"Adjusted gross income" defined
Sec. 2. (a) Except as provided in subsections (b) through (d),
"adjusted gross income" means taxable income as defined in Section
63 of the Internal Revenue Code, adjusted as follows:
(1) Add the following amounts:
(A) An amount equal to a deduction allowed or allowable
under Section 166, Section 585, or Section 593 of the
Internal Revenue Code.
(B) An amount equal to a deduction allowed or allowable
under Section 170 of the Internal Revenue Code.
(C) An amount equal to a deduction or deductions allowed
or allowable under Section 63 of the Internal Revenue Code
for taxes based on or measured by income and levied at the
state level by a state of the United States or levied at the
local level by any subdivision of a state of the United States.
(D) The amount of interest excluded under Section 103 of
the Internal Revenue Code or under any other federal law,
minus the associated expenses disallowed in the computation
of taxable income under Section 265 of the Internal Revenue
Code.
(E) An amount equal to the deduction allowed under Section
172 or 1212 of the Internal Revenue Code for net operating
losses or net capital losses.
(F) For a taxpayer that is not a large bank (as defined in
Section 585(c)(2) of the Internal Revenue Code), an amount
equal to the recovery of a debt, or part of a debt, that
becomes worthless to the extent a deduction was allowed
from gross income in a prior taxable year under Section
166(a) of the Internal Revenue Code.
(G) Add the amount necessary to make the adjusted gross
income of any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in an
earlier taxable year equal to the amount of adjusted gross
income that would have been computed had an election not
been made under Section 168(k) of the Internal Revenue
Code to apply bonus depreciation to the property in the year
that it was placed in service.
(H) Add the amount necessary to make the adjusted gross
income of any taxpayer that placed Section 179 property (as
defined in Section 179 of the Internal Revenue Code) in
service in the current taxable year or in an earlier taxable
year equal to the amount of adjusted gross income that
would have been computed had an election for federal
income tax purposes not been made for the year in which the
property was placed in service to take deductions under
Section 179 of the Internal Revenue Code in a total amount
exceeding twenty-five thousand dollars ($25,000).
(I) Add an amount equal to the amount that a taxpayer
claimed as a deduction for domestic production activities for
the taxable year under Section 199 of the Internal Revenue
Code for federal income tax purposes.
(2) Subtract the following amounts:
(A) Income that the United States Constitution or any statute
of the United States prohibits from being used to measure
the tax imposed by this chapter.
(B) Income that is derived from sources outside the United
States, as defined by the Internal Revenue Code.
(C) An amount equal to a debt or part of a debt that becomes
worthless, as permitted under Section 166(a) of the Internal
Revenue Code.
(D) An amount equal to any bad debt reserves that are
included in federal income because of accounting method
changes required by Section 585(c)(3)(A) or Section 593 of
the Internal Revenue Code.
(E) The amount necessary to make the adjusted gross income
of any taxpayer that owns property for which bonus
depreciation was allowed in the current taxable year or in an
earlier taxable year equal to the amount of adjusted gross
income that would have been computed had an election not
been made under Section 168(k) of the Internal Revenue
Code to apply bonus depreciation.
(F) The amount necessary to make the adjusted gross income
of any taxpayer that placed Section 179 property (as defined
in Section 179 of the Internal Revenue Code) in service in
the current taxable year or in an earlier taxable year equal to
the amount of adjusted gross income that would have been
computed had an election for federal income tax purposes
not been made for the year in which the property was placed
in service to take deductions under Section 179 of the
Internal Revenue Code in a total amount exceeding
twenty-five thousand dollars ($25,000).
(b) In the case of a credit union, "adjusted gross income" for a
taxable year means the total transfers to undivided earnings minus
dividends for that taxable year after statutory reserves are set aside
under IC 28-7-1-24.
(c) In the case of an investment company, "adjusted gross income"
means the company's federal taxable income multiplied by the
quotient of:
(1) the aggregate of the gross payments collected by the
company during the taxable year from old and new business
upon investment contracts issued by the company and held by
residents of Indiana; divided by
(2) the total amount of gross payments collected during the
taxable year by the company from the business upon investment
contracts issued by the company and held by persons residing
within Indiana and elsewhere.
(d) As used in subsection (c), "investment company" means a
person, copartnership, association, limited liability company, or
corporation, whether domestic or foreign, that:
(1) is registered under the Investment Company Act of 1940 (15
U.S.C. 80a-1 et seq.); and
(2) solicits or receives a payment to be made to itself and issues
in exchange for the payment:
(A) a so-called bond;
(B) a share;
(C) a coupon;
(D) a certificate of membership;
(E) an agreement;
(F) a pretended agreement; or
(G) other evidences of obligation;
entitling the holder to anything of value at some future date, if
the gross payments received by the company during the taxable
year on outstanding investment contracts, plus interest and
dividends earned on those contracts (by prorating the interest
and dividends earned on investment contracts by the same
proportion that certificate reserves (as defined by the
Investment Company Act of 1940) is to the company's total
assets) is at least fifty percent (50%) of the company's gross
payments upon investment contracts plus gross income from all
other sources except dividends from subsidiaries for the taxable
year. The term "investment contract" means an instrument listed
in clauses (A) through (G).
As added by P.L.347-1989(ss), SEC.1. Amended by P.L.21-1990,
SEC.15; P.L.68-1991, SEC.1; P.L.8-1993, SEC.94; P.L.28-1997,
SEC.20; P.L.119-1998, SEC.13; P.L.273-1999, SEC.52;
P.L.105-2003, SEC.4; P.L.246-2005, SEC.75.
Last modified: May 28, 2006