As Passed by the House

128th General Assembly
Regular Session
2009-2010
Sub. S. B. No. 106


Senators Buehrer, Kearney 

Cosponsors: Senators Miller, R., Schuler, Seitz, Turner, Fedor, Gillmor, Harris, Hughes, Schiavoni, Wagoner, Wilson, Smith, Sawyer 

Representatives Book, Stautberg, Harwood, Skindell, Foley, Stebelton, Okey, Adams, J., Blessing, Brown, Bubp, Carney, Chandler, Coley, Combs, DeBose, DeGeeter, Derickson, Domenick, Dyer, Evans, Fende, Gardner, Goyal, Grossman, Hackett, Hite, Huffman, Letson, Luckie, Maag, McClain, Mecklenborg, Moran, Oelslager, Pillich, Pryor, Ruhl, Sayre, Sears, Snitchler, Stewart, Szollosi, Winburn, Yuko 



A BILL
To amend sections 2101.16, 2107.76, 2109.21, 2111.05, 1
2111.18, 2125.04, 2305.19, 5747.01, and 5815.31 2
of the Revised Code to exclude from the 3
application of the savings statute certain estate 4
and trust proceedings that have limitation 5
periods, to raise the threshold amount for the 6
termination or avoidance of guardianships of 7
small estates of wards, to raise the threshold 8
amount for the avoidance of guardianship upon the 9
settlement of claims of minors or adult 10
incompetents, to clarify that termination of 11
marriage revokes any trust provision conferring a 12
beneficial interest on the former spouse, to 13
modify the period within which a plaintiff in a 14
wrongful death action may commence a new action 15
after the reversal of a judgment for the 16
plaintiff or the plaintiff's failure otherwise 17
than upon the merits, and to modify the 18
residency qualifications for a person's 19
appointment as a guardian.20


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1. That sections 2101.16, 2107.76, 2109.21, 2111.05, 21
2111.18, 2125.04, 2305.19, 5747.01, and 5815.31 of the Revised 22
Code be amended to read as follows:23

       Sec. 2101.16.  (A) Except as provided in section 2101.164 of 24
the Revised Code, the fees enumerated in this division shall be 25
charged and collected, if possible, by the probate judge and shall 26
be in full for all services rendered in the respective27
proceedings:28

(1) Account, in addition to advertising charges 29
$ 12.00 30
Waivers and proof of notice of hearing on account, per page, minimum one dollar 31
$ 1.00 32
(2) Account of distribution, in addition to advertising charges 33
$ 7.00 34
(3) Adoption of child, petition for 35
$ 50.00 36
(4) Alter or cancel contract for sale or purchase of real estate, petition to 37
$ 20.00 38
(5) Application and order not otherwise provided for in this section or by rule adopted pursuant to division (E) of this section 39
$ 5.00 40
(6) Appropriation suit, per day, hearing in 41
$ 20.00 42
(7) Birth, application for registration of 43
$ 7.00 44
(8) Birth record, application to correct 45
$ 5.00 46
(9) Bond, application for new or additional 47
$ 5.00 48
(10) Bond, application for release of surety or reduction of 49
$ 5.00 50
(11) Bond, receipt for securities deposited in lieu of 51
$ 5.00 52
(12) Certified copy of journal entry, record, or proceeding, per page, minimum fee one dollar 53
$ 1.00 54
(13) Citation and issuing citation, application for 55
$ 5.00 56
(14) Change of name, petition for 57
$ 20.00 58
(15) Claim, application of administrator or executor for allowance of administrator's or executor's own 59
$ 10.00 60
(16) Claim, application to compromise or settle 61
$ 10.00 62
(17) Claim, authority to present 63
$ 10.00 64
(18) Commissioner, appointment of 65
$ 5.00 66
(19) Compensation for extraordinary services and attorney's fees for fiduciary, application for 67
$ 5.00 68
(20) Competency, application to procure adjudication of 69
$ 20.00 70
(21) Complete contract, application to 71
$ 10.00 72
(22) Concealment of assets, citation for 73
$ 10.00 74
(23) Construction of will, petition for 75
$ 20.00 76
(24) Continue decedent's business, application to 77
$ 10.00 78
Monthly reports of operation 79
$ 5.00 80
(25) Declaratory judgment, petition for 81
$ 20.00 82
(26) Deposit of will 83
$ 5.00 84
(27) Designation of heir 85
$ 20.00 86
(28) Distribution in kind, application, assent, and order for 87
$ 5.00 88
(29) Distribution under section 2109.36 of the Revised Code, application for an order of 89
$ 7.00 90
(30) Docketing and indexing proceedings, including the filing and noting of all necessary documents, maximum fee, fifteen dollars 91
$ 15.00 92
(31) Exceptions to any proceeding named in this section, contest of appointment or 93
$ 10.00 94
(32) Election of surviving partner to purchase assets of partnership, proceedings relating to 95
$ 10.00 96
(33) Election of surviving spouse under will 97
$ 5.00 98
(34) Fiduciary, including an assignee or trustee of an insolvent debtor or any guardian or conservator accountable to the probate court, appointment of 99
$ 35.00 100
(35) Foreign will, application to record 101
$ 10.00 102
Record of foreign will, additional, per page 103
$ 1.00 104
(36) Forms when supplied by the probate court, not to exceed 105
$ 10.00 106
(37) Heirship, petition to determine 107
$ 20.00 108
(38) Injunction proceedings 109
$ 20.00 110
(39) Improve real estate, petition to 111
$ 20.00 112
(40) Inventory with appraisement 113
$ 10.00 114
(41) Inventory without appraisement 115
$ 7.00 116
(42) Investment or expenditure of funds, application for 117
$ 10.00 118
(43) Invest in real estate, application to 119
$ 10.00 120
(44) Lease for oil, gas, coal, or other mineral, petition to 121
$ 20.00 122
(45) Lease or lease and improve real estate, petition to 123
$ 20.00 124
(46) Marriage license 125
$ 10.00 126
Certified abstract of each marriage 127
$ 2.00 128
(47) Minor or mentally ill incompetent person, etc., disposal of estate under ten twenty-five thousand dollars of 129
$ 10.00 130
(48) Mortgage or mortgage and repair or improve real estate, petition to 131
$ 20.00 132
(49) Newly discovered assets, report of 133
$ 7.00 134
(50) Nonresident executor or administrator to bar creditors' claims, proceedings by 135
$ 20.00 136
(51) Power of attorney or revocation of power, bonding company 137
$ 10.00 138
(52) Presumption of death, petition to establish 139
$ 20.00 140
(53) Probating will 141
$ 15.00 142
Proof of notice to beneficiaries 143
$ 5.00 144
(54) Purchase personal property, application of surviving spouse to 145
$ 10.00 146
(55) Purchase real estate at appraised value, petition of surviving spouse to 147
$ 20.00 148
(56) Receipts in addition to advertising charges, application and order to record 149
$ 5.00 150
Record of those receipts, additional, per page 151
$ 1.00 152
(57) Record in excess of fifteen hundred words in any proceeding in the probate court, per page 153
$ 1.00 154
(58) Release of estate by mortgagee or other lienholder 155
$ 5.00 156
(59) Relieving an estate from administration under section 2113.03 of the Revised Code or granting an order for a summary release from administration under section 2113.031 of the Revised Code 157
$ 60.00 158
(60) Removal of fiduciary, application for 159
$ 10.00 160
(61) Requalification of executor or administrator 161
$ 10.00 162
(62) Resignation of fiduciary 163
$ 5.00 164
(63) Sale bill, public sale of personal property 165
$ 10.00 166
(64) Sale of personal property and report, application for 167
$ 10.00 168
(65) Sale of real estate, petition for 169
$ 25.00 170
(66) Terminate guardianship, petition to 171
$ 10.00 172
(67) Transfer of real estate, application, entry, and certificate for 173
$ 7.00 174
(68) Unclaimed money, application to invest 175
$ 7.00 176
(69) Vacate approval of account or order of distribution, motion to 177
$ 10.00 178
(70) Writ of execution 179
$ 5.00 180
(71) Writ of possession 181
$ 5.00 182
(72) Wrongful death, application and settlement of claim for 183
$ 20.00 184
(73) Year's allowance, petition to review 185
$ 7.00 186
(74) Guardian's report, filing and review of 187
$ 5.00 188

       (B)(1) In relation to an application for the appointment of a189
guardian or the review of a report of a guardian under section190
2111.49 of the Revised Code, the probate court, pursuant to court191
order or in accordance with a court rule, may direct that the192
applicant or the estate pay any or all of the expenses of an193
investigation conducted pursuant to section 2111.041 or division194
(A)(2) of section 2111.49 of the Revised Code. If the195
investigation is conducted by a public employee or investigator196
who is paid by the county, the fees for the investigation shall be 197
paid into the county treasury. If the court finds that an alleged 198
incompetent or a ward is indigent, the court may waive the costs, 199
fees, and expenses of an investigation.200

       (2) In relation to the appointment or functioning of a 201
guardian for a minor or the guardianship of a minor, the probate 202
court may direct that the applicant or the estate pay any or all 203
of the expenses of an investigation conducted pursuant to section 204
2111.042 of the Revised Code. If the investigation is conducted by 205
a public employee or investigator who is paid by the county, the206
fees for the investigation shall be paid into the county treasury. 207
If the court finds that the guardian or applicant is indigent, the 208
court may waive the costs, fees, and expenses of an investigation.209

       (C) Thirty dollars of the thirty-five-dollar fee collected210
pursuant to division (A)(34) of this section and twenty dollars of 211
the sixty-dollar fee collected pursuant to division (A)(59) of 212
this section shall be deposited by the county treasurer in the 213
indigent guardianship fund created pursuant to section 2111.51 of 214
the Revised Code.215

       (D) The fees of witnesses, jurors, sheriffs, coroners, and216
constables for services rendered in the probate court or by order217
of the probate judge shall be the same as provided for like218
services in the court of common pleas.219

       (E) The probate court, by rule, may require an advance220
deposit for costs, not to exceed one hundred twenty-five dollars,221
at the time application is made for an appointment as executor or222
administrator or at the time a will is presented for probate.223

       (F) The probate court, by rule, shall establish a reasonable 224
fee, not to exceed fifty dollars, for the filing of a petition for 225
the release of information regarding an adopted person's name by 226
birth and the identity of the adopted person's biological parents 227
and biological siblings pursuant to section 3107.41 of the Revised 228
Code, all proceedings relative to the petition, the entry of an 229
order relative to the petition, and all services required to be 230
performed in connection with the petition. The probate court may 231
use a reasonable portion of a fee charged under authority of this 232
division to reimburse any agency, as defined in section 3107.39 of 233
the Revised Code, for any services it renders in performing a task 234
described in section 3107.41 of the Revised Code relative to or in 235
connection with the petition for which the fee was charged.236

       (G)(1) Thirty dollars of the fifty-dollar fee collected 237
pursuant to division (A)(3) of this section shall be deposited 238
into the "putative father registry fund," which is hereby created 239
in the state treasury. The department of job and family services 240
shall use the money in the fund to fund the department's costs of241
performing its duties related to the putative father registry 242
established under section 3107.062 of the Revised Code.243

       (2) If the department determines that money in the putative 244
father registry fund is more than is needed for its duties related 245
to the putative father registry, the department may use the 246
surplus moneys in the fund as permitted in division (C) of section 247
2151.3529, division (B) of section 2151.3530, or section 5103.155 248
of the Revised Code.249

       Sec. 2107.76. (A) No person who has received or waived the 250
right to receive the notice of the admission of a will to probate251
required by section 2107.19 of the Revised Code may commence an252
action permitted by section 2107.71 of the Revised Code to contest253
the validity of the will more than three months after the filing254
of the certificate described in division (A)(3) of section 2107.19255
of the Revised Code. No other person may commence an action 256
permitted by section 2107.71 of the Revised Code to contest the 257
validity of the will more than three months after the initial 258
filing of a certificate described in division (A)(3) of section 259
2107.19 of the Revised Code. A person under any legal disability260
nevertheless may commence an action permitted by section 2107.71261
of the Revised Code to contest the validity of the will within 262
three months after the disability is removed, but the rights saved263
shall not affect the rights of a purchaser, lessee, or264
encumbrancer for value in good faith and shall not impose any265
liability upon a fiduciary who has acted in good faith, or upon a266
person delivering or transferring property to any other person267
under authority of a will, whether or not the purchaser, lessee,268
encumbrancer, fiduciary, or other person had actual or269
constructive notice of the legal disability.270

       (B) Section 2305.19 of the Revised Code does not apply to an 271
action permitted by section 2107.71 of the Revised Code to contest 272
the validity of a will.273

       Sec. 2109.21.  (A) An administrator, special administrator, 274
administrator de bonis non, or administrator with the will annexed 275
shall be a resident of this state and shall be removed on proof 276
that the administrator is no longer a resident of this state.277

       (B)(1) To qualify for appointment as executor or trustee, an 278
executor or a trustee named in a will or nominated in accordance 279
with any power of nomination conferred in a will, may be a 280
resident of this state or, as provided in this division, a281
nonresident of this state. To qualify for appointment, a282
nonresident executor or trustee named in, or nominated pursuant283
to, a will shall be an individual who is related to the maker of284
the will by consanguinity or affinity, or a person who resides in285
a state that has statutes or rules that authorize the appointment286
of a nonresident person who is not related to the maker of a will287
by consanguinity or affinity, as an executor or trustee when named 288
in, or nominated pursuant to, a will. No such executor or trustee 289
shall be refused appointment or removed solely because the290
executor or trustee is not a resident of this state.291

       The court may require that a nonresident executor or trustee 292
named in, or nominated pursuant to, a will assure that all of the 293
assets of the decedent that are in the county at the time of the 294
death of the decedent will remain in the county until distribution 295
or until the court determines that the assets may be removed from 296
the county.297

       (2) In accordance with this division and section 2129.08 of 298
the Revised Code, the court shall appoint as an ancillary299
administrator a person who is named in the will of a nonresident300
decedent, or who is nominated in accordance with any power of301
nomination conferred in the will of a nonresident decedent, as a302
general executor of the decedent's estate or as executor of the303
portion of the decedent's estate located in this state, whether or 304
not the person so named or nominated is a resident of this state.305

       To qualify for appointment as an ancillary administrator, a306
person who is not a resident of this state and who is named or307
nominated as described in this division, shall be an individual308
who is related to the maker of the will by consanguinity or309
affinity, or a person who resides in a state that has statutes or310
rules that authorize the appointment of a nonresident of that311
state who is not related to the maker of a will by consanguinity312
or affinity, as an ancillary administrator when the nonresident is 313
named in a will or nominated in accordance with any power of314
nomination conferred in a will. If a person who is not a resident 315
of this state and who is named or nominated as described in this 316
division so qualifies for appointment as an ancillary317
administrator and if the provisions of section 2129.08 of the318
Revised Code are satisfied, the court shall not refuse to appoint319
the person, and shall not remove the person, as ancillary320
administrator solely because the person is not a resident of this321
state.322

       The court may require that an ancillary administrator who is 323
not a resident of this state and who is named or nominated as324
described in this division, assure that all of the assets of the325
decedent that are in the county at the time of the death of the326
decedent will remain in the county until distribution or until the 327
court determines that the assets may be removed from the county.328

       (C)(1) A guardian shall be a resident of the countythis 329
state, except that the court may appoint a nonresident of the 330
county who is a resident of this state as a guardian of the 331
person, the estate, or both; that a nonresident of the county or 332
of this state may be appointed a guardian, if any of the following 333
applies:334

       (a) The nonresident is named in a will by a parent of a minor335
or if.336

       (b) The nonresident is selected by a minor over the age of 337
fourteen years as provided by section 2111.12 of the Revised 338
Code; and that a nonresident of the county or of this state may 339
be appointed a guardian if.340

       (c) The nonresident is nominated in or pursuant to a durable 341
power of attorney as described in division (D) of section 1337.09 342
of the Revised Code or a writing as described in division (A) of 343
section 2111.121 of the Revised Code. A344

       (2) A guardian, other than a guardian named in a will by a 345
parent of a minor, selected by a minor over the age of fourteen 346
years, or nominated in or pursuant to such a durable power of 347
attorney or writing described in division (C)(1)(c) of this 348
section, may be removed on proof that the guardian is no longer 349
a resident of the county orthis state in which the guardian 350
resided at the time of the guardian's appointment.351

       (D) Any fiduciary, whose residence qualifications are not352
defined in this section, shall be a resident of this state, and353
shall be removed on proof that the fiduciary is no longer a 354
resident of this state.355

       (E) Any fiduciary, in order to assist in the carrying out of 356
the fiduciary's fiduciary duties, may employ agents who are not357
residents of the county or of this state.358

       Sec. 2111.05.  When the whole estate of a ward, or of several 359
wards jointly, under the same guardianship, does not exceed ten360
twenty-five thousand dollars in value, the guardian may apply to361
the probate court for an order to terminate the guardianship. Upon 362
proof that it would be for the best interest of the ward to363
terminate the guardianship, the court may order the guardianship364
terminated, and direct the guardian, if the ward is a minor, to365
deposit the assets of the guardianship in a depository authorized366
to receive fiduciary funds, payable to the ward when hethe ward367
attains majority, or the court may authorize the delivery of the 368
assets to the natural guardian of the minor, to the person by whom 369
the minor is maintained, to the executive director of children370
services in the county, or to the minor himselfminor's own self.371

       If the ward is an incompetent, and the court orders the372
guardianship terminated, the court may authorize the deposit of373
the assets of the guardianship in a depository authorized to374
receive fiduciary funds in the name of a suitable person to be375
designated by the court, or if the assets do not consist of money, 376
the court may authorize delivery to a suitable person to be 377
designated by the court. The person receiving the assets shall 378
hold and dispose of them in the manner the court directs.379

       If the court refuses to grant the application to terminate380
the guardianship, or if no such application is presented to the381
court, the guardian only shall be required to render account upon382
the termination of histhe guardianship, upon order of the probate383
court made upon its own motion, or upon the order of the court384
made on the motion of a person interested in the wards or their385
property, for good cause shown, and set forth upon the journal of386
the court.387

       If the estate is tentwenty-five thousand dollars or less and 388
the ward is a minor, the court, without the appointment of a 389
guardian by the court, or the giving of bond, may authorize the 390
deposit in a depository authorized to receive fiduciary funds, 391
payable to the guardian when appointed, or to the ward when hethe 392
ward attains majority, or the court may authorize delivery to the 393
natural guardian of the minor, to the person by whom the minor is 394
maintained, to the executive director who is responsible for the 395
administration of children services in the county, or to the minor 396
himselfminor's own self.397

       If the whole estate of a person over eighteen years of age,398
who has been adjudged mentally ill or mentally retarded399
incompetent, does not exceed tentwenty-five thousand dollars in 400
value, the court, without the appointment of a guardian by the 401
court or the giving of bond, may authorize the deposit of the 402
estate in a depository authorized to receive fiduciary funds in 403
the name of a suitable person to be designated by the court, or if 404
the assets do not consist of money, the court may authorize 405
delivery to a suitable person to be designated by the court. The 406
person receiving the assets shall hold and dispose of them in the 407
manner the court directs.408

       Sec. 2111.18. WhenIf personal injury, damage to tangible or409
intangible property, or damage or loss on account of personal410
injury or damage to tangible or intangible property is caused to a 411
ward by wrongful act, neglect, or default that would entitle the 412
ward to maintain an action and recover damages for the injury, 413
damage, or loss, and when any ward is entitled to maintain an 414
action for damages or any other relief based on any claim or is 415
subject to any claim to recover damages or any other relief based 416
on any claim, the guardian of the estate of the ward may adjust 417
and settle the claim with the advice, approval, and consent of the 418
probate court. In the settlement, if the ward is a minor, the 419
parent or parents may waive all claim for damages on account of 420
loss of service of the minor, and that claim may be included in 421
the settlement. However, whenIf it is proposed that thea claim 422
involved be settled for tenthe net amount of twenty-five thousand 423
dollars or less after payment of fees and expenses as allowed by 424
the court, the court, upon application by any suitable person whom 425
the court may authorize to receive and receipt for the settlement, 426
may authorize the settlement without the appointment of a guardian427
and authorize the delivery of the moneys to the natural guardian428
of the minor, to the person by whom the minor is maintained, or to 429
the minor himselfas provided in section 2111.05 of the Revised 430
Code. The court may authorize the minor or person receiving the 431
moneys to execute a complete release on account of the receipt. 432
The payment shall be a complete and final discharge of any such433
that claim. In the settlement, if the ward is a minor, the parent 434
or parents of the minor may waive all claim for damages on account 435
of loss of service of the minor, and that claim may be included in 436
the settlement.437

       Sec. 2125.04.  In every civil action for wrongful death that 438
is commenced or attempted to be commenced within the time 439
specified by division (D)(1) or (D)(2)(c), (d), (e), (f), or (g) 440
of section 2125.02 of the Revised Code, if a judgment for the 441
plaintiff is reversed or the plaintiff fails otherwise than upon 442
the merits and if the time limited by any of those divisions for 443
the commencement of the action has expired at the date of the 444
reversal or failure, the plaintiff or, if the plaintiff dies and 445
the cause of action survives, the personal representative of the 446
plaintiff may commence a new civil action for wrongful death 447
within one year after thatthe date of the reversal of the 448
judgment or the plaintiff's failure otherwise than upon the merits 449
or within the period specified by any of those divisions, 450
whichever occurs later.451

       Sec. 2305.19. (A) In any action that is commenced or 452
attempted to be commenced, if in due time a judgment for the 453
plaintiff is reversed or if the plaintiff fails otherwise than 454
upon the merits, the plaintiff or, if the plaintiff dies and the 455
cause of action survives, the plaintiff's representative may 456
commence a new action within one year after the date of the 457
reversal of the judgment or the plaintiff's failure otherwise than 458
upon the merits or within the period of the original applicable 459
statute of limitations, whichever occurs later. This division 460
applies to any claim asserted in any pleading by a defendant. 461

       (B) If the defendant in an action described in division (A) 462
of this section is a foreign or domestic corporation, and whether 463
its charter prescribes the manner or place of service of process 464
on the defendant, and if it passes into the hands of a receiver 465
before the expiration of the one year period or the period of the 466
original applicable statute of limitations, whichever is 467
applicable, as described in that division, then service to be made 468
within one year following the original service or attempt to begin 469
the action may be made upon that receiver or the receiver's470
cashier, treasurer, secretary, clerk, or managing agent, or if 471
none of these officers can be found, by a copy left at the office 472
or the usual place of business of any of those agents or officers473
of the receiver with the person having charge of the office or 474
place of business. If that corporation is a railroad company, 475
summons may be served on any regular ticket or freight agent of 476
the receiver, and if there is no regular ticket or freight agent 477
of the receiver, then upon any conductor of the receiver, in any 478
county in the state in which the railroad is located. The summons 479
shall be returned as if served on that defendant corporation.480

       (C) This section does not apply to an action or proceeding 481
arising under section 2106.22, 2107.76, 2109.35, 2115.16, 5806.04, 482
or 5810.05 of the Revised Code.483

       Sec. 5747.01.  Except as otherwise expressly provided or484
clearly appearing from the context, any term used in this chapter 485
that is not otherwise defined in this section has the same meaning 486
as when used in a comparable context in the laws of the United487
States relating to federal income taxes or if not used in a 488
comparable context in those laws, has the same meaning as in 489
section 5733.40 of the Revised Code. Any reference in this chapter 490
to the Internal Revenue Code includes other laws of the United 491
States relating to federal income taxes.492

       As used in this chapter:493

       (A) "Adjusted gross income" or "Ohio adjusted gross income"494
means federal adjusted gross income, as defined and used in the495
Internal Revenue Code, adjusted as provided in this section:496

       (1) Add interest or dividends on obligations or securities of 497
any state or of any political subdivision or authority of any498
state, other than this state and its subdivisions and authorities.499

       (2) Add interest or dividends on obligations of any500
authority, commission, instrumentality, territory, or possession501
of the United States to the extent that the interest or dividends502
are exempt from federal income taxes but not from state income503
taxes.504

       (3) Deduct interest or dividends on obligations of the United 505
States and its territories and possessions or of any authority, 506
commission, or instrumentality of the United States to the extent507
that the interest or dividends are included in federal adjusted 508
gross income but exempt from state income taxes under the laws of 509
the United States.510

       (4) Deduct disability and survivor's benefits to the extent511
included in federal adjusted gross income.512

       (5) Deduct benefits under Title II of the Social Security Act 513
and tier 1 railroad retirement benefits to the extent included in 514
federal adjusted gross income under section 86 of the Internal515
Revenue Code.516

       (6) In the case of a taxpayer who is a beneficiary of a trust 517
that makes an accumulation distribution as defined in section 665 518
of the Internal Revenue Code, add, for the beneficiary's taxable 519
years beginning before 2002, the portion, if any, of such 520
distribution that does not exceed the undistributed net income of 521
the trust for the three taxable years preceding the taxable year 522
in which the distribution is made to the extent that the portion 523
was not included in the trust's taxable income for any of the 524
trust's taxable years beginning in 2002 or thereafter.525
"Undistributed net income of a trust" means the taxable income of526
the trust increased by (a)(i) the additions to adjusted gross527
income required under division (A) of this section and (ii) the528
personal exemptions allowed to the trust pursuant to section529
642(b) of the Internal Revenue Code, and decreased by (b)(i) the530
deductions to adjusted gross income required under division (A) of531
this section, (ii) the amount of federal income taxes attributable532
to such income, and (iii) the amount of taxable income that has533
been included in the adjusted gross income of a beneficiary by534
reason of a prior accumulation distribution. Any undistributed net535
income included in the adjusted gross income of a beneficiary536
shall reduce the undistributed net income of the trust commencing537
with the earliest years of the accumulation period.538

       (7) Deduct the amount of wages and salaries, if any, not539
otherwise allowable as a deduction but that would have been540
allowable as a deduction in computing federal adjusted gross541
income for the taxable year, had the targeted jobs credit allowed542
and determined under sections 38, 51, and 52 of the Internal543
Revenue Code not been in effect.544

       (8) Deduct any interest or interest equivalent on public545
obligations and purchase obligations to the extent that the546
interest or interest equivalent is included in federal adjusted547
gross income.548

       (9) Add any loss or deduct any gain resulting from the sale,549
exchange, or other disposition of public obligations to the extent550
that the loss has been deducted or the gain has been included in551
computing federal adjusted gross income.552

       (10) Deduct or add amounts, as provided under section553
5747.70 of the Revised Code, related to contributions to variable554
college savings program accounts made or tuition units purchased555
pursuant to Chapter 3334. of the Revised Code.556

       (11)(a) Deduct, to the extent not otherwise allowable as a557
deduction or exclusion in computing federal or Ohio adjusted gross558
income for the taxable year, the amount the taxpayer paid during559
the taxable year for medical care insurance and qualified560
long-term care insurance for the taxpayer, the taxpayer's spouse,561
and dependents. No deduction for medical care insurance under562
division (A)(11) of this section shall be allowed either to any563
taxpayer who is eligible to participate in any subsidized health564
plan maintained by any employer of the taxpayer or of the565
taxpayer's spouse, or to any taxpayer who is entitled to, or on566
application would be entitled to, benefits under part A of Title567
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.568
301, as amended. For the purposes of division (A)(11)(a) of this569
section, "subsidized health plan" means a health plan for which570
the employer pays any portion of the plan's cost. The deduction571
allowed under division (A)(11)(a) of this section shall be the net572
of any related premium refunds, related premium reimbursements, or573
related insurance premium dividends received during the taxable574
year.575

       (b) Deduct, to the extent not otherwise deducted or excluded576
in computing federal or Ohio adjusted gross income during the577
taxable year, the amount the taxpayer paid during the taxable578
year, not compensated for by any insurance or otherwise, for579
medical care of the taxpayer, the taxpayer's spouse, and580
dependents, to the extent the expenses exceed seven and one-half581
per cent of the taxpayer's federal adjusted gross income.582

       (c) For purposes of division (A)(11) of this section,583
"medical care" has the meaning given in section 213 of the584
Internal Revenue Code, subject to the special rules, limitations,585
and exclusions set forth therein, and "qualified long-term care"586
has the same meaning given in section 7702B(c) of the Internal587
Revenue Code.588

       (12)(a) Deduct any amount included in federal adjusted gross589
income solely because the amount represents a reimbursement or590
refund of expenses that in any year the taxpayer had deducted as591
an itemized deduction pursuant to section 63 of the Internal592
Revenue Code and applicable United States department of the593
treasury regulations. The deduction otherwise allowed under594
division (A)(12)(a) of this section shall be reduced to the extent595
the reimbursement is attributable to an amount the taxpayer596
deducted under this section in any taxable year.597

       (b) Add any amount not otherwise included in Ohio adjusted598
gross income for any taxable year to the extent that the amount is599
attributable to the recovery during the taxable year of any amount600
deducted or excluded in computing federal or Ohio adjusted gross601
income in any taxable year.602

       (13) Deduct any portion of the deduction described in section 603
1341(a)(2) of the Internal Revenue Code, for repaying previously 604
reported income received under a claim of right, that meets both 605
of the following requirements:606

       (a) It is allowable for repayment of an item that was607
included in the taxpayer's adjusted gross income for a prior608
taxable year and did not qualify for a credit under division (A)609
or (B) of section 5747.05 of the Revised Code for that year;610

       (b) It does not otherwise reduce the taxpayer's adjusted611
gross income for the current or any other taxable year.612

       (14) Deduct an amount equal to the deposits made to, and net613
investment earnings of, a medical savings account during the614
taxable year, in accordance with section 3924.66 of the Revised615
Code. The deduction allowed by division (A)(14) of this section616
does not apply to medical savings account deposits and earnings617
otherwise deducted or excluded for the current or any other618
taxable year from the taxpayer's federal adjusted gross income.619

       (15)(a) Add an amount equal to the funds withdrawn from a620
medical savings account during the taxable year, and the net621
investment earnings on those funds, when the funds withdrawn were622
used for any purpose other than to reimburse an account holder623
for, or to pay, eligible medical expenses, in accordance with624
section 3924.66 of the Revised Code;625

       (b) Add the amounts distributed from a medical savings626
account under division (A)(2) of section 3924.68 of the Revised627
Code during the taxable year.628

       (16) Add any amount claimed as a credit under section629
5747.059 of the Revised Code to the extent that such amount630
satisfies either of the following:631

       (a) The amount was deducted or excluded from the computation632
of the taxpayer's federal adjusted gross income as required to be633
reported for the taxpayer's taxable year under the Internal634
Revenue Code;635

       (b) The amount resulted in a reduction of the taxpayer's636
federal adjusted gross income as required to be reported for any637
of the taxpayer's taxable years under the Internal Revenue Code.638

       (17) Deduct the amount contributed by the taxpayer to an639
individual development account program established by a county640
department of job and family services pursuant to sections 329.11641
to 329.14 of the Revised Code for the purpose of matching funds642
deposited by program participants. On request of the tax643
commissioner, the taxpayer shall provide any information that, in644
the tax commissioner's opinion, is necessary to establish the645
amount deducted under division (A)(17) of this section.646

       (18) Beginning in taxable year 2001 but not for any taxable 647
year beginning after December 31, 2005, if the taxpayer is married648
and files a joint return and the combined federal adjusted gross 649
income of the taxpayer and the taxpayer's spouse for the taxable 650
year does not exceed one hundred thousand dollars, or if the 651
taxpayer is single and has a federal adjusted gross income for the652
taxable year not exceeding fifty thousand dollars, deduct amounts 653
paid during the taxable year for qualified tuition and fees paid 654
to an eligible institution for the taxpayer, the taxpayer's 655
spouse, or any dependent of the taxpayer, who is a resident of 656
this state and is enrolled in or attending a program that657
culminates in a degree or diploma at an eligible institution. The 658
deduction may be claimed only to the extent that qualified tuition 659
and fees are not otherwise deducted or excluded for any taxable 660
year from federal or Ohio adjusted gross income. The deduction may 661
not be claimed for educational expenses for which the taxpayer 662
claims a credit under section 5747.27 of the Revised Code.663

       (19) Add any reimbursement received during the taxable year664
of any amount the taxpayer deducted under division (A)(18) of this665
section in any previous taxable year to the extent the amount is666
not otherwise included in Ohio adjusted gross income.667

       (20)(a)(i) Add five-sixths of the amount of depreciation668
expense allowed by subsection (k) of section 168 of the Internal669
Revenue Code, including the taxpayer's proportionate or670
distributive share of the amount of depreciation expense allowed671
by that subsection to a pass-through entity in which the taxpayer672
has a direct or indirect ownership interest.673

       (ii) Add five-sixths of the amount of qualifying section 179 674
depreciation expense, including a person's proportionate or 675
distributive share of the amount of qualifying section 179 676
depreciation expense allowed to any pass-through entity in which 677
the person has a direct or indirect ownership. For the purposes of 678
this division, "qualifying section 179 depreciation expense" means 679
the difference between (I) the amount of depreciation expense 680
directly or indirectly allowed to the taxpayer under section 179 681
of the Internal Revenue Code, and (II) the amount of depreciation 682
expense directly or indirectly allowed to the taxpayer under 683
section 179 of the Internal Revenue Code as that section existed 684
on December 31, 2002.685

       The tax commissioner, under procedures established by the 686
commissioner, may waive the add-backs related to a pass-through 687
entity if the taxpayer owns, directly or indirectly, less than 688
five per cent of the pass-through entity.689

       (b) Nothing in division (A)(20) of this section shall be690
construed to adjust or modify the adjusted basis of any asset.691

       (c) To the extent the add-back required under division692
(A)(20)(a) of this section is attributable to property generating693
nonbusiness income or loss allocated under section 5747.20 of the694
Revised Code, the add-back shall be sitused to the same location695
as the nonbusiness income or loss generated by the property for696
the purpose of determining the credit under division (A) of697
section 5747.05 of the Revised Code. Otherwise, the add-back shall 698
be apportioned, subject to one or more of the four alternative 699
methods of apportionment enumerated in section 5747.21 of the 700
Revised Code.701

       (d) For the purposes of division (A) of this section, net 702
operating loss carryback and carryforward shall not include 703
five-sixths of the allowance of any net operating loss deduction 704
carryback or carryforward to the taxable year to the extent such 705
loss resulted from depreciation allowed by section 168(k) of the 706
Internal Revenue Code and by the qualifying section 179 707
depreciation expense amount.708

       (21)(a) If the taxpayer was required to add an amount under709
division (A)(20)(a) of this section for a taxable year, deduct710
one-fifth of the amount so added for each of the five succeeding711
taxable years.712

       (b) If the amount deducted under division (A)(21)(a) of this713
section is attributable to an add-back allocated under division714
(A)(20)(c) of this section, the amount deducted shall be sitused715
to the same location. Otherwise, the add-back shall be apportioned 716
using the apportionment factors for the taxable year in which the 717
deduction is taken, subject to one or more of the four alternative 718
methods of apportionment enumerated in section 5747.21 of the 719
Revised Code.720

       (c) No deduction is available under division (A)(21)(a) of 721
this section with regard to any depreciation allowed by section 722
168(k) of the Internal Revenue Code and by the qualifying section 723
179 depreciation expense amount to the extent that such 724
depreciation resulted in or increased a federal net operating loss 725
carryback or carryforward to a taxable year to which division 726
(A)(20)(d) of this section does not apply.727

       (22) Deduct, to the extent not otherwise deducted or excluded 728
in computing federal or Ohio adjusted gross income for the taxable 729
year, the amount the taxpayer received during the taxable year as 730
reimbursement for life insurance premiums under section 5919.31 of 731
the Revised Code.732

        (23) Deduct, to the extent not otherwise deducted or excluded 733
in computing federal or Ohio adjusted gross income for the taxable 734
year, the amount the taxpayer received during the taxable year as 735
a death benefit paid by the adjutant general under section 5919.33 736
of the Revised Code.737

       (24) Deduct, to the extent included in federal adjusted gross 738
income and not otherwise allowable as a deduction or exclusion in 739
computing federal or Ohio adjusted gross income for the taxable 740
year, military pay and allowances received by the taxpayer during 741
the taxable year for active duty service in the United States 742
army, air force, navy, marine corps, or coast guard or reserve 743
components thereof or the national guard. The deduction may not be 744
claimed for military pay and allowances received by the taxpayer 745
while the taxpayer is stationed in this state.746

       (25) Deduct, to the extent not otherwise allowable as a 747
deduction or exclusion in computing federal or Ohio adjusted gross 748
income for the taxable year and not otherwise compensated for by 749
any other source, the amount of qualified organ donation expenses 750
incurred by the taxpayer during the taxable year, not to exceed 751
ten thousand dollars. A taxpayer may deduct qualified organ 752
donation expenses only once for all taxable years beginning with 753
taxable years beginning in 2007.754

       For the purposes of division (A)(25) of this section:755

        (a) "Human organ" means all or any portion of a human liver, 756
pancreas, kidney, intestine, or lung, and any portion of human 757
bone marrow.758

        (b) "Qualified organ donation expenses" means travel 759
expenses, lodging expenses, and wages and salary forgone by a 760
taxpayer in connection with the taxpayer's donation, while living, 761
of one or more of the taxpayer's human organs to another human 762
being.763

       (26) Deduct, to the extent not otherwise deducted or excluded 764
in computing federal or Ohio adjusted gross income for the taxable 765
year, amounts received by the taxpayer as retired military 766
personnel pay for service in the United States army, navy, air 767
force, coast guard, or marine corps or reserve components thereof, 768
or the national guard, or received by the surviving spouse or 769
former spouse of such a taxpayer under the survivor benefit plan 770
on account of such a taxpayer's death. If the taxpayer receives 771
income on account of retirement paid under the federal civil 772
service retirement system or federal employees retirement system, 773
or under any successor retirement program enacted by the congress 774
of the United States that is established and maintained for 775
retired employees of the United States government, and such 776
retirement income is based, in whole or in part, on credit for 777
the taxpayer's military service, the deduction allowed under this 778
division shall include only that portion of such retirement 779
income that is attributable to the taxpayer's military service, 780
to the extent that portion of such retirement income is otherwise 781
included in federal adjusted gross income and is not otherwise 782
deducted under this section. Any amount deducted under division 783
(A)(26) of this section is not included in a taxpayer's 784
adjusted gross income for the purposes of section 5747.055 of 785
the Revised Code. No amount may be deducted under division 786
(A)(26) of this section on the basis of which a credit was 787
claimed under section 5747.055 of the Revised Code.788

       (27) Deduct, to the extent not otherwise deducted or excluded 789
in computing federal or Ohio adjusted gross income for the taxable 790
year, the amount the taxpayer received during the taxable year 791
from the military injury relief fund created in section 5101.98 of 792
the Revised Code.793

       (B) "Business income" means income, including gain or loss,794
arising from transactions, activities, and sources in the regular795
course of a trade or business and includes income, gain, or loss796
from real property, tangible property, and intangible property if797
the acquisition, rental, management, and disposition of the798
property constitute integral parts of the regular course of a799
trade or business operation. "Business income" includes income,800
including gain or loss, from a partial or complete liquidation of801
a business, including, but not limited to, gain or loss from the802
sale or other disposition of goodwill.803

       (C) "Nonbusiness income" means all income other than business 804
income and may include, but is not limited to, compensation, rents 805
and royalties from real or tangible personal property, capital 806
gains, interest, dividends and distributions, patent or copyright 807
royalties, or lottery winnings, prizes, and awards.808

       (D) "Compensation" means any form of remuneration paid to an809
employee for personal services.810

       (E) "Fiduciary" means a guardian, trustee, executor,811
administrator, receiver, conservator, or any other person acting812
in any fiduciary capacity for any individual, trust, or estate.813

       (F) "Fiscal year" means an accounting period of twelve months 814
ending on the last day of any month other than December.815

       (G) "Individual" means any natural person.816

       (H) "Internal Revenue Code" means the "Internal Revenue Code817
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.818

       (I) "Resident" means any of the following, provided that819
division (I)(3) of this section applies only to taxable years of a820
trust beginning in 2002 or thereafter:821

       (1) An individual who is domiciled in this state, subject to822
section 5747.24 of the Revised Code;823

       (2) The estate of a decedent who at the time of death was824
domiciled in this state. The domicile tests of section 5747.24 of825
the Revised Code are not controlling for purposes of division 826
(I)(2) of this section.827

       (3) A trust that, in whole or part, resides in this state. If828
only part of a trust resides in this state, the trust is a829
resident only with respect to that part.830

       For the purposes of division (I)(3) of this section:831

       (a) A trust resides in this state for the trust's current832
taxable year to the extent, as described in division (I)(3)(d) of833
this section, that the trust consists directly or indirectly, in 834
whole or in part, of assets, net of any related liabilities, that 835
were transferred, or caused to be transferred, directly or 836
indirectly, to the trust by any of the following:837

        (i) A person, a court, or a governmental entity or 838
instrumentality on account of the death of a decedent, but only if 839
the trust is described in division (I)(3)(e)(i) or (ii) of this 840
section;841

       (ii) A person who was domiciled in this state for the 842
purposes of this chapter when the person directly or indirectly 843
transferred assets to an irrevocable trust, but only if at least 844
one of the trust's qualifying beneficiaries is domiciled in this 845
state for the purposes of this chapter during all or some portion 846
of the trust's current taxable year;847

       (iii) A person who was domiciled in this state for the848
purposes of this chapter when the trust document or instrument or849
part of the trust document or instrument became irrevocable, but850
only if at least one of the trust's qualifying beneficiaries is a 851
resident domiciled in this state for the purposes of this chapter852
during all or some portion of the trust's current taxable year. If 853
a trust document or instrument became irrevocable upon the death 854
of a person who at the time of death was domiciled in this state 855
for purposes of this chapter, that person is a person described in 856
division (I)(3)(a)(iii) of this section.857

        (b) A trust is irrevocable to the extent that the transferor 858
is not considered to be the owner of the net assets of the trust 859
under sections 671 to 678 of the Internal Revenue Code.860

       (c) With respect to a trust other than a charitable lead861
trust, "qualifying beneficiary" has the same meaning as "potential862
current beneficiary" as defined in section 1361(e)(2) of the863
Internal Revenue Code, and with respect to a charitable lead trust864
"qualifying beneficiary" is any current, future, or contingent865
beneficiary, but with respect to any trust "qualifying866
beneficiary" excludes a person or a governmental entity or867
instrumentality to any of which a contribution would qualify for868
the charitable deduction under section 170 of the Internal Revenue869
Code.870

        (d) For the purposes of division (I)(3)(a) of this section,871
the extent to which a trust consists directly or indirectly, in872
whole or in part, of assets, net of any related liabilities, that873
were transferred directly or indirectly, in whole or part, to the874
trust by any of the sources enumerated in that division shall be875
ascertained by multiplying the fair market value of the trust's876
assets, net of related liabilities, by the qualifying ratio, which877
shall be computed as follows:878

        (i) The first time the trust receives assets, the numerator879
of the qualifying ratio is the fair market value of those assets880
at that time, net of any related liabilities, from sources881
enumerated in division (I)(3)(a) of this section. The denominator882
of the qualifying ratio is the fair market value of all the883
trust's assets at that time, net of any related liabilities.884

        (ii) Each subsequent time the trust receives assets, a885
revised qualifying ratio shall be computed. The numerator of the886
revised qualifying ratio is the sum of (1) the fair market value887
of the trust's assets immediately prior to the subsequent888
transfer, net of any related liabilities, multiplied by the889
qualifying ratio last computed without regard to the subsequent890
transfer, and (2) the fair market value of the subsequently891
transferred assets at the time transferred, net of any related892
liabilities, from sources enumerated in division (I)(3)(a) of this893
section. The denominator of the revised qualifying ratio is the894
fair market value of all the trust's assets immediately after the895
subsequent transfer, net of any related liabilities.896

       (iii) Whether a transfer to the trust is by or from any of 897
the sources enumerated in division (I)(3)(a) of this section shall 898
be ascertained without regard to the domicile of the trust's 899
beneficiaries.900

        (e) For the purposes of division (I)(3)(a)(i) of this901
section:902

        (i) A trust is described in division (I)(3)(e)(i) of this903
section if the trust is a testamentary trust and the testator of904
that testamentary trust was domiciled in this state at the time of905
the testator's death for purposes of the taxes levied under906
Chapter 5731. of the Revised Code.907

        (ii) A trust is described in division (I)(3)(e)(ii) of this908
section if the transfer is a qualifying transfer described in any909
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an910
irrevocable inter vivos trust, and at least one of the trust's911
qualifying beneficiaries is domiciled in this state for purposes912
of this chapter during all or some portion of the trust's current913
taxable year.914

        (f) For the purposes of division (I)(3)(e)(ii) of this915
section, a "qualifying transfer" is a transfer of assets, net of916
any related liabilities, directly or indirectly to a trust, if the917
transfer is described in any of the following:918

        (i) The transfer is made to a trust, created by the decedent 919
before the decedent's death and while the decedent was domiciled 920
in this state for the purposes of this chapter, and, prior to the 921
death of the decedent, the trust became irrevocable while the 922
decedent was domiciled in this state for the purposes of this 923
chapter.924

        (ii) The transfer is made to a trust to which the decedent,925
prior to the decedent's death, had directly or indirectly926
transferred assets, net of any related liabilities, while the927
decedent was domiciled in this state for the purposes of this928
chapter, and prior to the death of the decedent the trust became929
irrevocable while the decedent was domiciled in this state for the930
purposes of this chapter.931

        (iii) The transfer is made on account of a contractual932
relationship existing directly or indirectly between the933
transferor and either the decedent or the estate of the decedent934
at any time prior to the date of the decedent's death, and the935
decedent was domiciled in this state at the time of death for936
purposes of the taxes levied under Chapter 5731. of the Revised937
Code.938

        (iv) The transfer is made to a trust on account of a939
contractual relationship existing directly or indirectly between940
the transferor and another person who at the time of the941
decedent's death was domiciled in this state for purposes of this942
chapter.943

        (v) The transfer is made to a trust on account of the will of 944
a testator who was domiciled in this state at the time of the 945
testator's death for purposes of the taxes levied under Chapter 946
5731. of the Revised Code.947

        (vi) The transfer is made to a trust created by or caused to 948
be created by a court, and the trust was directly or indirectly949
created in connection with or as a result of the death of an950
individual who, for purposes of the taxes levied under Chapter951
5731. of the Revised Code, was domiciled in this state at the time952
of the individual's death.953

       (g) The tax commissioner may adopt rules to ascertain the954
part of a trust residing in this state.955

       (J) "Nonresident" means an individual or estate that is not a 956
resident. An individual who is a resident for only part of a957
taxable year is a nonresident for the remainder of that taxable958
year.959

       (K) "Pass-through entity" has the same meaning as in section960
5733.04 of the Revised Code.961

       (L) "Return" means the notifications and reports required to962
be filed pursuant to this chapter for the purpose of reporting the963
tax due and includes declarations of estimated tax when so964
required.965

       (M) "Taxable year" means the calendar year or the taxpayer's966
fiscal year ending during the calendar year, or fractional part967
thereof, upon which the adjusted gross income is calculated968
pursuant to this chapter.969

       (N) "Taxpayer" means any person subject to the tax imposed by 970
section 5747.02 of the Revised Code or any pass-through entity971
that makes the election under division (D) of section 5747.08 of972
the Revised Code.973

       (O) "Dependents" means dependents as defined in the Internal974
Revenue Code and as claimed in the taxpayer's federal income tax975
return for the taxable year or which the taxpayer would have been976
permitted to claim had the taxpayer filed a federal income tax977
return.978

       (P) "Principal county of employment" means, in the case of a979
nonresident, the county within the state in which a taxpayer980
performs services for an employer or, if those services are981
performed in more than one county, the county in which the major982
portion of the services are performed.983

       (Q) As used in sections 5747.50 to 5747.55 of the Revised984
Code:985

       (1) "Subdivision" means any county, municipal corporation,986
park district, or township.987

       (2) "Essential local government purposes" includes all988
functions that any subdivision is required by general law to989
exercise, including like functions that are exercised under a990
charter adopted pursuant to the Ohio Constitution.991

       (R) "Overpayment" means any amount already paid that exceeds992
the figure determined to be the correct amount of the tax.993

       (S) "Taxable income" or "Ohio taxable income" applies only to 994
estates and trusts, and means federal taxable income, as defined 995
and used in the Internal Revenue Code, adjusted as follows:996

       (1) Add interest or dividends, net of ordinary, necessary,997
and reasonable expenses not deducted in computing federal taxable998
income, on obligations or securities of any state or of any999
political subdivision or authority of any state, other than this1000
state and its subdivisions and authorities, but only to the extent 1001
that such net amount is not otherwise includible in Ohio taxable 1002
income and is described in either division (S)(1)(a) or (b) of 1003
this section:1004

        (a) The net amount is not attributable to the S portion of an 1005
electing small business trust and has not been distributed to1006
beneficiaries for the taxable year;1007

        (b) The net amount is attributable to the S portion of an1008
electing small business trust for the taxable year.1009

       (2) Add interest or dividends, net of ordinary, necessary,1010
and reasonable expenses not deducted in computing federal taxable1011
income, on obligations of any authority, commission,1012
instrumentality, territory, or possession of the United States to1013
the extent that the interest or dividends are exempt from federal1014
income taxes but not from state income taxes, but only to the1015
extent that such net amount is not otherwise includible in Ohio1016
taxable income and is described in either division (S)(1)(a) or1017
(b) of this section;1018

       (3) Add the amount of personal exemption allowed to the1019
estate pursuant to section 642(b) of the Internal Revenue Code;1020

       (4) Deduct interest or dividends, net of related expenses1021
deducted in computing federal taxable income, on obligations of1022
the United States and its territories and possessions or of any1023
authority, commission, or instrumentality of the United States to1024
the extent that the interest or dividends are exempt from state1025
taxes under the laws of the United States, but only to the extent1026
that such amount is included in federal taxable income and is1027
described in either division (S)(1)(a) or (b) of this section;1028

       (5) Deduct the amount of wages and salaries, if any, not1029
otherwise allowable as a deduction but that would have been1030
allowable as a deduction in computing federal taxable income for1031
the taxable year, had the targeted jobs credit allowed under1032
sections 38, 51, and 52 of the Internal Revenue Code not been in1033
effect, but only to the extent such amount relates either to1034
income included in federal taxable income for the taxable year or1035
to income of the S portion of an electing small business trust for1036
the taxable year;1037

       (6) Deduct any interest or interest equivalent, net of1038
related expenses deducted in computing federal taxable income, on1039
public obligations and purchase obligations, but only to the1040
extent that such net amount relates either to income included in1041
federal taxable income for the taxable year or to income of the S1042
portion of an electing small business trust for the taxable year;1043

       (7) Add any loss or deduct any gain resulting from sale,1044
exchange, or other disposition of public obligations to the extent1045
that such loss has been deducted or such gain has been included in1046
computing either federal taxable income or income of the S portion1047
of an electing small business trust for the taxable year;1048

       (8) Except in the case of the final return of an estate, add1049
any amount deducted by the taxpayer on both its Ohio estate tax1050
return pursuant to section 5731.14 of the Revised Code, and on its1051
federal income tax return in determining federal taxable income;1052

       (9)(a) Deduct any amount included in federal taxable income1053
solely because the amount represents a reimbursement or refund of1054
expenses that in a previous year the decedent had deducted as an1055
itemized deduction pursuant to section 63 of the Internal Revenue1056
Code and applicable treasury regulations. The deduction otherwise1057
allowed under division (S)(9)(a) of this section shall be reduced1058
to the extent the reimbursement is attributable to an amount the1059
taxpayer or decedent deducted under this section in any taxable1060
year.1061

       (b) Add any amount not otherwise included in Ohio taxable1062
income for any taxable year to the extent that the amount is1063
attributable to the recovery during the taxable year of any amount1064
deducted or excluded in computing federal or Ohio taxable income1065
in any taxable year, but only to the extent such amount has not1066
been distributed to beneficiaries for the taxable year.1067

       (10) Deduct any portion of the deduction described in section 1068
1341(a)(2) of the Internal Revenue Code, for repaying previously 1069
reported income received under a claim of right, that meets both 1070
of the following requirements:1071

       (a) It is allowable for repayment of an item that was1072
included in the taxpayer's taxable income or the decedent's1073
adjusted gross income for a prior taxable year and did not qualify1074
for a credit under division (A) or (B) of section 5747.05 of the1075
Revised Code for that year.1076

       (b) It does not otherwise reduce the taxpayer's taxable1077
income or the decedent's adjusted gross income for the current or1078
any other taxable year.1079

       (11) Add any amount claimed as a credit under section1080
5747.059 of the Revised Code to the extent that the amount1081
satisfies either of the following:1082

       (a) The amount was deducted or excluded from the computation1083
of the taxpayer's federal taxable income as required to be1084
reported for the taxpayer's taxable year under the Internal1085
Revenue Code;1086

       (b) The amount resulted in a reduction in the taxpayer's1087
federal taxable income as required to be reported for any of the1088
taxpayer's taxable years under the Internal Revenue Code.1089

       (12) Deduct any amount, net of related expenses deducted in1090
computing federal taxable income, that a trust is required to1091
report as farm income on its federal income tax return, but only1092
if the assets of the trust include at least ten acres of land1093
satisfying the definition of "land devoted exclusively to1094
agricultural use" under section 5713.30 of the Revised Code,1095
regardless of whether the land is valued for tax purposes as such1096
land under sections 5713.30 to 5713.38 of the Revised Code. If the1097
trust is a pass-through entity investor, section 5747.231 of the1098
Revised Code applies in ascertaining if the trust is eligible to1099
claim the deduction provided by division (S)(12) of this section1100
in connection with the pass-through entity's farm income.1101

        Except for farm income attributable to the S portion of an1102
electing small business trust, the deduction provided by division1103
(S)(12) of this section is allowed only to the extent that the1104
trust has not distributed such farm income. Division (S)(12) of1105
this section applies only to taxable years of a trust beginning in1106
2002 or thereafter.1107

       (13) Add the net amount of income described in section 641(c)1108
of the Internal Revenue Code to the extent that amount is not1109
included in federal taxable income.1110

       (14) Add or deduct the amount the taxpayer would be required1111
to add or deduct under division (A)(20) or (21) of this section if1112
the taxpayer's Ohio taxable income were computed in the same1113
manner as an individual's Ohio adjusted gross income is computed1114
under this section. In the case of a trust, division (S)(14) of1115
this section applies only to any of the trust's taxable years1116
beginning in 2002 or thereafter.1117

       (T) "School district income" and "school district income tax" 1118
have the same meanings as in section 5748.01 of the Revised Code.1119

       (U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)1120
of this section, "public obligations," "purchase obligations," and1121
"interest or interest equivalent" have the same meanings as in1122
section 5709.76 of the Revised Code.1123

       (V) "Limited liability company" means any limited liability1124
company formed under Chapter 1705. of the Revised Code or under1125
the laws of any other state.1126

       (W) "Pass-through entity investor" means any person who,1127
during any portion of a taxable year of a pass-through entity, is1128
a partner, member, shareholder, or equity investor in that1129
pass-through entity.1130

       (X) "Banking day" has the same meaning as in section 1304.011131
of the Revised Code.1132

       (Y) "Month" means a calendar month.1133

       (Z) "Quarter" means the first three months, the second three1134
months, the third three months, or the last three months of the1135
taxpayer's taxable year.1136

       (AA)(1) "Eligible institution" means a state university or1137
state institution of higher education as defined in section1138
3345.011 of the Revised Code, or a private, nonprofit college,1139
university, or other post-secondary institution located in this1140
state that possesses a certificate of authorization issued by the1141
Ohio board of regents pursuant to Chapter 1713. of the Revised1142
Code or a certificate of registration issued by the state board of1143
career colleges and schools under Chapter 3332. of the Revised1144
Code.1145

       (2) "Qualified tuition and fees" means tuition and fees1146
imposed by an eligible institution as a condition of enrollment or1147
attendance, not exceeding two thousand five hundred dollars in1148
each of the individual's first two years of post-secondary1149
education. If the individual is a part-time student, "qualified1150
tuition and fees" includes tuition and fees paid for the academic1151
equivalent of the first two years of post-secondary education1152
during a maximum of five taxable years, not exceeding a total of1153
five thousand dollars. "Qualified tuition and fees" does not1154
include:1155

       (a) Expenses for any course or activity involving sports,1156
games, or hobbies unless the course or activity is part of the1157
individual's degree or diploma program;1158

       (b) The cost of books, room and board, student activity fees,1159
athletic fees, insurance expenses, or other expenses unrelated to 1160
the individual's academic course of instruction;1161

       (c) Tuition, fees, or other expenses paid or reimbursed1162
through an employer, scholarship, grant in aid, or other1163
educational benefit program.1164

       (BB)(1) "Modified business income" means the business income1165
included in a trust's Ohio taxable income after such taxable1166
income is first reduced by the qualifying trust amount, if any.1167

       (2) "Qualifying trust amount" of a trust means capital gains1168
and losses from the sale, exchange, or other disposition of equity1169
or ownership interests in, or debt obligations of, a qualifying1170
investee to the extent included in the trust's Ohio taxable 1171
income, but only if the following requirements are satisfied:1172

        (a) The book value of the qualifying investee's physical 1173
assets in this state and everywhere, as of the last day of the 1174
qualifying investee's fiscal or calendar year ending immediately 1175
prior to the date on which the trust recognizes the gain or loss, 1176
is available to the trust.1177

       (b) The requirements of section 5747.011 of the Revised Code1178
are satisfied for the trust's taxable year in which the trust1179
recognizes the gain or loss.1180

        Any gain or loss that is not a qualifying trust amount is1181
modified business income, qualifying investment income, or1182
modified nonbusiness income, as the case may be.1183

       (3) "Modified nonbusiness income" means a trust's Ohio1184
taxable income other than modified business income, other than the1185
qualifying trust amount, and other than qualifying investment1186
income, as defined in section 5747.012 of the Revised Code, to the1187
extent such qualifying investment income is not otherwise part of1188
modified business income.1189

       (4) "Modified Ohio taxable income" applies only to trusts,1190
and means the sum of the amounts described in divisions (BB)(4)(a) 1191
to (c) of this section:1192

       (a) The fraction, calculated under section 5747.013, and 1193
applying section 5747.231 of the Revised Code, multiplied by the 1194
sum of the following amounts:1195

        (i) The trust's modified business income;1196

        (ii) The trust's qualifying investment income, as defined in 1197
section 5747.012 of the Revised Code, but only to the extent the 1198
qualifying investment income does not otherwise constitute1199
modified business income and does not otherwise constitute a1200
qualifying trust amount.1201

       (b) The qualifying trust amount multiplied by a fraction, the 1202
numerator of which is the sum of the book value of the qualifying 1203
investee's physical assets in this state on the last day of the 1204
qualifying investee's fiscal or calendar year ending immediately 1205
prior to the day on which the trust recognizes the qualifying 1206
trust amount, and the denominator of which is the sum of the book 1207
value of the qualifying investee's total physical assets 1208
everywhere on the last day of the qualifying investee's fiscal or 1209
calendar year ending immediately prior to the day on which the 1210
trust recognizes the qualifying trust amount. If, for a taxable 1211
year, the trust recognizes a qualifying trust amount with respect 1212
to more than one qualifying investee, the amount described in 1213
division (BB)(4)(b) of this section shall equal the sum of the1214
products so computed for each such qualifying investee.1215

       (c)(i) With respect to a trust or portion of a trust that is 1216
a resident as ascertained in accordance with division (I)(3)(d) of 1217
this section, its modified nonbusiness income.1218

        (ii) With respect to a trust or portion of a trust that is1219
not a resident as ascertained in accordance with division1220
(I)(3)(d) of this section, the amount of its modified nonbusiness1221
income satisfying the descriptions in divisions (B)(2) to (5) of1222
section 5747.20 of the Revised Code, except as otherwise provided 1223
in division (BB)(4)(c)(ii) of this section. With respect to a 1224
trust or portion of a trust that is not a resident as ascertained 1225
in accordance with division (I)(3)(d) of this section, the trust's 1226
portion of modified nonbusiness income recognized from the sale, 1227
exchange, or other disposition of a debt interest in or equity 1228
interest in a section 5747.212 entity, as defined in section 1229
5747.212 of the Revised Code, without regard to division (A) of 1230
that section, shall not be allocated to this state in accordance 1231
with section 5747.20 of the Revised Code but shall be apportioned 1232
to this state in accordance with division (B) of section 5747.212 1233
of the Revised Code without regard to division (A) of that 1234
section.1235

       If the allocation and apportionment of a trust's income under1236
divisions (BB)(4)(a) and (c) of this section do not fairly1237
represent the modified Ohio taxable income of the trust in this1238
state, the alternative methods described in division (C) of1239
section 5747.21 of the Revised Code may be applied in the manner1240
and to the same extent provided in that section.1241

       (5)(a) Except as set forth in division (BB)(5)(b) of this 1242
section, "qualifying investee" means a person in which a trust has 1243
an equity or ownership interest, or a person or unit of government 1244
the debt obligations of either of which are owned by a trust. For 1245
the purposes of division (BB)(2)(a) of this section and for the 1246
purpose of computing the fraction described in division (BB)(4)(b) 1247
of this section, all of the following apply:1248

        (i) If the qualifying investee is a member of a qualifying1249
controlled group on the last day of the qualifying investee's1250
fiscal or calendar year ending immediately prior to the date on1251
which the trust recognizes the gain or loss, then "qualifying1252
investee" includes all persons in the qualifying controlled group1253
on such last day.1254

        (ii) If the qualifying investee, or if the qualifying1255
investee and any members of the qualifying controlled group of1256
which the qualifying investee is a member on the last day of the1257
qualifying investee's fiscal or calendar year ending immediately1258
prior to the date on which the trust recognizes the gain or loss,1259
separately or cumulatively own, directly or indirectly, on the1260
last day of the qualifying investee's fiscal or calendar year1261
ending immediately prior to the date on which the trust recognizes1262
the qualifying trust amount, more than fifty per cent of the1263
equity of a pass-through entity, then the qualifying investee and1264
the other members are deemed to own the proportionate share of the1265
pass-through entity's physical assets which the pass-through1266
entity directly or indirectly owns on the last day of the1267
pass-through entity's calendar or fiscal year ending within or1268
with the last day of the qualifying investee's fiscal or calendar1269
year ending immediately prior to the date on which the trust1270
recognizes the qualifying trust amount.1271

        (iii) For the purposes of division (BB)(5)(a)(iii) of this1272
section, "upper level pass-through entity" means a pass-through1273
entity directly or indirectly owning any equity of another1274
pass-through entity, and "lower level pass-through entity" means1275
that other pass-through entity.1276

        An upper level pass-through entity, whether or not it is also 1277
a qualifying investee, is deemed to own, on the last day of the 1278
upper level pass-through entity's calendar or fiscal year, the1279
proportionate share of the lower level pass-through entity's1280
physical assets that the lower level pass-through entity directly1281
or indirectly owns on the last day of the lower level pass-through1282
entity's calendar or fiscal year ending within or with the last1283
day of the upper level pass-through entity's fiscal or calendar1284
year. If the upper level pass-through entity directly and1285
indirectly owns less than fifty per cent of the equity of the1286
lower level pass-through entity on each day of the upper level1287
pass-through entity's calendar or fiscal year in which or with1288
which ends the calendar or fiscal year of the lower level1289
pass-through entity and if, based upon clear and convincing1290
evidence, complete information about the location and cost of the1291
physical assets of the lower pass-through entity is not available1292
to the upper level pass-through entity, then solely for purposes1293
of ascertaining if a gain or loss constitutes a qualifying trust1294
amount, the upper level pass-through entity shall be deemed as1295
owning no equity of the lower level pass-through entity for each1296
day during the upper level pass-through entity's calendar or1297
fiscal year in which or with which ends the lower level1298
pass-through entity's calendar or fiscal year. Nothing in division 1299
(BB)(5)(a)(iii) of this section shall be construed to provide for 1300
any deduction or exclusion in computing any trust's Ohio taxable 1301
income.1302

       (b) With respect to a trust that is not a resident for the1303
taxable year and with respect to a part of a trust that is not a1304
resident for the taxable year, "qualifying investee" for that1305
taxable year does not include a C corporation if both of the1306
following apply:1307

       (i) During the taxable year the trust or part of the trust1308
recognizes a gain or loss from the sale, exchange, or other1309
disposition of equity or ownership interests in, or debt1310
obligations of, the C corporation.1311

       (ii) Such gain or loss constitutes nonbusiness income.1312

        (6) "Available" means information is such that a person is 1313
able to learn of the information by the due date plus extensions, 1314
if any, for filing the return for the taxable year in which the 1315
trust recognizes the gain or loss.1316

        (CC) "Qualifying controlled group" has the same meaning as in 1317
section 5733.04 of the Revised Code.1318

        (DD) "Related member" has the same meaning as in section1319
5733.042 of the Revised Code.1320

       (EE)(1) For the purposes of division (EE) of this section: 1321

       (a) "Qualifying person" means any person other than a 1322
qualifying corporation.1323

       (b) "Qualifying corporation" means any person classified for 1324
federal income tax purposes as an association taxable as a 1325
corporation, except either of the following:1326

       (i) A corporation that has made an election under subchapter 1327
S, chapter one, subtitle A, of the Internal Revenue Code for its 1328
taxable year ending within, or on the last day of, the investor's 1329
taxable year;1330

       (ii) A subsidiary that is wholly owned by any corporation 1331
that has made an election under subchapter S, chapter one, 1332
subtitle A of the Internal Revenue Code for its taxable year 1333
ending within, or on the last day of, the investor's taxable year.1334

       (2) For the purposes of this chapter, unless expressly stated 1335
otherwise, no qualifying person indirectly owns any asset directly 1336
or indirectly owned by any qualifying corporation.1337

       (FF) For purposes of this chapter and Chapter 5751. of the 1338
Revised Code:1339

       (1) "Trust" does not include a qualified pre-income tax 1340
trust.1341

       (2) A "qualified pre-income tax trust" is any pre-income tax 1342
trust that makes a qualifying pre-income tax trust election as 1343
described in division (FF)(3) of this section.1344

       (3) A "qualifying pre-income tax trust election" is an 1345
election by a pre-income tax trust to subject to the tax imposed 1346
by section 5751.02 of the Revised Code the pre-income tax trust 1347
and all pass-through entities of which the trust owns or 1348
controls, directly, indirectly, or constructively through related 1349
interests, five per cent or more of the ownership or equity 1350
interests. The trustee shall notify the tax commissioner in 1351
writing of the election on or before April 15, 2006. The 1352
election, if timely made, shall be effective on and after January 1353
1, 2006, and shall apply for all tax periods and tax years until 1354
revoked by the trustee of the trust.1355

       (4) A "pre-income tax trust" is a trust that satisfies all of 1356
the following requirements:1357

       (a) The document or instrument creating the trust was 1358
executed by the grantor before January 1, 1972;1359

       (b) The trust became irrevocable upon the creation of the 1360
trust; and1361

       (c) The grantor was domiciled in this state at the time the 1362
trust was created.1363

       Sec. 5815.31.  Unless the trust or separation agreement1364
provides otherwise, if, after executing a trust in which the1365
grantor reserves to self a power to alter, amend, revoke, or1366
terminate the provisions of the trust, a grantor is divorced, 1367
obtains a dissolution of marriage, has the grantor's marriage1368
annulled, or, upon actual separation from the grantor's spouse, 1369
enters into a separation agreement pursuant to which the parties 1370
intend to fully and finally settle their prospective property 1371
rights in the property of the other, whether by expected 1372
inheritance or otherwise, the spouse or former spouse of the 1373
grantor shall be deemed to have predeceased the grantor, and any 1374
provision in the trust conferring any beneficial interest or a 1375
general or special power of appointment on the spouse or former1376
spouse or nominating the spouse or former spouse as trustee or1377
trust advisor shall be revoked. If the grantor remarries the1378
grantor's former spouse or if the separation agreement is 1379
terminated, the spouse shall not be deemed to have predeceased the 1380
grantor, and any provision in the trust conferring any beneficial 1381
interest or a general or special power of appointment on the 1382
spouse or former spouse or nominating the spouse or former spouse 1383
as trustee or trust advisor shall not be revoked.1384

       Section 2. That existing sections 2101.16, 2107.76, 2109.21, 1385
2111.05, 2111.18, 2125.04, 2305.19, 5747.01, and 5815.31 of the 1386
Revised Code are hereby repealed.1387