative for the purposes of this chapter, except that sections 1400N(a) (withrespect to tax-exempt bond financing); 1400N(b) (with respect to advancerefundings of certain tax-exempt bonds); 1400N(c) (with respect to the lowincome housing credit); 1400N(d) (with respect to special allowance for certainproperty acquired on or after August 28, 2005); 1400N(e) (with respect toincrease in expensing under section 179); 1400N(h) (with respect to increase inrehabilitation credit); 1400N(l) (with respect to credit to holders of Gulf taxcredit bonds); 1400N(m) (with respect to application of new markets tax creditto investments in community development entities serving Gulf OpportunityZone); 1400N(n) (with respect to treatment of representations regarding incomeeligibility for purposes of qualified residential rental projectrequirements) shall not be operative for purposes of this chapter.

(i)  Section 1400S (with respect to additionaltax relief provisions) of the Internal Revenue Code shall be operative for thepurposes of this chapter, except that section 1400S(d) (with respect to thespecial rule for determining earned income) shall not be operative for thepurposes of this chapter.

(j)  Section 6015 (with respect to relief fromjoint and several liability on joint return) of the Internal Revenue Code isoperative for purposes of this chapter.

(k)  Sections 6103(i)(3)(C) and 6103(i)(7)(with respect to disclosures of information to the United States JusticeDepartment or appropriate federal or state law enforcement agency for purposesof investigating terrorist incidents, threats, or activities, and for analyzingintelligence concerning investigating terrorist incidents, threats, oractivities) of the Internal Revenue Code shall be operative for the purposes ofthis chapter.

(l)  Subchapter C (sections 6221 to 6233) (withrespect to tax treatment of partnership items) of chapter 63 of the Internal RevenueCode shall be operative for the purposes of this chapter.

(m)  Subchapter D (sections 6240 to 6255) (withrespect to simplified audit procedures for electing large partnerships) of theInternal Revenue Code shall be operative for the purposes of this chapter, withdue regard to chapter 232 relating to tax appeals.

(n)  Section 6501(e) (with respect tolimitation on assessment and collection where there is a substantial omissionof items) of the Internal Revenue Code shall be operative for purposes of thischapter.

(o)  Section 6511(h) (with respect to runningof periods of limitation suspended while taxpayer is unable to manage financialaffairs due to disability) of the Internal Revenue Code shall be operative forpurposes of this chapter, with due regard to section 235-111 relating to thelimitation period for assessment, levy, collection, or credit.

(p)  Section 7518 (with respect to capitalconstruction fund for commercial fishers) of the Internal Revenue Code shall beoperative for the purposes of this chapter.  Qualified withdrawals for theacquisition, construction, or reconstruction of any qualified asset that isattributable to deposits made before the effective date of this section shallnot reduce the basis of the asset when withdrawn.  Qualified withdrawals shallbe treated on a first-in-first-out basis. [L 2000, c 148, pt of §2, c 174, §1,and c 297, pt of §5; am L 2001, c 45, §2 and c 221, §6; am L 2003, c 100, §4;am L 2005, c 60, §4; am L 2006, c 124, §2; am L 2008, c 93, §3; am L 2009, c133, §4 and c 178, §2]

 

Note

 

  The 2008 amendment applies to taxable years beginning afterDecember 31, 2007; provided that the retroactive and prospective effectivedates contained in the congressional acts relating to the Internal Revenue Codeand enacted during 2007 shall be operative for chapter 235.  L 2008, c 93, §7.

  The L 2009, c 178 amendment applies to investments made,renovation costs incurred, or eligible depreciable tangible property placed inservice on or after May 1, 2009.  L 2009, c 178, §10.