As Passed by the Senate

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 



A BILL
To amend sections 2101.16, 2107.76, 2111.05, 2111.18, 1
2305.19, 5747.01, and 5815.31 of the Revised Code 2
to exclude from the application of the savings 3
statute certain estate and trust proceedings that 4
have limitation periods, to raise the threshold 5
amount for the termination or avoidance of 6
guardianships of small estates of wards, to raise 7
the threshold amount for the avoidance of 8
guardianship upon the settlement of claims of 9
minors or adult incompetents, and to clarify that 10
termination of marriage revokes any trust 11
provision conferring a beneficial interest on the 12
former spouse.13


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

       Section 1. That sections 2101.16, 2107.76, 2111.05, 2111.18, 14
2305.19, 5747.01, and 5815.31 of the Revised Code be amended to 15
read as follows:16

       Sec. 2101.16.  (A) Except as provided in section 2101.164 of 17
the Revised Code, the fees enumerated in this division shall be 18
charged and collected, if possible, by the probate judge and shall 19
be in full for all services rendered in the respective20
proceedings:21

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

       (B)(1) In relation to an application for the appointment of a182
guardian or the review of a report of a guardian under section183
2111.49 of the Revised Code, the probate court, pursuant to court184
order or in accordance with a court rule, may direct that the185
applicant or the estate pay any or all of the expenses of an186
investigation conducted pursuant to section 2111.041 or division187
(A)(2) of section 2111.49 of the Revised Code. If the188
investigation is conducted by a public employee or investigator189
who is paid by the county, the fees for the investigation shall be 190
paid into the county treasury. If the court finds that an alleged 191
incompetent or a ward is indigent, the court may waive the costs, 192
fees, and expenses of an investigation.193

       (2) In relation to the appointment or functioning of a 194
guardian for a minor or the guardianship of a minor, the probate 195
court may direct that the applicant or the estate pay any or all 196
of the expenses of an investigation conducted pursuant to section 197
2111.042 of the Revised Code. If the investigation is conducted by 198
a public employee or investigator who is paid by the county, the199
fees for the investigation shall be paid into the county treasury. 200
If the court finds that the guardian or applicant is indigent, the 201
court may waive the costs, fees, and expenses of an investigation.202

       (C) Thirty dollars of the thirty-five-dollar fee collected203
pursuant to division (A)(34) of this section and twenty dollars of 204
the sixty-dollar fee collected pursuant to division (A)(59) of 205
this section shall be deposited by the county treasurer in the 206
indigent guardianship fund created pursuant to section 2111.51 of 207
the Revised Code.208

       (D) The fees of witnesses, jurors, sheriffs, coroners, and209
constables for services rendered in the probate court or by order210
of the probate judge shall be the same as provided for like211
services in the court of common pleas.212

       (E) The probate court, by rule, may require an advance213
deposit for costs, not to exceed one hundred twenty-five dollars,214
at the time application is made for an appointment as executor or215
administrator or at the time a will is presented for probate.216

       (F) The probate court, by rule, shall establish a reasonable 217
fee, not to exceed fifty dollars, for the filing of a petition for 218
the release of information regarding an adopted person's name by 219
birth and the identity of the adopted person's biological parents 220
and biological siblings pursuant to section 3107.41 of the Revised 221
Code, all proceedings relative to the petition, the entry of an 222
order relative to the petition, and all services required to be 223
performed in connection with the petition. The probate court may 224
use a reasonable portion of a fee charged under authority of this 225
division to reimburse any agency, as defined in section 3107.39 of 226
the Revised Code, for any services it renders in performing a task 227
described in section 3107.41 of the Revised Code relative to or in 228
connection with the petition for which the fee was charged.229

       (G)(1) Thirty dollars of the fifty-dollar fee collected 230
pursuant to division (A)(3) of this section shall be deposited 231
into the "putative father registry fund," which is hereby created 232
in the state treasury. The department of job and family services 233
shall use the money in the fund to fund the department's costs of234
performing its duties related to the putative father registry 235
established under section 3107.062 of the Revised Code.236

       (2) If the department determines that money in the putative 237
father registry fund is more than is needed for its duties related 238
to the putative father registry, the department may use the 239
surplus moneys in the fund as permitted in division (C) of section 240
2151.3529, division (B) of section 2151.3530, or section 5103.155 241
of the Revised Code.242

       Sec. 2107.76. (A) No person who has received or waived the 243
right to receive the notice of the admission of a will to probate244
required by section 2107.19 of the Revised Code may commence an245
action permitted by section 2107.71 of the Revised Code to contest246
the validity of the will more than three months after the filing247
of the certificate described in division (A)(3) of section 2107.19248
of the Revised Code. No other person may commence an action 249
permitted by section 2107.71 of the Revised Code to contest the 250
validity of the will more than three months after the initial 251
filing of a certificate described in division (A)(3) of section 252
2107.19 of the Revised Code. A person under any legal disability253
nevertheless may commence an action permitted by section 2107.71254
of the Revised Code to contest the validity of the will within 255
three months after the disability is removed, but the rights saved256
shall not affect the rights of a purchaser, lessee, or257
encumbrancer for value in good faith and shall not impose any258
liability upon a fiduciary who has acted in good faith, or upon a259
person delivering or transferring property to any other person260
under authority of a will, whether or not the purchaser, lessee,261
encumbrancer, fiduciary, or other person had actual or262
constructive notice of the legal disability.263

       (B) Section 2305.19 of the Revised Code does not apply to an 264
action permitted by section 2107.71 of the Revised Code to contest 265
the validity of a will.266

       Sec. 2111.05.  When the whole estate of a ward, or of several 267
wards jointly, under the same guardianship, does not exceed ten268
twenty-five thousand dollars in value, the guardian may apply to269
the probate court for an order to terminate the guardianship. Upon 270
proof that it would be for the best interest of the ward to271
terminate the guardianship, the court may order the guardianship272
terminated, and direct the guardian, if the ward is a minor, to273
deposit the assets of the guardianship in a depository authorized274
to receive fiduciary funds, payable to the ward when hethe ward275
attains majority, or the court may authorize the delivery of the 276
assets to the natural guardian of the minor, to the person by whom 277
the minor is maintained, to the executive director of children278
services in the county, or to the minor himselfminor's own self.279

       If the ward is an incompetent, and the court orders the280
guardianship terminated, the court may authorize the deposit of281
the assets of the guardianship in a depository authorized to282
receive fiduciary funds in the name of a suitable person to be283
designated by the court, or if the assets do not consist of money, 284
the court may authorize delivery to a suitable person to be 285
designated by the court. The person receiving the assets shall 286
hold and dispose of them in the manner the court directs.287

       If the court refuses to grant the application to terminate288
the guardianship, or if no such application is presented to the289
court, the guardian only shall be required to render account upon290
the termination of histhe guardianship, upon order of the probate291
court made upon its own motion, or upon the order of the court292
made on the motion of a person interested in the wards or their293
property, for good cause shown, and set forth upon the journal of294
the court.295

       If the estate is tentwenty-five thousand dollars or less and 296
the ward is a minor, the court, without the appointment of a 297
guardian by the court, or the giving of bond, may authorize the 298
deposit in a depository authorized to receive fiduciary funds, 299
payable to the guardian when appointed, or to the ward when hethe 300
ward attains majority, or the court may authorize delivery to the 301
natural guardian of the minor, to the person by whom the minor is 302
maintained, to the executive director who is responsible for the 303
administration of children services in the county, or to the minor 304
himselfminor's own self.305

       If the whole estate of a person over eighteen years of age,306
who has been adjudged mentally ill or mentally retarded307
incompetent, does not exceed tentwenty-five thousand dollars in 308
value, the court, without the appointment of a guardian by the 309
court or the giving of bond, may authorize the deposit of the 310
estate in a depository authorized to receive fiduciary funds in 311
the name of a suitable person to be designated by the court, or if 312
the assets do not consist of money, the court may authorize 313
delivery to a suitable person to be designated by the court. The 314
person receiving the assets shall hold and dispose of them in the 315
manner the court directs.316

       Sec. 2111.18. WhenIf personal injury, damage to tangible or317
intangible property, or damage or loss on account of personal318
injury or damage to tangible or intangible property is caused to a 319
ward by wrongful act, neglect, or default that would entitle the 320
ward to maintain an action and recover damages for the injury, 321
damage, or loss, and when any ward is entitled to maintain an 322
action for damages or any other relief based on any claim or is 323
subject to any claim to recover damages or any other relief based 324
on any claim, the guardian of the estate of the ward may adjust 325
and settle the claim with the advice, approval, and consent of the 326
probate court. In the settlement, if the ward is a minor, the 327
parent or parents may waive all claim for damages on account of 328
loss of service of the minor, and that claim may be included in 329
the settlement. However, whenIf it is proposed that thea claim 330
involved be settled for tenthe net amount of twenty-five thousand 331
dollars or less after payment of fees and expenses as allowed by 332
the court, the court, upon application by any suitable person whom 333
the court may authorize to receive and receipt for the settlement, 334
may authorize the settlement without the appointment of a guardian335
and authorize the delivery of the moneys to the natural guardian336
of the minor, to the person by whom the minor is maintained, or to 337
the minor himselfas provided in section 2111.05 of the Revised 338
Code. The court may authorize the minor or person receiving the 339
moneys to execute a complete release on account of the receipt. 340
The payment shall be a complete and final discharge of any such341
that claim. In the settlement, if the ward is a minor, the parent 342
or parents of the minor may waive all claim for damages on account 343
of loss of service of the minor, and that claim may be included in 344
the settlement.345

       Sec. 2305.19. (A) In any action that is commenced or 346
attempted to be commenced, if in due time a judgment for the 347
plaintiff is reversed or if the plaintiff fails otherwise than 348
upon the merits, the plaintiff or, if the plaintiff dies and the 349
cause of action survives, the plaintiff's representative may 350
commence a new action within one year after the date of the 351
reversal of the judgment or the plaintiff's failure otherwise than 352
upon the merits or within the period of the original applicable 353
statute of limitations, whichever occurs later. This division 354
applies to any claim asserted in any pleading by a defendant. 355

       (B) If the defendant in an action described in division (A) 356
of this section is a foreign or domestic corporation, and whether 357
its charter prescribes the manner or place of service of process 358
on the defendant, and if it passes into the hands of a receiver 359
before the expiration of the one year period or the period of the 360
original applicable statute of limitations, whichever is 361
applicable, as described in that division, then service to be made 362
within one year following the original service or attempt to begin 363
the action may be made upon that receiver or the receiver's364
cashier, treasurer, secretary, clerk, or managing agent, or if 365
none of these officers can be found, by a copy left at the office 366
or the usual place of business of any of those agents or officers367
of the receiver with the person having charge of the office or 368
place of business. If that corporation is a railroad company, 369
summons may be served on any regular ticket or freight agent of 370
the receiver, and if there is no regular ticket or freight agent 371
of the receiver, then upon any conductor of the receiver, in any 372
county in the state in which the railroad is located. The summons 373
shall be returned as if served on that defendant corporation.374

       (C) This section does not apply to an action or proceeding 375
arising under section 2106.22, 2107.76, 2109.35, 2115.16, 5806.04, 376
or 5810.05 of the Revised Code.377

       Sec. 5747.01.  Except as otherwise expressly provided or378
clearly appearing from the context, any term used in this chapter 379
that is not otherwise defined in this section has the same meaning 380
as when used in a comparable context in the laws of the United381
States relating to federal income taxes or if not used in a 382
comparable context in those laws, has the same meaning as in 383
section 5733.40 of the Revised Code. Any reference in this chapter 384
to the Internal Revenue Code includes other laws of the United 385
States relating to federal income taxes.386

       As used in this chapter:387

       (A) "Adjusted gross income" or "Ohio adjusted gross income"388
means federal adjusted gross income, as defined and used in the389
Internal Revenue Code, adjusted as provided in this section:390

       (1) Add interest or dividends on obligations or securities of 391
any state or of any political subdivision or authority of any392
state, other than this state and its subdivisions and authorities.393

       (2) Add interest or dividends on obligations of any394
authority, commission, instrumentality, territory, or possession395
of the United States to the extent that the interest or dividends396
are exempt from federal income taxes but not from state income397
taxes.398

       (3) Deduct interest or dividends on obligations of the United 399
States and its territories and possessions or of any authority, 400
commission, or instrumentality of the United States to the extent401
that the interest or dividends are included in federal adjusted 402
gross income but exempt from state income taxes under the laws of 403
the United States.404

       (4) Deduct disability and survivor's benefits to the extent405
included in federal adjusted gross income.406

       (5) Deduct benefits under Title II of the Social Security Act 407
and tier 1 railroad retirement benefits to the extent included in 408
federal adjusted gross income under section 86 of the Internal409
Revenue Code.410

       (6) In the case of a taxpayer who is a beneficiary of a trust 411
that makes an accumulation distribution as defined in section 665 412
of the Internal Revenue Code, add, for the beneficiary's taxable 413
years beginning before 2002, the portion, if any, of such 414
distribution that does not exceed the undistributed net income of 415
the trust for the three taxable years preceding the taxable year 416
in which the distribution is made to the extent that the portion 417
was not included in the trust's taxable income for any of the 418
trust's taxable years beginning in 2002 or thereafter.419
"Undistributed net income of a trust" means the taxable income of420
the trust increased by (a)(i) the additions to adjusted gross421
income required under division (A) of this section and (ii) the422
personal exemptions allowed to the trust pursuant to section423
642(b) of the Internal Revenue Code, and decreased by (b)(i) the424
deductions to adjusted gross income required under division (A) of425
this section, (ii) the amount of federal income taxes attributable426
to such income, and (iii) the amount of taxable income that has427
been included in the adjusted gross income of a beneficiary by428
reason of a prior accumulation distribution. Any undistributed net429
income included in the adjusted gross income of a beneficiary430
shall reduce the undistributed net income of the trust commencing431
with the earliest years of the accumulation period.432

       (7) Deduct the amount of wages and salaries, if any, not433
otherwise allowable as a deduction but that would have been434
allowable as a deduction in computing federal adjusted gross435
income for the taxable year, had the targeted jobs credit allowed436
and determined under sections 38, 51, and 52 of the Internal437
Revenue Code not been in effect.438

       (8) Deduct any interest or interest equivalent on public439
obligations and purchase obligations to the extent that the440
interest or interest equivalent is included in federal adjusted441
gross income.442

       (9) Add any loss or deduct any gain resulting from the sale,443
exchange, or other disposition of public obligations to the extent444
that the loss has been deducted or the gain has been included in445
computing federal adjusted gross income.446

       (10) Deduct or add amounts, as provided under section447
5747.70 of the Revised Code, related to contributions to variable448
college savings program accounts made or tuition units purchased449
pursuant to Chapter 3334. of the Revised Code.450

       (11)(a) Deduct, to the extent not otherwise allowable as a451
deduction or exclusion in computing federal or Ohio adjusted gross452
income for the taxable year, the amount the taxpayer paid during453
the taxable year for medical care insurance and qualified454
long-term care insurance for the taxpayer, the taxpayer's spouse,455
and dependents. No deduction for medical care insurance under456
division (A)(11) of this section shall be allowed either to any457
taxpayer who is eligible to participate in any subsidized health458
plan maintained by any employer of the taxpayer or of the459
taxpayer's spouse, or to any taxpayer who is entitled to, or on460
application would be entitled to, benefits under part A of Title461
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.462
301, as amended. For the purposes of division (A)(11)(a) of this463
section, "subsidized health plan" means a health plan for which464
the employer pays any portion of the plan's cost. The deduction465
allowed under division (A)(11)(a) of this section shall be the net466
of any related premium refunds, related premium reimbursements, or467
related insurance premium dividends received during the taxable468
year.469

       (b) Deduct, to the extent not otherwise deducted or excluded470
in computing federal or Ohio adjusted gross income during the471
taxable year, the amount the taxpayer paid during the taxable472
year, not compensated for by any insurance or otherwise, for473
medical care of the taxpayer, the taxpayer's spouse, and474
dependents, to the extent the expenses exceed seven and one-half475
per cent of the taxpayer's federal adjusted gross income.476

       (c) For purposes of division (A)(11) of this section,477
"medical care" has the meaning given in section 213 of the478
Internal Revenue Code, subject to the special rules, limitations,479
and exclusions set forth therein, and "qualified long-term care"480
has the same meaning given in section 7702B(c) of the Internal481
Revenue Code.482

       (12)(a) Deduct any amount included in federal adjusted gross483
income solely because the amount represents a reimbursement or484
refund of expenses that in any year the taxpayer had deducted as485
an itemized deduction pursuant to section 63 of the Internal486
Revenue Code and applicable United States department of the487
treasury regulations. The deduction otherwise allowed under488
division (A)(12)(a) of this section shall be reduced to the extent489
the reimbursement is attributable to an amount the taxpayer490
deducted under this section in any taxable year.491

       (b) Add any amount not otherwise included in Ohio adjusted492
gross income for any taxable year to the extent that the amount is493
attributable to the recovery during the taxable year of any amount494
deducted or excluded in computing federal or Ohio adjusted gross495
income in any taxable year.496

       (13) Deduct any portion of the deduction described in section 497
1341(a)(2) of the Internal Revenue Code, for repaying previously 498
reported income received under a claim of right, that meets both 499
of the following requirements:500

       (a) It is allowable for repayment of an item that was501
included in the taxpayer's adjusted gross income for a prior502
taxable year and did not qualify for a credit under division (A)503
or (B) of section 5747.05 of the Revised Code for that year;504

       (b) It does not otherwise reduce the taxpayer's adjusted505
gross income for the current or any other taxable year.506

       (14) Deduct an amount equal to the deposits made to, and net507
investment earnings of, a medical savings account during the508
taxable year, in accordance with section 3924.66 of the Revised509
Code. The deduction allowed by division (A)(14) of this section510
does not apply to medical savings account deposits and earnings511
otherwise deducted or excluded for the current or any other512
taxable year from the taxpayer's federal adjusted gross income.513

       (15)(a) Add an amount equal to the funds withdrawn from a514
medical savings account during the taxable year, and the net515
investment earnings on those funds, when the funds withdrawn were516
used for any purpose other than to reimburse an account holder517
for, or to pay, eligible medical expenses, in accordance with518
section 3924.66 of the Revised Code;519

       (b) Add the amounts distributed from a medical savings520
account under division (A)(2) of section 3924.68 of the Revised521
Code during the taxable year.522

       (16) Add any amount claimed as a credit under section523
5747.059 of the Revised Code to the extent that such amount524
satisfies either of the following:525

       (a) The amount was deducted or excluded from the computation526
of the taxpayer's federal adjusted gross income as required to be527
reported for the taxpayer's taxable year under the Internal528
Revenue Code;529

       (b) The amount resulted in a reduction of the taxpayer's530
federal adjusted gross income as required to be reported for any531
of the taxpayer's taxable years under the Internal Revenue Code.532

       (17) Deduct the amount contributed by the taxpayer to an533
individual development account program established by a county534
department of job and family services pursuant to sections 329.11535
to 329.14 of the Revised Code for the purpose of matching funds536
deposited by program participants. On request of the tax537
commissioner, the taxpayer shall provide any information that, in538
the tax commissioner's opinion, is necessary to establish the539
amount deducted under division (A)(17) of this section.540

       (18) Beginning in taxable year 2001 but not for any taxable 541
year beginning after December 31, 2005, if the taxpayer is married542
and files a joint return and the combined federal adjusted gross 543
income of the taxpayer and the taxpayer's spouse for the taxable 544
year does not exceed one hundred thousand dollars, or if the 545
taxpayer is single and has a federal adjusted gross income for the546
taxable year not exceeding fifty thousand dollars, deduct amounts 547
paid during the taxable year for qualified tuition and fees paid 548
to an eligible institution for the taxpayer, the taxpayer's 549
spouse, or any dependent of the taxpayer, who is a resident of 550
this state and is enrolled in or attending a program that551
culminates in a degree or diploma at an eligible institution. The 552
deduction may be claimed only to the extent that qualified tuition 553
and fees are not otherwise deducted or excluded for any taxable 554
year from federal or Ohio adjusted gross income. The deduction may 555
not be claimed for educational expenses for which the taxpayer 556
claims a credit under section 5747.27 of the Revised Code.557

       (19) Add any reimbursement received during the taxable year558
of any amount the taxpayer deducted under division (A)(18) of this559
section in any previous taxable year to the extent the amount is560
not otherwise included in Ohio adjusted gross income.561

       (20)(a)(i) Add five-sixths of the amount of depreciation562
expense allowed by subsection (k) of section 168 of the Internal563
Revenue Code, including the taxpayer's proportionate or564
distributive share of the amount of depreciation expense allowed565
by that subsection to a pass-through entity in which the taxpayer566
has a direct or indirect ownership interest.567

       (ii) Add five-sixths of the amount of qualifying section 179 568
depreciation expense, including a person's proportionate or 569
distributive share of the amount of qualifying section 179 570
depreciation expense allowed to any pass-through entity in which 571
the person has a direct or indirect ownership. For the purposes of 572
this division, "qualifying section 179 depreciation expense" means 573
the difference between (I) the amount of depreciation expense 574
directly or indirectly allowed to the taxpayer under section 179 575
of the Internal Revenue Code, and (II) the amount of depreciation 576
expense directly or indirectly allowed to the taxpayer under 577
section 179 of the Internal Revenue Code as that section existed 578
on December 31, 2002.579

       The tax commissioner, under procedures established by the 580
commissioner, may waive the add-backs related to a pass-through 581
entity if the taxpayer owns, directly or indirectly, less than 582
five per cent of the pass-through entity.583

       (b) Nothing in division (A)(20) of this section shall be584
construed to adjust or modify the adjusted basis of any asset.585

       (c) To the extent the add-back required under division586
(A)(20)(a) of this section is attributable to property generating587
nonbusiness income or loss allocated under section 5747.20 of the588
Revised Code, the add-back shall be sitused to the same location589
as the nonbusiness income or loss generated by the property for590
the purpose of determining the credit under division (A) of591
section 5747.05 of the Revised Code. Otherwise, the add-back shall 592
be apportioned, subject to one or more of the four alternative 593
methods of apportionment enumerated in section 5747.21 of the 594
Revised Code.595

       (d) For the purposes of division (A) of this section, net 596
operating loss carryback and carryforward shall not include 597
five-sixths of the allowance of any net operating loss deduction 598
carryback or carryforward to the taxable year to the extent such 599
loss resulted from depreciation allowed by section 168(k) of the 600
Internal Revenue Code and by the qualifying section 179 601
depreciation expense amount.602

       (21)(a) If the taxpayer was required to add an amount under603
division (A)(20)(a) of this section for a taxable year, deduct604
one-fifth of the amount so added for each of the five succeeding605
taxable years.606

       (b) If the amount deducted under division (A)(21)(a) of this607
section is attributable to an add-back allocated under division608
(A)(20)(c) of this section, the amount deducted shall be sitused609
to the same location. Otherwise, the add-back shall be apportioned 610
using the apportionment factors for the taxable year in which the 611
deduction is taken, subject to one or more of the four alternative 612
methods of apportionment enumerated in section 5747.21 of the 613
Revised Code.614

       (c) No deduction is available under division (A)(21)(a) of 615
this section with regard to any depreciation allowed by section 616
168(k) of the Internal Revenue Code and by the qualifying section 617
179 depreciation expense amount to the extent that such 618
depreciation resulted in or increased a federal net operating loss 619
carryback or carryforward to a taxable year to which division 620
(A)(20)(d) of this section does not apply.621

       (22) Deduct, to the extent not otherwise deducted or excluded 622
in computing federal or Ohio adjusted gross income for the taxable 623
year, the amount the taxpayer received during the taxable year as 624
reimbursement for life insurance premiums under section 5919.31 of 625
the Revised Code.626

        (23) Deduct, to the extent not otherwise deducted or excluded 627
in computing federal or Ohio adjusted gross income for the taxable 628
year, the amount the taxpayer received during the taxable year as 629
a death benefit paid by the adjutant general under section 5919.33 630
of the Revised Code.631

       (24) Deduct, to the extent included in federal adjusted gross 632
income and not otherwise allowable as a deduction or exclusion in 633
computing federal or Ohio adjusted gross income for the taxable 634
year, military pay and allowances received by the taxpayer during 635
the taxable year for active duty service in the United States 636
army, air force, navy, marine corps, or coast guard or reserve 637
components thereof or the national guard. The deduction may not be 638
claimed for military pay and allowances received by the taxpayer 639
while the taxpayer is stationed in this state.640

       (25) Deduct, to the extent not otherwise allowable as a 641
deduction or exclusion in computing federal or Ohio adjusted gross 642
income for the taxable year and not otherwise compensated for by 643
any other source, the amount of qualified organ donation expenses 644
incurred by the taxpayer during the taxable year, not to exceed 645
ten thousand dollars. A taxpayer may deduct qualified organ 646
donation expenses only once for all taxable years beginning with 647
taxable years beginning in 2007.648

       For the purposes of division (A)(25) of this section:649

        (a) "Human organ" means all or any portion of a human liver, 650
pancreas, kidney, intestine, or lung, and any portion of human 651
bone marrow.652

        (b) "Qualified organ donation expenses" means travel 653
expenses, lodging expenses, and wages and salary forgone by a 654
taxpayer in connection with the taxpayer's donation, while living, 655
of one or more of the taxpayer's human organs to another human 656
being.657

       (26) Deduct, to the extent not otherwise deducted or excluded 658
in computing federal or Ohio adjusted gross income for the taxable 659
year, amounts received by the taxpayer as retired military 660
personnel pay for service in the United States army, navy, air 661
force, coast guard, or marine corps or reserve components thereof, 662
or the national guard, or received by the surviving spouse or 663
former spouse of such a taxpayer under the survivor benefit plan 664
on account of such a taxpayer's death. If the taxpayer receives 665
income on account of retirement paid under the federal civil 666
service retirement system or federal employees retirement system, 667
or under any successor retirement program enacted by the congress 668
of the United States that is established and maintained for 669
retired employees of the United States government, and such 670
retirement income is based, in whole or in part, on credit for 671
the taxpayer's military service, the deduction allowed under this 672
division shall include only that portion of such retirement 673
income that is attributable to the taxpayer's military service, 674
to the extent that portion of such retirement income is otherwise 675
included in federal adjusted gross income and is not otherwise 676
deducted under this section. Any amount deducted under division 677
(A)(26) of this section is not included in a taxpayer's 678
adjusted gross income for the purposes of section 5747.055 of 679
the Revised Code. No amount may be deducted under division 680
(A)(26) of this section on the basis of which a credit was 681
claimed under section 5747.055 of the Revised Code.682

       (27) Deduct, to the extent not otherwise deducted or excluded 683
in computing federal or Ohio adjusted gross income for the taxable 684
year, the amount the taxpayer received during the taxable year 685
from the military injury relief fund created in section 5101.98 of 686
the Revised Code.687

       (B) "Business income" means income, including gain or loss,688
arising from transactions, activities, and sources in the regular689
course of a trade or business and includes income, gain, or loss690
from real property, tangible property, and intangible property if691
the acquisition, rental, management, and disposition of the692
property constitute integral parts of the regular course of a693
trade or business operation. "Business income" includes income,694
including gain or loss, from a partial or complete liquidation of695
a business, including, but not limited to, gain or loss from the696
sale or other disposition of goodwill.697

       (C) "Nonbusiness income" means all income other than business 698
income and may include, but is not limited to, compensation, rents 699
and royalties from real or tangible personal property, capital 700
gains, interest, dividends and distributions, patent or copyright 701
royalties, or lottery winnings, prizes, and awards.702

       (D) "Compensation" means any form of remuneration paid to an703
employee for personal services.704

       (E) "Fiduciary" means a guardian, trustee, executor,705
administrator, receiver, conservator, or any other person acting706
in any fiduciary capacity for any individual, trust, or estate.707

       (F) "Fiscal year" means an accounting period of twelve708
months ending on the last day of any month other than December.709

       (G) "Individual" means any natural person.710

       (H) "Internal Revenue Code" means the "Internal Revenue Code711
of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.712

       (I) "Resident" means any of the following, provided that713
division (I)(3) of this section applies only to taxable years of a714
trust beginning in 2002 or thereafter:715

       (1) An individual who is domiciled in this state, subject to716
section 5747.24 of the Revised Code;717

       (2) The estate of a decedent who at the time of death was718
domiciled in this state. The domicile tests of section 5747.24 of719
the Revised Code are not controlling for purposes of division 720
(I)(2) of this section.721

       (3) A trust that, in whole or part, resides in this state. If722
only part of a trust resides in this state, the trust is a723
resident only with respect to that part.724

       For the purposes of division (I)(3) of this section:725

       (a) A trust resides in this state for the trust's current726
taxable year to the extent, as described in division (I)(3)(d) of727
this section, that the trust consists directly or indirectly, in 728
whole or in part, of assets, net of any related liabilities, that 729
were transferred, or caused to be transferred, directly or 730
indirectly, to the trust by any of the following:731

        (i) A person, a court, or a governmental entity or 732
instrumentality on account of the death of a decedent, but only if 733
the trust is described in division (I)(3)(e)(i) or (ii) of this 734
section;735

       (ii) A person who was domiciled in this state for the 736
purposes of this chapter when the person directly or indirectly 737
transferred assets to an irrevocable trust, but only if at least 738
one of the trust's qualifying beneficiaries is domiciled in this 739
state for the purposes of this chapter during all or some portion 740
of the trust's current taxable year;741

       (iii) A person who was domiciled in this state for the742
purposes of this chapter when the trust document or instrument or743
part of the trust document or instrument became irrevocable, but744
only if at least one of the trust's qualifying beneficiaries is a 745
resident domiciled in this state for the purposes of this chapter746
during all or some portion of the trust's current taxable year. If 747
a trust document or instrument became irrevocable upon the death 748
of a person who at the time of death was domiciled in this state 749
for purposes of this chapter, that person is a person described in 750
division (I)(3)(a)(iii) of this section.751

        (b) A trust is irrevocable to the extent that the transferor 752
is not considered to be the owner of the net assets of the trust 753
under sections 671 to 678 of the Internal Revenue Code.754

       (c) With respect to a trust other than a charitable lead755
trust, "qualifying beneficiary" has the same meaning as "potential756
current beneficiary" as defined in section 1361(e)(2) of the757
Internal Revenue Code, and with respect to a charitable lead trust758
"qualifying beneficiary" is any current, future, or contingent759
beneficiary, but with respect to any trust "qualifying760
beneficiary" excludes a person or a governmental entity or761
instrumentality to any of which a contribution would qualify for762
the charitable deduction under section 170 of the Internal Revenue763
Code.764

        (d) For the purposes of division (I)(3)(a) of this section,765
the extent to which a trust consists directly or indirectly, in766
whole or in part, of assets, net of any related liabilities, that767
were transferred directly or indirectly, in whole or part, to the768
trust by any of the sources enumerated in that division shall be769
ascertained by multiplying the fair market value of the trust's770
assets, net of related liabilities, by the qualifying ratio, which771
shall be computed as follows:772

        (i) The first time the trust receives assets, the numerator773
of the qualifying ratio is the fair market value of those assets774
at that time, net of any related liabilities, from sources775
enumerated in division (I)(3)(a) of this section. The denominator776
of the qualifying ratio is the fair market value of all the777
trust's assets at that time, net of any related liabilities.778

        (ii) Each subsequent time the trust receives assets, a779
revised qualifying ratio shall be computed. The numerator of the780
revised qualifying ratio is the sum of (1) the fair market value781
of the trust's assets immediately prior to the subsequent782
transfer, net of any related liabilities, multiplied by the783
qualifying ratio last computed without regard to the subsequent784
transfer, and (2) the fair market value of the subsequently785
transferred assets at the time transferred, net of any related786
liabilities, from sources enumerated in division (I)(3)(a) of this787
section. The denominator of the revised qualifying ratio is the788
fair market value of all the trust's assets immediately after the789
subsequent transfer, net of any related liabilities.790

       (iii) Whether a transfer to the trust is by or from any of 791
the sources enumerated in division (I)(3)(a) of this section shall 792
be ascertained without regard to the domicile of the trust's 793
beneficiaries.794

        (e) For the purposes of division (I)(3)(a)(i) of this795
section:796

        (i) A trust is described in division (I)(3)(e)(i) of this797
section if the trust is a testamentary trust and the testator of798
that testamentary trust was domiciled in this state at the time of799
the testator's death for purposes of the taxes levied under800
Chapter 5731. of the Revised Code.801

        (ii) A trust is described in division (I)(3)(e)(ii) of this802
section if the transfer is a qualifying transfer described in any803
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an804
irrevocable inter vivos trust, and at least one of the trust's805
qualifying beneficiaries is domiciled in this state for purposes806
of this chapter during all or some portion of the trust's current807
taxable year.808

        (f) For the purposes of division (I)(3)(e)(ii) of this809
section, a "qualifying transfer" is a transfer of assets, net of810
any related liabilities, directly or indirectly to a trust, if the811
transfer is described in any of the following:812

        (i) The transfer is made to a trust, created by the decedent 813
before the decedent's death and while the decedent was domiciled 814
in this state for the purposes of this chapter, and, prior to the 815
death of the decedent, the trust became irrevocable while the 816
decedent was domiciled in this state for the purposes of this 817
chapter.818

        (ii) The transfer is made to a trust to which the decedent,819
prior to the decedent's death, had directly or indirectly820
transferred assets, net of any related liabilities, while the821
decedent was domiciled in this state for the purposes of this822
chapter, and prior to the death of the decedent the trust became823
irrevocable while the decedent was domiciled in this state for the824
purposes of this chapter.825

        (iii) The transfer is made on account of a contractual826
relationship existing directly or indirectly between the827
transferor and either the decedent or the estate of the decedent828
at any time prior to the date of the decedent's death, and the829
decedent was domiciled in this state at the time of death for830
purposes of the taxes levied under Chapter 5731. of the Revised831
Code.832

        (iv) The transfer is made to a trust on account of a833
contractual relationship existing directly or indirectly between834
the transferor and another person who at the time of the835
decedent's death was domiciled in this state for purposes of this836
chapter.837

        (v) The transfer is made to a trust on account of the will of 838
a testator who was domiciled in this state at the time of the 839
testator's death for purposes of the taxes levied under Chapter 840
5731. of the Revised Code.841

        (vi) The transfer is made to a trust created by or caused to 842
be created by a court, and the trust was directly or indirectly843
created in connection with or as a result of the death of an844
individual who, for purposes of the taxes levied under Chapter845
5731. of the Revised Code, was domiciled in this state at the time846
of the individual's death.847

       (g) The tax commissioner may adopt rules to ascertain the848
part of a trust residing in this state.849

       (J) "Nonresident" means an individual or estate that is not a 850
resident. An individual who is a resident for only part of a851
taxable year is a nonresident for the remainder of that taxable852
year.853

       (K) "Pass-through entity" has the same meaning as in section854
5733.04 of the Revised Code.855

       (L) "Return" means the notifications and reports required to856
be filed pursuant to this chapter for the purpose of reporting the857
tax due and includes declarations of estimated tax when so858
required.859

       (M) "Taxable year" means the calendar year or the taxpayer's860
fiscal year ending during the calendar year, or fractional part861
thereof, upon which the adjusted gross income is calculated862
pursuant to this chapter.863

       (N) "Taxpayer" means any person subject to the tax imposed by 864
section 5747.02 of the Revised Code or any pass-through entity865
that makes the election under division (D) of section 5747.08 of866
the Revised Code.867

       (O) "Dependents" means dependents as defined in the Internal868
Revenue Code and as claimed in the taxpayer's federal income tax869
return for the taxable year or which the taxpayer would have been870
permitted to claim had the taxpayer filed a federal income tax871
return.872

       (P) "Principal county of employment" means, in the case of a873
nonresident, the county within the state in which a taxpayer874
performs services for an employer or, if those services are875
performed in more than one county, the county in which the major876
portion of the services are performed.877

       (Q) As used in sections 5747.50 to 5747.55 of the Revised878
Code:879

       (1) "Subdivision" means any county, municipal corporation,880
park district, or township.881

       (2) "Essential local government purposes" includes all882
functions that any subdivision is required by general law to883
exercise, including like functions that are exercised under a884
charter adopted pursuant to the Ohio Constitution.885

       (R) "Overpayment" means any amount already paid that exceeds886
the figure determined to be the correct amount of the tax.887

       (S) "Taxable income" or "Ohio taxable income" applies only to 888
estates and trusts, and means federal taxable income, as defined 889
and used in the Internal Revenue Code, adjusted as follows:890

       (1) Add interest or dividends, net of ordinary, necessary,891
and reasonable expenses not deducted in computing federal taxable892
income, on obligations or securities of any state or of any893
political subdivision or authority of any state, other than this894
state and its subdivisions and authorities, but only to the extent 895
that such net amount is not otherwise includible in Ohio taxable 896
income and is described in either division (S)(1)(a) or (b) of 897
this section:898

        (a) The net amount is not attributable to the S portion of an 899
electing small business trust and has not been distributed to900
beneficiaries for the taxable year;901

        (b) The net amount is attributable to the S portion of an902
electing small business trust for the taxable year.903

       (2) Add interest or dividends, net of ordinary, necessary,904
and reasonable expenses not deducted in computing federal taxable905
income, on obligations of any authority, commission,906
instrumentality, territory, or possession of the United States to907
the extent that the interest or dividends are exempt from federal908
income taxes but not from state income taxes, but only to the909
extent that such net amount is not otherwise includible in Ohio910
taxable income and is described in either division (S)(1)(a) or911
(b) of this section;912

       (3) Add the amount of personal exemption allowed to the913
estate pursuant to section 642(b) of the Internal Revenue Code;914

       (4) Deduct interest or dividends, net of related expenses915
deducted in computing federal taxable income, on obligations of916
the United States and its territories and possessions or of any917
authority, commission, or instrumentality of the United States to918
the extent that the interest or dividends are exempt from state919
taxes under the laws of the United States, but only to the extent920
that such amount is included in federal taxable income and is921
described in either division (S)(1)(a) or (b) of this section;922

       (5) Deduct the amount of wages and salaries, if any, not923
otherwise allowable as a deduction but that would have been924
allowable as a deduction in computing federal taxable income for925
the taxable year, had the targeted jobs credit allowed under926
sections 38, 51, and 52 of the Internal Revenue Code not been in927
effect, but only to the extent such amount relates either to928
income included in federal taxable income for the taxable year or929
to income of the S portion of an electing small business trust for930
the taxable year;931

       (6) Deduct any interest or interest equivalent, net of932
related expenses deducted in computing federal taxable income, on933
public obligations and purchase obligations, but only to the934
extent that such net amount relates either to income included in935
federal taxable income for the taxable year or to income of the S936
portion of an electing small business trust for the taxable year;937

       (7) Add any loss or deduct any gain resulting from sale,938
exchange, or other disposition of public obligations to the extent939
that such loss has been deducted or such gain has been included in940
computing either federal taxable income or income of the S portion941
of an electing small business trust for the taxable year;942

       (8) Except in the case of the final return of an estate, add943
any amount deducted by the taxpayer on both its Ohio estate tax944
return pursuant to section 5731.14 of the Revised Code, and on its945
federal income tax return in determining federal taxable income;946

       (9)(a) Deduct any amount included in federal taxable income947
solely because the amount represents a reimbursement or refund of948
expenses that in a previous year the decedent had deducted as an949
itemized deduction pursuant to section 63 of the Internal Revenue950
Code and applicable treasury regulations. The deduction otherwise951
allowed under division (S)(9)(a) of this section shall be reduced952
to the extent the reimbursement is attributable to an amount the953
taxpayer or decedent deducted under this section in any taxable954
year.955

       (b) Add any amount not otherwise included in Ohio taxable956
income for any taxable year to the extent that the amount is957
attributable to the recovery during the taxable year of any amount958
deducted or excluded in computing federal or Ohio taxable income959
in any taxable year, but only to the extent such amount has not960
been distributed to beneficiaries for the taxable year.961

       (10) Deduct any portion of the deduction described in section 962
1341(a)(2) of the Internal Revenue Code, for repaying previously 963
reported income received under a claim of right, that meets both 964
of the following requirements:965

       (a) It is allowable for repayment of an item that was966
included in the taxpayer's taxable income or the decedent's967
adjusted gross income for a prior taxable year and did not qualify968
for a credit under division (A) or (B) of section 5747.05 of the969
Revised Code for that year.970

       (b) It does not otherwise reduce the taxpayer's taxable971
income or the decedent's adjusted gross income for the current or972
any other taxable year.973

       (11) Add any amount claimed as a credit under section974
5747.059 of the Revised Code to the extent that the amount975
satisfies either of the following:976

       (a) The amount was deducted or excluded from the computation977
of the taxpayer's federal taxable income as required to be978
reported for the taxpayer's taxable year under the Internal979
Revenue Code;980

       (b) The amount resulted in a reduction in the taxpayer's981
federal taxable income as required to be reported for any of the982
taxpayer's taxable years under the Internal Revenue Code.983

       (12) Deduct any amount, net of related expenses deducted in984
computing federal taxable income, that a trust is required to985
report as farm income on its federal income tax return, but only986
if the assets of the trust include at least ten acres of land987
satisfying the definition of "land devoted exclusively to988
agricultural use" under section 5713.30 of the Revised Code,989
regardless of whether the land is valued for tax purposes as such990
land under sections 5713.30 to 5713.38 of the Revised Code. If the991
trust is a pass-through entity investor, section 5747.231 of the992
Revised Code applies in ascertaining if the trust is eligible to993
claim the deduction provided by division (S)(12) of this section994
in connection with the pass-through entity's farm income.995

        Except for farm income attributable to the S portion of an996
electing small business trust, the deduction provided by division997
(S)(12) of this section is allowed only to the extent that the998
trust has not distributed such farm income. Division (S)(12) of999
this section applies only to taxable years of a trust beginning in1000
2002 or thereafter.1001

       (13) Add the net amount of income described in section 641(c)1002
of the Internal Revenue Code to the extent that amount is not1003
included in federal taxable income.1004

       (14) Add or deduct the amount the taxpayer would be required1005
to add or deduct under division (A)(20) or (21) of this section if1006
the taxpayer's Ohio taxable income were computed in the same1007
manner as an individual's Ohio adjusted gross income is computed1008
under this section. In the case of a trust, division (S)(14) of1009
this section applies only to any of the trust's taxable years1010
beginning in 2002 or thereafter.1011

       (T) "School district income" and "school district income tax" 1012
have the same meanings as in section 5748.01 of the Revised Code.1013

       (U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)1014
of this section, "public obligations," "purchase obligations," and1015
"interest or interest equivalent" have the same meanings as in1016
section 5709.76 of the Revised Code.1017

       (V) "Limited liability company" means any limited liability1018
company formed under Chapter 1705. of the Revised Code or under1019
the laws of any other state.1020

       (W) "Pass-through entity investor" means any person who,1021
during any portion of a taxable year of a pass-through entity, is1022
a partner, member, shareholder, or equity investor in that1023
pass-through entity.1024

       (X) "Banking day" has the same meaning as in section 1304.011025
of the Revised Code.1026

       (Y) "Month" means a calendar month.1027

       (Z) "Quarter" means the first three months, the second three1028
months, the third three months, or the last three months of the1029
taxpayer's taxable year.1030

       (AA)(1) "Eligible institution" means a state university or1031
state institution of higher education as defined in section1032
3345.011 of the Revised Code, or a private, nonprofit college,1033
university, or other post-secondary institution located in this1034
state that possesses a certificate of authorization issued by the1035
Ohio board of regents pursuant to Chapter 1713. of the Revised1036
Code or a certificate of registration issued by the state board of1037
career colleges and schools under Chapter 3332. of the Revised1038
Code.1039

       (2) "Qualified tuition and fees" means tuition and fees1040
imposed by an eligible institution as a condition of enrollment or1041
attendance, not exceeding two thousand five hundred dollars in1042
each of the individual's first two years of post-secondary1043
education. If the individual is a part-time student, "qualified1044
tuition and fees" includes tuition and fees paid for the academic1045
equivalent of the first two years of post-secondary education1046
during a maximum of five taxable years, not exceeding a total of1047
five thousand dollars. "Qualified tuition and fees" does not1048
include:1049

       (a) Expenses for any course or activity involving sports,1050
games, or hobbies unless the course or activity is part of the1051
individual's degree or diploma program;1052

       (b) The cost of books, room and board, student activity fees,1053
athletic fees, insurance expenses, or other expenses unrelated to 1054
the individual's academic course of instruction;1055

       (c) Tuition, fees, or other expenses paid or reimbursed1056
through an employer, scholarship, grant in aid, or other1057
educational benefit program.1058

       (BB)(1) "Modified business income" means the business income1059
included in a trust's Ohio taxable income after such taxable1060
income is first reduced by the qualifying trust amount, if any.1061

       (2) "Qualifying trust amount" of a trust means capital gains1062
and losses from the sale, exchange, or other disposition of equity1063
or ownership interests in, or debt obligations of, a qualifying1064
investee to the extent included in the trust's Ohio taxable 1065
income, but only if the following requirements are satisfied:1066

        (a) The book value of the qualifying investee's physical 1067
assets in this state and everywhere, as of the last day of the 1068
qualifying investee's fiscal or calendar year ending immediately 1069
prior to the date on which the trust recognizes the gain or loss, 1070
is available to the trust.1071

       (b) The requirements of section 5747.011 of the Revised Code1072
are satisfied for the trust's taxable year in which the trust1073
recognizes the gain or loss.1074

        Any gain or loss that is not a qualifying trust amount is1075
modified business income, qualifying investment income, or1076
modified nonbusiness income, as the case may be.1077

       (3) "Modified nonbusiness income" means a trust's Ohio1078
taxable income other than modified business income, other than the1079
qualifying trust amount, and other than qualifying investment1080
income, as defined in section 5747.012 of the Revised Code, to the1081
extent such qualifying investment income is not otherwise part of1082
modified business income.1083

       (4) "Modified Ohio taxable income" applies only to trusts,1084
and means the sum of the amounts described in divisions (BB)(4)(a) 1085
to (c) of this section:1086

       (a) The fraction, calculated under section 5747.013, and 1087
applying section 5747.231 of the Revised Code, multiplied by the 1088
sum of the following amounts:1089

        (i) The trust's modified business income;1090

        (ii) The trust's qualifying investment income, as defined in 1091
section 5747.012 of the Revised Code, but only to the extent the 1092
qualifying investment income does not otherwise constitute1093
modified business income and does not otherwise constitute a1094
qualifying trust amount.1095

       (b) The qualifying trust amount multiplied by a fraction, the 1096
numerator of which is the sum of the book value of the qualifying 1097
investee's physical assets in this state on the last day of the 1098
qualifying investee's fiscal or calendar year ending immediately 1099
prior to the day on which the trust recognizes the qualifying 1100
trust amount, and the denominator of which is the sum of the book 1101
value of the qualifying investee's total physical assets 1102
everywhere on the last day of the qualifying investee's fiscal or 1103
calendar year ending immediately prior to the day on which the 1104
trust recognizes the qualifying trust amount. If, for a taxable 1105
year, the trust recognizes a qualifying trust amount with respect 1106
to more than one qualifying investee, the amount described in 1107
division (BB)(4)(b) of this section shall equal the sum of the1108
products so computed for each such qualifying investee.1109

       (c)(i) With respect to a trust or portion of a trust that is 1110
a resident as ascertained in accordance with division (I)(3)(d) of 1111
this section, its modified nonbusiness income.1112

        (ii) With respect to a trust or portion of a trust that is1113
not a resident as ascertained in accordance with division1114
(I)(3)(d) of this section, the amount of its modified nonbusiness1115
income satisfying the descriptions in divisions (B)(2) to (5) of1116
section 5747.20 of the Revised Code, except as otherwise provided 1117
in division (BB)(4)(c)(ii) of this section. With respect to a 1118
trust or portion of a trust that is not a resident as ascertained 1119
in accordance with division (I)(3)(d) of this section, the trust's 1120
portion of modified nonbusiness income recognized from the sale, 1121
exchange, or other disposition of a debt interest in or equity 1122
interest in a section 5747.212 entity, as defined in section 1123
5747.212 of the Revised Code, without regard to division (A) of 1124
that section, shall not be allocated to this state in accordance 1125
with section 5747.20 of the Revised Code but shall be apportioned 1126
to this state in accordance with division (B) of section 5747.212 1127
of the Revised Code without regard to division (A) of that 1128
section.1129

       If the allocation and apportionment of a trust's income under1130
divisions (BB)(4)(a) and (c) of this section do not fairly1131
represent the modified Ohio taxable income of the trust in this1132
state, the alternative methods described in division (C) of1133
section 5747.21 of the Revised Code may be applied in the manner1134
and to the same extent provided in that section.1135

       (5)(a) Except as set forth in division (BB)(5)(b) of this 1136
section, "qualifying investee" means a person in which a trust has 1137
an equity or ownership interest, or a person or unit of government 1138
the debt obligations of either of which are owned by a trust. For 1139
the purposes of division (BB)(2)(a) of this section and for the 1140
purpose of computing the fraction described in division (BB)(4)(b) 1141
of this section, all of the following apply:1142

        (i) If the qualifying investee is a member of a qualifying1143
controlled group on the last day of the qualifying investee's1144
fiscal or calendar year ending immediately prior to the date on1145
which the trust recognizes the gain or loss, then "qualifying1146
investee" includes all persons in the qualifying controlled group1147
on such last day.1148

        (ii) If the qualifying investee, or if the qualifying1149
investee and any members of the qualifying controlled group of1150
which the qualifying investee is a member on the last day of the1151
qualifying investee's fiscal or calendar year ending immediately1152
prior to the date on which the trust recognizes the gain or loss,1153
separately or cumulatively own, directly or indirectly, on the1154
last day of the qualifying investee's fiscal or calendar year1155
ending immediately prior to the date on which the trust recognizes1156
the qualifying trust amount, more than fifty per cent of the1157
equity of a pass-through entity, then the qualifying investee and1158
the other members are deemed to own the proportionate share of the1159
pass-through entity's physical assets which the pass-through1160
entity directly or indirectly owns on the last day of the1161
pass-through entity's calendar or fiscal year ending within or1162
with the last day of the qualifying investee's fiscal or calendar1163
year ending immediately prior to the date on which the trust1164
recognizes the qualifying trust amount.1165

        (iii) For the purposes of division (BB)(5)(a)(iii) of this1166
section, "upper level pass-through entity" means a pass-through1167
entity directly or indirectly owning any equity of another1168
pass-through entity, and "lower level pass-through entity" means1169
that other pass-through entity.1170

        An upper level pass-through entity, whether or not it is also 1171
a qualifying investee, is deemed to own, on the last day of the 1172
upper level pass-through entity's calendar or fiscal year, the1173
proportionate share of the lower level pass-through entity's1174
physical assets that the lower level pass-through entity directly1175
or indirectly owns on the last day of the lower level pass-through1176
entity's calendar or fiscal year ending within or with the last1177
day of the upper level pass-through entity's fiscal or calendar1178
year. If the upper level pass-through entity directly and1179
indirectly owns less than fifty per cent of the equity of the1180
lower level pass-through entity on each day of the upper level1181
pass-through entity's calendar or fiscal year in which or with1182
which ends the calendar or fiscal year of the lower level1183
pass-through entity and if, based upon clear and convincing1184
evidence, complete information about the location and cost of the1185
physical assets of the lower pass-through entity is not available1186
to the upper level pass-through entity, then solely for purposes1187
of ascertaining if a gain or loss constitutes a qualifying trust1188
amount, the upper level pass-through entity shall be deemed as1189
owning no equity of the lower level pass-through entity for each1190
day during the upper level pass-through entity's calendar or1191
fiscal year in which or with which ends the lower level1192
pass-through entity's calendar or fiscal year. Nothing in division 1193
(BB)(5)(a)(iii) of this section shall be construed to provide for 1194
any deduction or exclusion in computing any trust's Ohio taxable 1195
income.1196

       (b) With respect to a trust that is not a resident for the1197
taxable year and with respect to a part of a trust that is not a1198
resident for the taxable year, "qualifying investee" for that1199
taxable year does not include a C corporation if both of the1200
following apply:1201

       (i) During the taxable year the trust or part of the trust1202
recognizes a gain or loss from the sale, exchange, or other1203
disposition of equity or ownership interests in, or debt1204
obligations of, the C corporation.1205

       (ii) Such gain or loss constitutes nonbusiness income.1206

        (6) "Available" means information is such that a person is 1207
able to learn of the information by the due date plus extensions, 1208
if any, for filing the return for the taxable year in which the 1209
trust recognizes the gain or loss.1210

        (CC) "Qualifying controlled group" has the same meaning as in 1211
section 5733.04 of the Revised Code.1212

        (DD) "Related member" has the same meaning as in section1213
5733.042 of the Revised Code.1214

       (EE)(1) For the purposes of division (EE) of this section: 1215

       (a) "Qualifying person" means any person other than a 1216
qualifying corporation.1217

       (b) "Qualifying corporation" means any person classified for 1218
federal income tax purposes as an association taxable as a 1219
corporation, except either of the following:1220

       (i) A corporation that has made an election under subchapter 1221
S, chapter one, subtitle A, of the Internal Revenue Code for its 1222
taxable year ending within, or on the last day of, the investor's 1223
taxable year;1224

       (ii) A subsidiary that is wholly owned by any corporation 1225
that has made an election under subchapter S, chapter one, 1226
subtitle A of the Internal Revenue Code for its taxable year 1227
ending within, or on the last day of, the investor's taxable year.1228

       (2) For the purposes of this chapter, unless expressly stated 1229
otherwise, no qualifying person indirectly owns any asset directly 1230
or indirectly owned by any qualifying corporation.1231

       (FF) For purposes of this chapter and Chapter 5751. of the 1232
Revised Code:1233

       (1) "Trust" does not include a qualified pre-income tax 1234
trust.1235

       (2) A "qualified pre-income tax trust" is any pre-income tax 1236
trust that makes a qualifying pre-income tax trust election as 1237
described in division (FF)(3) of this section.1238

       (3) A "qualifying pre-income tax trust election" is an 1239
election by a pre-income tax trust to subject to the tax imposed 1240
by section 5751.02 of the Revised Code the pre-income tax trust 1241
and all pass-through entities of which the trust owns or 1242
controls, directly, indirectly, or constructively through related 1243
interests, five per cent or more of the ownership or equity 1244
interests. The trustee shall notify the tax commissioner in 1245
writing of the election on or before April 15, 2006. The 1246
election, if timely made, shall be effective on and after January 1247
1, 2006, and shall apply for all tax periods and tax years until 1248
revoked by the trustee of the trust.1249

       (4) A "pre-income tax trust" is a trust that satisfies all of 1250
the following requirements:1251

       (a) The document or instrument creating the trust was 1252
executed by the grantor before January 1, 1972;1253

       (b) The trust became irrevocable upon the creation of the 1254
trust; and1255

       (c) The grantor was domiciled in this state at the time the 1256
trust was created.1257

       Sec. 5815.31.  Unless the trust or separation agreement1258
provides otherwise, if, after executing a trust in which the1259
grantor reserves to self a power to alter, amend, revoke, or1260
terminate the provisions of the trust, a grantor is divorced, 1261
obtains a dissolution of marriage, has the grantor's marriage1262
annulled, or, upon actual separation from the grantor's spouse, 1263
enters into a separation agreement pursuant to which the parties 1264
intend to fully and finally settle their prospective property 1265
rights in the property of the other, whether by expected 1266
inheritance or otherwise, the spouse or former spouse of the 1267
grantor shall be deemed to have predeceased the grantor, and any 1268
provision in the trust conferring any beneficial interest or a 1269
general or special power of appointment on the spouse or former1270
spouse or nominating the spouse or former spouse as trustee or1271
trust advisor shall be revoked. If the grantor remarries the1272
grantor's former spouse or if the separation agreement is 1273
terminated, the spouse shall not be deemed to have predeceased the 1274
grantor, and any provision in the trust conferring any beneficial 1275
interest or a general or special power of appointment on the 1276
spouse or former spouse or nominating the spouse or former spouse 1277
as trustee or trust advisor shall not be revoked.1278

       Section 2. That existing sections 2101.16, 2107.76, 2111.05, 1279
2111.18, 2305.19, 5747.01, and 5815.31 of the Revised Code are 1280
hereby repealed.1281